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Wednesday, March 23, 2011

The Impact of Employees’ Performance Appraisal on Productivity: A PROJECT WORK BY F. SENUNYEME, K. ACHEAMPONG & D. ADZAH IN HO POLYTECHNIC, GHANA



CHAPTER ONE

1.0 INTRODUCTION/BACKGROUND STATEMENT

In every business organization, the performance of the employees is important in achieving organizational goals. The success of every business organization can therefore be attributed to performance appraisal. Performance appraisal is one of the basic tools that make workers to be very effective and active at work. A critical look out on this may bring about the need for motivation, allowances, development, training and good human relationship in an organization.

Performance appraisal is defined as “a structural formal interview between subordinate and supervisor, that usually takes the form of periodic interview (annually or semi-annually), in which the work performance of the subordinate is examined and discussed, with the view of identifying the weaknesses as strengths as well as opportunities for improvement and development” (DEcENZO and Robbins, 1995: 358).

The output of every organization depends on how well and how much the performance of the employee is appraised and evaluated.

Productivity can therefore be defined as “quality or volume of the major product or services that an organization provides”. In short, productivity is what comes out of production. Managers of every business organization are charged with the responsibility to motivate their employees to achieve organizational goals.

Without a good product to sell, problems in an organization are bound to rise.

1.1 PROBLEM STATEMENT

The basic aim of every business organization is to achieve its objectives, goals or targets successfully. Goals set by organization will only be in vain if much attention is not paid to employees’ effort or performance for successful accomplishment. In other to achieve set goals and objectives successfully, there is the need to focus on performance appraisal. Performance Appraisal should be linked to attractive incentive to employees, enabling workers to demonstrate higher productivity.

Most organizations in the competitive market fail since their workers perform below standard for they are not encouraged to work harder. Managers and employees are the life blood of every business organization. If management does not invest much into the welfare of their workers, problems are bound to rise leading to industrial strike actions, low commitment to work, low morale and low productivity of goods and services.

Attractive appraisal systems are established by some business organizations to help motivate their employees to strike hard to be recognized and rewarded. Once employees are motivated, their performance reflects on productivity. Employees strive hard by pooling together skills, knowledge and efforts to achieve maximum output. Hence the essence of this paper is to find out the part played by performance appraisal.

1.2 OBJECTIVES OF THE STUDY

The aims of this study are;

  • To help managers assess training development needs of employees.
  • To make it possible for management to be able to attract and retain suitable employees through performance appraisal.
  • To help managers review past performance and improve current performance.
  • To provide employees with necessary information pertaining to recognition of their work.

1.3 SIGNIFICANCE OF THE STUDY

The findings of the study will not only be beneficial to the personnel of the chosen organization, but also to every individual. It will also;

Ø Help managers in other organizations in setting goals and targets for employees to achieve through proper supervisory control by line managers.

Ø Aid in identifying and improving the training and development needs of workers.

Ø Assist in motivating employees who contribute effectively to the attainment of organizational goals and objectives.

Ø Help managers to know how to appraise the performance of their workers.

1.4 RESEARCH METHODOLOGY

This Section elaborates in details the procedure the researchers will use in collecting data. It entails how the topic under review will be examined and why some techniques will be preferred to others. It must be noted that a good data must be reliable, credible and relevant. So as to achieve a good result of this research, techniques or methods which will be convenient to use are employed under specific situations to give an accurate, valid, logical and satisfactory analyses of the data.

In lieu of this, the researchers wish to discuss the topic under the following headings;

  • Area of Study.
  • Population.
  • Sampling Size and Techniques.
  • Techniques or Methods of Data Collection.
  • Order or Tools of Data Presentation.

1.5 SCOPE OF THE STUDY

Ghana Water Company Limited (GWCL), Ho.

1.6 LIMITATION OF THE STUDY

The following are the problems faced by the researchers whilst carrying out the research;

  • Inadequate orientation about the study.
  • Inadequate time to carry out the research or study.
  • Reluctance on the part of the respondents to give all the needed information with fear of being reprimanded by their superiors.
  • Inadequate funds to support the study or research.




CHAPTER TWO

2.0 LITERATURE REVIEW

This chapter provides an understanding of employees’ performance appraisal and its impact on productivity which covers skills development. To throw more light on employees’ performance appraisal on productivity, the literature review will comprise the following;

PERFORMANCE APPRAISAL DEFINED

It is a structural formal interview between subordinate and superior that usually takes the form of periodic interview (annually or semi-annually) in which the work performance of the subordinate is examined and discussed, with the view to identifying the weakness and strength as well as opportunity for skills and development (DEcENZO and Robbins, 1995: 358).

Performance refers to the degree of accomplishment of the task that makes an employee’s job. It reflects how well employee is fulfilling the requirement of the job.

