PERFORMANCE APPRAISAL AS TOOL FOR IMPROVING PRODUCTIVITY IN AN ORGANIZATION (A STUDY OF NIGERIA BREWERY PLC, LAGOS STATE, NIGERIA)

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Product Code: 00002154

No of Pages: 101

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ABSTRACT

The success of an organisations is ascribed to performance management strategies put in place by the firms. Performance appraisal policy of an organization determines its productivity. It is in light of this, that this study aims to examine performance appraisal as a tool for improving productivity in an organization with focus on Nigeria Brewery Plc, Lagos State, Nigeria. Descriptive survey research design was adopted for the study. The population was 267 comprising of the entire staff of the Corporate Office located at Iganmu, Lagos State. Taro Yamane formula was used to derive the sample size of 160. A structured questionnaire was administered resulting in a response rate of 94%. The instrument was validated using face and content validity and both test-retest and pilot testing techniques  were used to determine reliability of the instrument. The data gathered was analyzed with the aid of Statistical Package for Social Sciences (SPSS) version 21.0 software involving frequency distributions and Analysis of Variance (ANOVA). Findings showed that indeed the four context of performance management had a significant effect on employee productivity. The four (4) formulated hypotheses were tested with all resulting to rejection of the null hypotheses. The result of hypothesis 1 showed ( p = .024, p < 0.05 ). Hence the alternate hypothesis was accepted conclude that relationship exists between performance appraisal and organization productivity. The result of hypothesis 2 showed ( p = .015, p < 0.05 ). Hence the alternate hypothesis was accepted conclude that performance appraisal has effect on staff quality. Hypothesis 3 showed ( p = .033, p < 0.05 ). Hence the alternate hypothesis was accepted conclude that training programs has impact on organisation’s productivity, and hypothesis 4 showed ( p = .014, p < 0.05 ). Hence the alternate hypothesis was accepted conclude that performance appraisal feedback has impact on employee productivity. The study among other recommendations, recommended that organisations should encourage their members of staff by giving them regular positive feedback and compensate them fairly to improve productivity.


Keywords: Performance Appraisal, Productivity, Feedback, Training, Compensation.

Word Count: 332

 

 

 

 

TABLE OF C ONTENTS

 

Title Page                                                                                                                                i

Certification                                                                                                                            ii

Dedication                                                                                                                              iii

Acknowledgement                                                                                                                  iv

Abstract                                                                                                                                  v

Table of Contents                                                                                                                   vi

 

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study                                                                                           1

1.2       Statement of the Problem                                                                                           4

1.3       Objectives of the Study                                                                                              5

1.4       Research Questions                                                                                                     6

1.5       Research Hypotheses                                                                                                  6

1.6       Significance of the Study                                                                                           7

1.7       Scope of the Study                                                                                                     7

1.8       Limitations of the Study                                                                                             7

1.9       Operational Definition of Terms                                                                                 8

References                                                                                                                              10

 

CHAPTER TWO

LITERATURE REVIEW

2.0      Introduction                                                                                                                 12

2.1       Conceptual Framework                                                                                               15

2.1.1        Concept of Performance Appraisal                                                                             15

2.1.2        Concept of productivity                                                                                             23

2.1.3        Concept of Employee Productivity                                                                            26

2.1.4        Concept of Motivation                                                                                               27

2.2       Theoretical Framework                                                                                               28

2.3.1    Equity Theory                                                                                                             29

2.3.2    Development Theory                                                                                                  29

2.3.3    Vroom’s Expectancy Theory                                                                                      30

2.3.4    Equity Theory                                                                                                             32

2.3.5    The ERG Theory of Motivation                                                                                 33

2.3       Empirical Review                                                                                                        35

2.3.1    Training and Employee Productivity                                                                          35

2.3.2    Feedback and Employee Productivity                                                                        39

2.3.3    Compensation and Employee productivity                                                                40

2.3.4    Performance Appraisal and Employee Productivity                                                   43

2.4       Historical Background of Nigeria Brewery Plc                                                          48

2.5       Summary and Gaps in Literature                                                                                50

References                                                                                                                              52       

CHAPTER THREE

RESEARCH METHODOLOGY

3.1       Research Design                                                                                                         60

3.2       Population of the Study                                                                                              60

3.3       Sample and Sampling Technique                                                                                60

3.4       Research instruments                                                                                                  61

3.5      Validity of the Instrument                                                                                           62

3.6       Reliability of the Instrument                                                                                       63

