TABLE OF CONTENTS
1.10 RESEARCH PROCESS
1.11 OPERATIONAL DEFINITION OF TERMS
OF PERFORMANCE MANAGEMENT SYSTEM
2.3 COMPONENTS/CHARACTERISTICS OF A
PERFORMANCE MANAGEMENT SYSTEM
2.3.1 Performance Management System Design
MANAGEMENT SYSTEM MODELS AND THEORETICAL FRAMEWORK
2.4.1 Model by
Gevity Institute, Cornell University (2007)
FRAMEWORK BY HORWITZ (2009)
SCORECARD (BSC) MODEL BY KAPLAN AND NORTON
2.4.4 OTHER PERFORMANCE MANAGEMENT SYSTEM MODELS
Management Advisory committee (2001)
22.214.171.124 The Model by Fraser (2007)
model by Mwita (2000)
Model by the Turning Point
Performance Management National Excellence Collaborative Framework (2005)
2.5 IMPACT OF ORGANISATIONAL STRUCTURE AND
CULTURE ON PERFORMANCE MANAGEMENT
2.5.3 WORKPLACE CULTURE AND COMMITMENT
FOR POOR PERFORMANCE IN PNL
APPRAISAL SYSTEM AND ASSESSMENT (PAS)
TURNOVER AND RETENTION
PRACTICES IN RETENTION AND KNOWLEDGE TRANSFER
2.7.2 LEADERSHIP STYLE
AND RECOGNITION STRATEGIES
THEORY AND PERFORMANCE MANAGEMENT SYSTEMS
A PERFORMANCE MANAGEMENT SYSTEM
2.8.1 STEPS TO
AN EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM (PMS)
PROCESS AND SKILLS FOR AN EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM
2.8.3 KEYS TO
SUCCESS IN PERFORMANCE MANAGEMENT SYSTEM
2.9 GAPS IN
AND SAMPLING TECHNIQUE
3.5.1 EMPLOYEE QUESTIONNAIRE
GUIDE SCHEDULE (I.G.S)
OF EMPLOYEE QUESTIONNAIRE (E.Q) WITH RESEARCH
3.5.4 ALIGNMENT OF INTERVIEW GUIDE SCHEDULE (I.G.S) WITH RESEARCH
OF RESEARCH INSTRUMENT
OF RESEARCH INSTRUMENT
ADMINISTRATION AND COLLECTION
ANALYSIS OF DATA
4.8 SUMMARY OF FINDINGS
RECOMMENDATIONS AND OPTIONS
OF POSSIBLE OPTIONS
5.5 COST BENEFIT ANALYSIS
5.6 SELECTION AND JUSTIFICATION OF OPTIONS
6.2 IMPLEMENTATION SCHEDULE
6.3 POSSIBLE PROBLEM AREAS AND CONTROL MEASURES
APPENDIX A: Alignment
of Questionnaire Items with Research Questions
APPENDIX B: Alignment of Interview Guide Schedule with Research
APPENDIX C: Employee Questionnaire (E .Q)
APPENDIX D: Interview
Guide Schedule (I.G.S)
APPENDIX E: Observation
Checklist from Clocking Cards
provided an internal analysis of Pioneer Nigeria Limited, the challenges that
exist within the company and the possible course of action to meet the
challenges. It also explained the purpose of study, theoretical framework and
the research objectives and questions. The chapter finally highlighted the
scope and limitations of study for the research work. Pioneer Nigeria Limited
(PNL) is a small limited liability company founded in 1985 under, The Companies
Act 1968 currently, The Companies and Allied Matters Act 1990 as a distributor
for sale of foreign products namely: Bird’s Custard Powder, Cow and Gate Baby
Milk and Kleenex Tissue paper for Brian Munro Limited United Kingdom. In 1988
PNL diverted to the manufacturing sector for the refining of edible vegetable
oil following registration as a factory under the Nigerian Factories Act
1987.Its manufacturing functions started fully in 1988 with staff strength of
seven employees using a chemical refining Plant system. PNL products then were
Soya bean, Groundnut and Palm kernel oil on a very small scale and contract
refining on behalf of third parties.
The company currently manufactures
Palm Kernel vegetable oil from local raw material used mainly by corporate
organisations as a raw material for production of their Products mainly Biscuits and Cheese balls and sold
into local markets and outlets all over the country for domestic consumption.