Performance appraisal is “the process of observing and evaluating an employee’s performance, recording the assessment and providing feedback to the employees” (Daft and Marcic, 1998:368).

Performance appraisal is “a formal assessment of how well employees are doing their job”. Thus employees’ performance should be evaluated regularly for many reasons. Some of these reasons are;

  • It may be necessary for validating selection devices or assessing the impact of training programs.
  • It is administrative- that is it aids in making decisions about pay raises, promotions and training.
  • To provide feedback to employees to help them improve their performance and plan future careers. (Griffin,1999:430)

2.1 DETERMINANTS OF PERFORMANCE

According to Bue and Byars (2005: 393) “job performance is the net effect of an employee’s effort as modified by abilities, role perceptions, and efforts”. This implies that performance in a given situation can be viewed as resulting from the interrelationship among efforts, abilities and role perceptions.

Abilities are personal characteristics used in performing a job. Abilities usually do not fluctuate widely over a short period of time.

Efforts are the resulting factor of being motivated; it refers to the amount of energy an employee uses in performing a job.

Role perception refers to the direction in which employees believe they should channel their efforts on their job.

2.2 CAUSES OF POOR PERFORMANCE

Absenteeism and Lateness: Absenteeism is when an employee does not come to work base on certain reasons that may be tangible or intangible whilst lateness is considered to be the rate at which an employee comes to work after the actual time schedule for reporting to work.

Lack of ability or knowledge: Employees’ performance can be attributed to lack of knowledge. If employee with low knowledge is employed, it is very difficult for him or her to accomplish task that he or she does not know much about.

Alcoholism and drug abuse, medical problems and stress are some of the contributing factors to poor performance in an organization.

2.3 STEPS IN APPRAISING PERFORMANCE

To Nickels et al (2005: 342), the following steps must be followed for clear understanding of what performance appraisal entails. These steps are;

  • Establishing Performance Standards:

This is a crucial step. Standards must be understandable subject to measurement and be reasonable. They must be accepted by both the manager and the subordinates.

  • Communicating those standards:

Often, managers are sure that employees know what is expected of them, but such assumptions are dangerous at best. Employees must be told and precisely what the standards and expectations are and how they are to be met.

  • Evaluating Performance:

If the first two steps are done correctly, performance evaluation is relatively easy. It is a matter of evaluating employee’s behaviour to see if it matches standards.

  • Discussing result with employees:

Initially, most people will make mistakes and fail to meet expectation, as it takes time to learn a new job and does it well.

Discussing an employee’s success and areas that need improvement can provide managers with an opportunity to be understanding and helpful and to guide the employee to better performance.

Moreover, the performance appraisal can be good source of suggestion on how a particular task could be better performed.

  • Taking Corrective Action

As an appropriate part of the performance appraisal, a manager can take corrective action or provide corrective feedback to help the employee perform his or her job better. The primary purpose of conducting this type of appraisal is to improve employee performance if possible.

  • Using the Result to Make Decision

Decision about promotion, compensation, additional training and firing are all based on performance evaluation. An effective performance appraisal system is a way of satisfying certain legal concerning such decision.

2.4 METHODS FOR APPRAISING OF EMPLOYEES

Again, Bue and Byars (2005: 397) commented that “performance appraisal is an evaluation in which the performance level of employees is measured against established standard to make decision about promotions, compensation, additional training or firing”. Performance appraisal consist of three main methods, these are:

  • Rating System Method:

It is the method of appraisal where employees are rated on a scale against certain characteristics such as excellent, very good, good, satisfactory, fair and poor. Rating methods of appraisal often ends to cluster in the middle that is between excellent and poor.

Rating methods also has a halo impact that is, on graded characteristics is likely to influence another. This is because any performance factor considered by management to be acceptable, the manager reiterates the required standards and agreement is reached on steps to improve performance or if an appraisal rates work knowledge as very good, it will be difficult for him to rate work output as poor.

The rating has thus been found to be an inappropriate method unless the rating characteristics have been adequately explained.

  • Descriptive Method

This system of appraisal requires the appraiser to give a rating profile on the performance of appraise on his achievement and failures, that is, his strength and weaknesses. The main advantage with this method is that, the appraiser is free to write a detailed assessment of the appraisee.

The limiting factor here is that, if the appraiser has not got control over the language he is using to conduct the appraisal, as result he may not be able to give fair assessment of the employee being appraised. If the appraisee is not highly favoured by the appraiser, they later may live information which may be detrimental to appraise.

  • Management by Objective (MBO) :

This method is based on the principle of management by objective where the appraiser and the appraisee lay down standards or target to be achieved. Appraises actual performance is measured against the standards or target set at the end of a specific period. This system serves as motivation to influence appraisee to achieve the target or standard set because it is noted to raise the morale of employees and for that matter the appraisee since he is involved in the whole processes of appraisal.