3.7       Method of data collection                                                                                          63

3.8       Data analysis technique                                                                                              64

 

CHAPTER FOUR

DATA ANALYSIS AND DISCUSSION

4.0       Preamble                                                                                                                     65

4.1       Socio-Economic and Demographic Information                                                        65

4.2       Data Analysis: Answering Research Question and Testing Hypothesis                    67

4.2.1    Response to Research Questions                                                                                68

4.2.2    Test of Hypotheses                                                                                                     75

4.2.2.1             Test of Hypothesis One                                                                                  76

4.2.2.2             Test of Hypothesis Two                                                                                  76

4.2.2.3             Test of Hypothesis Three                                                                                77

4.2.2.4             Test of Hypothesis Four                                                                                 78

4.3       Discussion of Findings                                                                                               78

CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1       Summary                                                                                                                     81

5.2       Conclusion                                                                                                                  81

5.3       Recommendations                                                                                                      82

5.4       Contributions to Knowledge                                                                                      83

5.5       Suggestion for Further Studies                                                                                   83

References                                                                                                                              85

Appendix I: Questionnaire Cover Letter                                                                                93

Appendix Ii: Research Questionnaire                                                                                     94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

 

1.1       Background of the Study

The main aim of every manufacturing organization is to improve its productivity but this can never be possible without the efficient performance of employees and one of the major challenges facing many countries has been the need to improve the performance of employees. Therefore, Performance Appraisal came into effect as a human resource management reform to address and redress concerns organisations had about performance (Amir, 2012). Performance appraisal has been seen as a tool which focuses on managing the individual and work environment in such a manner that an individual or team can achieve set organizational goals (Esu & Inyang, 2011). However, performance appraisal has come to signify more than a list of singular practices aimed at measuring and adapting employee performance. Rather, it is seen as an integrated process in which managers work with their employees to set expectations, measure and review results and reward performance, in order to improve employee performance, with the ultimate aim of positively affecting organisational success (Mondy & Noe, 2012).

Performance appraisal has been used as a tool to enhance employees’ productivity by managing their performance (Poister, 2013) specifically, it intends to improve accountability, performance, communication, efficiency and productivity among employees. Sheriff, Alibaba, and Aliyu (2012) gave an understanding to the concept of employee productivity that implies the level or degree of output achieved from a defined input, it is rather more serious as it has been found that it forms the core of achievement of corporate goals and objectives, production, market, and sustainability of organizations in the manufacturing industry. Effective utilization of performance management is critical to enhance organizational performance, so as to achieve a competitive position in global marketplace (Kovacic, 2012; Neely, 2011; Neill & Rose, 2013).  

In the last 30 years, Performance appraisal has remained a static process that consisted primarily of an annual appraisal. Today, Performance appraisal is one of the principle tools executives, line managers, and employees are able to use to achieve their collective goals (Potgieter, 2014).

The importance of performance appraisal in contemporary business organizations cannot be overemphasized. Some view it as potentially "the most crucial aspect of organizational life” (Franklin, Richard, & 2014). Performance appraisal has increasingly become an integral part of the human resource function of any profit - making organization.

Performance appraisal when practised effectively, to a larger extent can contribute to growth of an organization.

Jennifer and George (2011) defined productivity as the level of effort put forth by the workforce of an organization towards achieving organizational goals and objectives.  Organizational productivity cannot be a reality if the performance of its workers is not appraised for an improvement or reinforcement of performance. According to Donegan (2012), "success will to a larger extent depend on the organization's ability to evaluate progress and also hold accountable those charged with executing certain tasks". This is exactly what performance appraisal seeks to do. It aims at evaluating the performance of the worker against standard set thereby taking corrective actions if necessary.

In many organizations performance appraisal is used for the purpose of administering wages and salaries after feedback had been given to the worker. The appraisal also helps management to identify individual employee's strength and weakness. The latter will lead to training and other measures to correct inefficiencies. 

Performance appraisal may be viewed as an overall measure of organizational effectiveness. Organizational objectives are met through the efforts of individual employees. Teaching employees how to do their jobs and evaluating their performances are strategic human resource function and for that matter should not be relegated to the background. 

"Maximizing performance is a priority for most organization today", (Gundecha, 2012). It is then obvious that performance appraisal as a management tool is cardinal to contributing to organizational success. If employee performance is improved, the organization raises it performance in terms of meeting it objectives. On the other hand, if employee performance is not improved it adversely affects performance hence organizational productivity. 