It also produces distilled fatty acid which is a by-product of the palm kernel
and is used by soap manufacturers as their major raw material. The company’s
capacity is to produce 1,500 tons per
month and 18,000 tons per annum, at an average sales price of N245, 000 naira
per ton – an income of
naira would be generated annually. However the company’s actual performance is
an average of 800 tons per month and 9,600 tons per annum at an average selling
price of N245, 000 naira per ton giving
an income of N2, 352billion naira
annually, giving an adverse variance of N2,
058billion and this figure could increase if these challenges were not
addressed. The Researcher serves as the Executive Director in charge of
Administration and Marketing activities of the company and generally oversees
all facets of running the company such as purchasing and stocking up all raw
materials, all administrative, marketing and planning functions with the
exclusion of the operational production functions which is handled by semi
skilled artisans. The company has lasted the test of time as one of the pioneers in the vegetable oil industry in
Nigeria. Having developed good business relationship with its suppliers and
better bargaining powers than its competitors, PNL has created a niche for
itself by producing high quality vegetable oil which overtime has been the
choice of its customers. Despite increase in the company’s turnover in the last
decade from an annual turnover of N1million to a current turnover of
about N2billion, the company is not yet operating at its optimal. The researcher’s
company employs semi skilled male artisans based on the strenuous working hours
(continuous batch refining system) and conditions and the categories of low
skilled competences required, such as plant operators, electricians, welders,
boiler operators, maintenance operators etc. They work on
a 10/12 hour shift basis. These employees are mostly disgruntled and
belong to the lower cadre of the populace, of low level social background, poor
family conditions and limited education.
The autocratic style of leadership
coupled with no structural procedures (particularly in respect to financing
decisions) in place is affecting the strategic planning of the company.
Management is also faced with the problem of human, financial and fixed asset
resources being allocated haphazardly. The company has inexperienced finance
personnel who lack focus and direction in achieving financing, investing and
operating decisions of the company.
Consequently, objectives and goals are not clearly defined and performance
cannot be evaluated. PNL has also faced some other external challenges such as
competitive rivalry to threats from new entrants into the industry which has
eroded the revenue of the company. The unforeseen circumstances surrounding PNL
such as inflation, economic/political instability, and change in Government
policies, regulations and technological advancement contributed to the challenges faced by the
company. In addition to the above, a single customer who accounts for about 75%
of the company’s revenue is of great concern to the Management since most of
the revenue comes from the customer and as such PNL is vulnerable to an extent.
In conclusion, threat of close substitutes such as Soya bean, Palm Olein,
Sunflower, Olive oil, etc and intense competition in the industry has affected
the returns and profitability of the company. All these have led to
non-achievement of the objectives and strategic mission and vision of the
organisation. Management’s questions is
how to find a root cause to this declining and how to orientate
employees to perform optimally by managing them in the best possible way to
enhance productivity to achieve the company’s goals and objectives and in turn affect profitability and growth (Price, 2007). In
order to fill the present vacuum in the human resource management of the
company and to take the company to the next level, it has become a dire
necessity to establish an effective and efficient Performance Management
1.2 PROBLEM STATEMENT
The company is faced with the
challenge of disgruntled employees, absenteeism, staff retention issues and in
turn poor performance and inability to meet PNL’s objectives and goals. The
style of leadership coupled with haphazard human, financial and fixed asset
resources allocation and lack of a reward system to motivate employees are also
part of the challenges. There is also the problem of competitive rivalry and
threats from new entrants and substitutes in the market to unforeseen issues of
inflation, economic/political instability and changes in Government policies
and regulations and technological advancement. As a result of all these
challenges, employees’ productivity and performance have been declining.
Management’s dilemma is how to
address these issues and have an efficient and effective workforce. Management
needs to put a performance management system in place to address the problems
and achieve the company’s goals and objectives of productivity, profitability
1.3 PURPOSE OF STUDY
The main purpose of this study is to
develop a performance management system in Pioneer Nigeria Limited to increase
productivity, profitability and to achieve a result oriented company.
1.4 OBJECTIVES OF STUDY
Arising from the purpose of study,
the following research objectives were raised to:-
the effects of performance management on company’s income and profitability.
the impact of organisational structure and culture on employee performance.
the causes of poor employee performance in the researcher’s company.
the effect of staff retention and turnover on performance.
5. Adapt a
model or theory of performance that fills the gap on performance.
1.5 RESEARCH QUESTIONS
Based on the objectives of study,
the following research questions were
1. How would performance
management affect the company’s income and profitability?
2. How does the
current organisational structure and culture impact on employee performance?
3. What are the
causes of poor employee performance in the researcher’s company?
4. What is the
effect of staff retention and turnover on performance?
relevant model or theory of performance can be adapted to fill the gap on
1.6 THEORETICAL FRAMEWORK
The theoretical framework was based
on the model by Gevity Institute Cornell University (2007) the works of Horwitz
(2009) and the balanced scorecard model framework by (Kaplan & Norton 1992;
The performance management model by
Gevity Institute Cornell University (2007:2-14) on managing employee
performance for business success framework design highlighted that an effective
performance management system supports a company’s approach to managing
employees and achieving financial goals. A
performance management system impacts an organisation in three key areas –
business strategy, employee management and employee development. Understanding
the potential benefits in each area would help design a performance management
system that produces the best results for the company.
The theoretical framework on
performance best practices by Horwitz (2009) identified the following nine key
factors for an effective Performance management system with emphasis on manager
Including development plans for the future.
Providing training to managers.
Measuring the quality of performance appraisals.
Resolving poor performance.
Getting beyond the judgment of Managers.
Making it consistent across the organisation.
Ensuring that feedback happens regularly.
Using performance reviews to support the performance
Including ongoing goal review and feedback.