Performance appraisal cannot exist independently. It needs to be closely linked to set standards by managers and supervisors. This will in the end have direct effect on the main goal of the organization. There is the need therefore to have a well-defined appraisal system in organizations to enable management know how well individual workers are performing on their job and if there is the need to improve performance or reward performance. 

Although there is a plethora of studies on the reasons why businesses failed, it was argued that most public sector businesses and industries have failed because of ineffective and inefficient implementation of performance appraisal (Esu, 2013). The performance of businesses is predicated on several factors. Many businesses have failed to meet the objective or purpose of its formation. This has been the experience in all economies. It is more worrisome in the developing economics of the world where managers lack the requisite managerial skills in management. It is one thing to formulate individual and organizational objectives, and another thing is to achieve the set targets, sustain task-level and later improve on performance. The fact that most of the businesses (both large and small scale business) that we see in our communities, states and country are no more in existence, means that something is wrong somewhere especially in the absence of performance appraisal which contributes to the high rate of business failures in Nigeria (Ellis & Chinedu, 2011). Hence, the foregoing sets the pace for an understanding of performance appraisal as a tool for improving productivity in an organization with reference to Nigeria Brewery Plc.

 

1.2       Statement of the Problem

Performance has played significant roles in organizational productivity. However, it is pathetic to note that most organizations have not been practising a sustainable performance appraisal system to enhance efficiency of its employees. 

The essential point of each business organization is to accomplish its destinations, objectives or targets effectively. So as to accomplish this, there is the need to focus on performance appraisal. Most of the companies in the competitive market come up short of this since their specialists perform below standards for they are not encouraged to work harder. Directors and workers are the blood of each business organisation. In the event that management does not put much into the welfare of their workers, issues will undoubtedly emerge prompting modern strike activities, low commitment to work, low confidence and low efficiency of products and services. 

In Nigeria most of the performance appraisal exercise/program are not well designed and focused.  Management of organization tends to view it as a punitive measure.  This makes it lose its objectives and focus, performance appraisal  no longer seek to actualize its objective of correcting deviations, hence increasing productivity and jettison all hindrances that tends to hinder productivity.  But sometimes it is being used as a tool for subordination oppression, victimization and exploitation of under-deprived employees.

Some organizations though invest so much in other factors of production such as machinery, information technology, funds but unfortunately place little value on manpower development. In this regard, little attention is directed to improving the human capital which is the anchor of every organizational success story. Improving manpower requires that performance appraisal becomes an essential tool to assess the individual employee and should be based on consistent feedback such that an appropriate reward system could be ascribed so that measures for correction could be put in place. 

Lack of consistent or regular performance appraisal system in most organizations unfortunately makes assessment of individual employee extremely difficult and in that vein most organizational targets are not periodically achieved hence the lack of direction and low productivity. 

 

1.3       Objectives of the Study

The specific objective of this study is to examine performance appraisal as a tool for improving productivity in an organization with special reference to Nigeria Brewery Plc.

The other objectives of the study are: -

i.                    To assert if relationship exists between performance appraisal and organization productivity.

ii.                  To examine the effect of performance appraisal on staff quality

iii.                To investigate whether performance appraisal technique adopted by Nigeria Brewery has effect on productivity.

iv.                To determine the impact of performance appraisal feedback on employee productivity

 

1.4       Research Questions

As pointed above, the objectives of this study is to find out the relevance of performance appraisal to organisation's productivity. In doing this, the following questions are put forward;­

i.                    Is there any relationship between performance appraisal and organization productivity?

ii.                  To what extent does performance appraisal affect staff quality?

iii.                How effective is the performance appraisal technique adopted by Nigeria Brewery?

iv.                What impact does performance appraisal feedback has on employee productivity?

 

1.5       Research Hypotheses

In view of the problem that prompted this research, also in line with the objective mentioned above, the following hypotheses are formulated and will be tested in the cause of this research.

Hypotheses I

Ho:      There does not exist relationship between performance appraisal and organization productivity

Hi:       There exists relationship between performance appraisal and organization productivity

Hypothesis II

Ho:      Performance appraisal does not have effect on staff quality

Hi:       Performance appraisal has effect on staff quality

Hypothesis III

Ho:      Training programs does not have impact on organisation’s productivity 

Hi:       Training programs has impact on organisation’s productivity.

Hypothesis IV

Ho:      Performance appraisal feedback does not have impact on employee productivity

Hi:       Performance appraisal feedback has impact on employee productivity

1.6       Significance of the Study

This study will provide a good base for general knowledge of the concept, as past work on the subject matter will be reviled. More also, it will be empirically useful, the practical use of performance appraisal in business organizations.

The study will be useful to the organization in that the recommendation from the finding of this research can be used as a means of improving the efficiency of employees in the organization. And lastly, the findings can be used in designing an effective appraisal system for most organisations to adopt.

 

1.7       Scope of the Study

Owing to the vast size of the manufacturing sector and the boundless nature of the subject of performance appraisal and organization productivity, this research would not be exhaustive. The scope of the study would be limited to personnel of the Nigeria Brewery Plc.

 

1.8       Limitations of the Study

Wide research of this nature cannot be carried out without some constrains. The constrains that are envisaged to pose limitation to this research work include; shortage of time, lack of finance, uncooperative respondents, non-knowledgeable respondents, respondents’ bias in answering questions, inaccessibility to information termed confidential, inaccessibility of respondents and no response from some respondents.

 

 

 

1.9       Operational Definition of Terms

Some of the terms used in this study are defined as follows:

Performance Appraisal: This is the undiluted procedure whereby every organization takes stock of its human resources (manpower) with regard to its present performance, the likes and dipsticks of each individuals, his/her strengths and weaknesses and his/her potential growth.

Appraisal: Is a judgement of the value performance of nature of a subordinate by a supervisor.

Appraise: A person whose performance is being appraised.

Appraiser: A person who appraise the performance of another.

Manager: Any employee who controls other employees towards the achievement of the corporate goals.

Subordinate: Is a person who has a position with less authority and power than somebody else in an organization.

Superior: Is a person who is higher in rank and importance or position in an office or an organization.

Feedback: Report about employees its contribution to the success of the organization.

Under-Performing Employees: Refer to those employees who perform below average or those employees who normally do not meet targets set for them.

Growth: This refers to the general improvement of performance of the organization.

Productivity: Refer to being productive or production of goods, it is also regarded as an output.

Development: It aims at adding to the skills of employees, improving their general knowledge and altering their attitudes.

Demotion:  A shift to a lower position in the hierarchy.

Placement: Assigning employees to their different jobs that they are best suited.

Promotion: A shift to higher position in the hierarchy, usually with added salary, statues and authority.

Recruitment: This is the process of attracting or hiring candidates among the qualified ones.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Amir, M. S., (2012). Benchmarking performance management systems. An International Journal, 9(1), 62 - 85

Donegan, M.C., (2012) Growth and Productivity – Optimizing the financial Function for small and Emerging Business, John Wiley and Sons Inc, Neto Jerssey pp 233

Ellis, I. I. & Chinedu, O. (2011). Performance management as an imperative for effective performance in delta state of Nigerian public owned organizations. Sacha Journal of Policy and Strategic Studies, 1(2) 46-54.

Esu, B. B. (2013). Introduction to marketing. Calabar, Nigeria: Jochrisam Publishers.

Esu, B. B., & Inyang, B. J. (2011). A Case for Performance Management in the Public Sector of Nigeria. International Journal of Innovative Research & Development, 4(4), 56.

Franklin, D. K., Richard, C. & Anis, M. K. (2014). The impact of training and development on employee performance: A case study Of ESCON consulting. Singaporean Journal of Business Economics, And Management Studies, 3(3), 234-250.

Jennifer, M. & George, G. R. (2012). Contemporary Management. Creating value in
organizations. New York, USA: McGraw-Hill/Irwin.

Kovacic, A. (2012), Benchmarking the Slovenian competitiveness by system of indicators, Benchmarking: an International Journal, 14(5), 553-574.

Lillian, G. O., Mathooko, P., & Sitati, N. (2011). The effects of performance appraisal
system on civil servants. Kabarak University First International Conference, Kabarak.

 Mondy, W. & Noe, R. (2012).  Human resource management. New Jersey: Prentice Hall.

Poister, T. (2013). Measuring performance in public and nonprofit organizations. San-Francisco : Jossey- Bass.

Potgieter, L. (2014). Performance Management. Journal of Information System, 4(6), 5-9

Sharma (2012) An evaluation of the effectiveness of performance appraisal process in Organizations: A case study of KERIO VALLEY Development authority. Journal paper of “International Journal of current research”

Sheriff, B., Alibaba, S. & Aliyu, I. (2012). The effect of human resource management on productivity of workers in Nigeria. Journal of Business and Organizational Development, 4, 54-59.

 

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