The balanced scorecard model
framework by Kaplan and Norton (1992:72) allows
managers to look at the business from four perspectives, the customer,
the internal business process, the learning perspective and the financial perspective.
Altogether, the balanced scorecard translates vision and strategy into
objectives and measures across these balanced sets of perspectives. By doing
so, the balanced scorecard includes measures of desired outcomes as well as
processes that drive desired outcomes
of the future.
1.7 SIGNIFICANCE OF STUDY
The study would be beneficial to
both management and the employees as a whole and as a research academic
framework for the company. The existing gap in performance and developing a
model that addresses the problem would be of immense benefit to the company. It
also addresses an existing problem with a practical solution.
It also helps to put training and
development processes in the HR procedure in the company. It would be a roadmap
for improved plans that would be beneficial to employees. The company would
also benefit from the performance management model as it would lead to
strategies that could only propel the company to a more rewarding position and give
that competitive edge advantage. Finally, the study would help organisations
that want to improve productivity and performance to obtain financial success
over its competitors, achieve same.
1.8 LIMITATION OF STUDY
This study is limited by the sample
size of the company as it is a small company with a size limited
to eighteen people. In addition, the research may be limited by the researcher
who serves as an Executive Director and some of the employees that have
personal biases. The respondents may give distorted information because they
desire to be favoured by management.
1.9 DELIMITATION OF STUDY/SCOPE
The influx of the Vegetable Oil
Industries has increased in the last five years. The study is limited to
Pioneer Nigeria Limited only.
1.10 RESEARCH PROCESS
Every research work requires
answering a question to stimulate or provoke change particularly in action
learning. The main goal of this study is to address the research question and
to conclude same within next 4 ½ months period. An additional goal is to serve
as a step for positive change in management’s effort to develop a performance
management system in the company. The research
design is a census study as all staff and management numbering eighteen were
sampled. The sampling method was by the qualitative and quantitative approach
whereby informal open interviews were held with employees and researcher
developed questionnaires were administered and analysed. Observations from
documentary evidence from the clocking cards were also analysed. Data was
analysed using statistical tools such as pie charts and percentages. Validity
ascertains the accuracy of the study’s research process, which was achieved
with both face and content validity. Preliminary analysis of data was done in
order to test the validity and reliability of research information. It was sent
for face and content validity based on judgment of the researcher and her
1.11 OPERATIONAL DEFINITION OF TERMS
The following terms defined below
are explained in the context they were used in this research work:
Vegetable Oil: This can be defined as the different kind of edible
vegetable oils including Olive oil,
Palm oil, Soya bean oil, Sunflower oil, Safflower oil, Peanut oil, Grape Seed
oil, Sesame oil and Rice bran oil. The generic term vegetable oil when used to
label a cooking product may refer to a
specific oil such as Rapeseed oil or a blend of variety of Oil as often based
on Palm kernel, Soya bean or Sunflower oils (wikipedia.org/wiki/cooking oil) .
and Allied Matters Act 1990: (The Companies Act) is the
principal law regulating the incorporation of businesses in Nigeria (Copyright
Factories Act 1987: This is explained as An Act to provide for the
registration etc of factories, to provide for factory workers and a spectrum of
workers and other professionals exposed to occupational hazards but for whom adequate provision has not been formally
made regarding the safety of workers to which the Act applies and to impose
penalties for any breach of its provision (International Labour Organisation,
Plant: is an industrial process Plant that manufactures or otherwise
processes chemical usually on a large scale (wikipedia.org/wiki/chemical Plant).
Refining: means processing a wide variety of crude oil for customers to their
individual and often diverse requirement and specification at a fee.
and Batch Operation: means
chemical processes run in continuous or batch operation production. In
continuous operation, all steps are ongoing continuously in time. The feeding
and product removal are ongoing streams of moving material which together with
the process itself all take place simultaneously and continuously.
NAFDAC: is the
National Agency for Food and Drugs Administration and Control (NAFDAC) is a
Nigerian government agency under the Federal Ministry of Health responsible for regulating and controlling
the manufacturing, importation, exportation, advertisement, distribution sale
and use of food, drugs, cosmetics, medical devices, chemicals and prepackaged
Employees: refers to
the workers of Pioneer Nigeria Limited and they are under twenty (20) in
Artisans: are apprentices and journey
men working for wages or piece rates with their hands without the aid of
powered machinery (Gale Encyclopedia, 2004)
Shift System: is a working system in a factory using shifts
i.e. with groups of workers who work for a period and are then replaced by
other groups (Economics- Dictionary.com). Pioneer operates a two shift system
for the semi skilled employees, from 7am to 7 pm and from 7 pm to 7 am six days
Management: is a means of getting better results from organisations, teams and
individuals by understanding and managing performance within an agreed
framework of planned goals, standards and attributes or competency requirements
Naira: is the
official currency of Nigeria and officially about 155 Naira is exchanged for
The Researcher has looked at the
concept of performance as it relates to employees within an organisation and
the correlation of performance with motivation, incentives and rewards. The
next chapter reviewed the literatures of vast authorities and relevant
information to this research on the performance management system concept.
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