In most cases appraising employees generally takes one year. But it will be advisable for management to conduct interviews purposely for employees’ appraisal.

2.5 ERROR IN PERFORMANCE APPRAISAL

According to Bue and Byars (2005: 394) several errors have been identified in performance appraisals. These are:

Leniency

It is the grouping of ratings at the positive end of the performance scale instead of spreading them throughout the scale.

Central tendency:

This occurs when the performance appraisal statistics indicates that most employees are evaluated similarly as doing average or above-average work.

Recency:

It comes when the performance evaluation are based on work performed recently, generally work are performed one or two months before evaluation.

Leniency, central tendency and recency errors makes it difficult, if not impossible, to separate the good performers from the poor ones. In addition, these errors make it difficult to compare rating from different managers. For example, it is possible for a good performer who is evaluated by a manager for committing central tendency errors to receive a lower rating than a poor performer who is rated by a manager for committing leniency errors.

Halo Effect

This occurs when managers allow a single prominent characteristic of employees to influence their judgment on each separate item on the performance appraisal. This often results in the employee receiving approximately the same rating on every item.

Personal performance, prejudice and biases can also cause error in performance appraisals. Managers with prejudices or biases tend to look for employee behaviour that conforms to their biases.

Appearances, social status, dress, race and sex have influenced many performance appraisals. Managers have also allowed first impressions to influence later judgment of an employee.

First impressions are only a sample of behaviour however; people tend to retain these impressions even when faced with contradictory evidence.

2.6 OVERCOMING ERRORS IN PERFORMANCE APPRAISAL

Bue and Byars (2005: 395) again gave some promising approach to overcoming performance appraisals is to improve the skills of managers. Suggestions on the specific training managers are often vague, but they usually emphasize that managers should be given training to observe behaviour more accurately and judge it fairly. More research is needed before a definitive set of topics for managers training can be established.

However, at a minimum, managers should receive training in;

  • Ø The performance appraisal methods of the company.
  • Ø The performance of managers’ role in the appraisal process.
  • The use of performance appraisal information.
  • The communication skills necessary to provide feedback to the employees.

2.7 LEGAL ASPECT OF PERFORMANCE APPRAISAL:

To Bue and Byars (2005: 396), performance appraisal systems are not considered to be legal when their application results in adverse effects on employees. It is not practical to provide an exhaustive analyses of the legal implication of performance appraisal as may vary from one state or country to another. Many suggestions have been offered to make performance appraisal system more legally acceptable. Some include;

  • Ensuring that the results of the appraisal are communicated to employees.
  • Emphasizing work behaviour rather than persona traits.
  • Performance appraisal should not be used to discriminate against employees on the basis of race, religion, age gender, disabilities, pregnancy or sexual preferences.
  • Ensuring that employees’ are allowed to give feedback during the appraisal interview.
  • Appraisal should be balanced, thus recording information on both good and bad aspects of employees’ performance.
  • Performance appraisal should be consistent with personal decisions.
  • An employee should have the opportunity to comment on their appraisal results, express their agreement or otherwise.
  • Performance should be written, documented and retained.


CHAPTER THREE

RESEARCH METHODOLOGY

3.0 INTRODUCTION

This chapter deals with the methods the researchers used in gathering and analyzing data collected. As to achieve a good result of this research work, the data collected must be reliable, credible and relevant. Therefore, techniques or methods which will be convenient to use were employed under specific situations to give an accurate, valid, logical and satisfactory analyses of the data. This chapter includes the following;

  • Area of Study
  • Sampling Size and Techniques Used
  • Types of Data
  • Techniques or Methods of Data Collection
  • Order or Tools of Data Presentation

3.1 AREA OF STUDY

The researchers chose the Volta Regional Branch of the Ghana Water Company Limited (GWCL) in Ho as the area of study. This enabled the researchers to seek relevant information to be able to come out with relevant findings, conclusions and recommendations.

3.2 SAMPLING SIZE AND TECHNIQUES

For this research work, purposive sampling method was used to collect information. This method was used since the researchers worked with small samples in the case study and thus selected cases that are particularly informative.

3.2.1 PURPOSIVE SAMPLING

Purposive or judgmental sampling enables you to select case that will best enable you to answer your research questions and to meet your objectives. Here, the researchers purposely choose respondents who in their opinion are thought to be relevant to the research topic. They selected employees that are judged to be best in expressing of views of the group (Azila-Gbettor, 2008: 79).

3.3 TYPES OF DATA

With regards to the data collection procedure, the researchers relied on both primary and

secondary data collection.

3.3.1 PRIMARY DATA

This refers to data collected expressly for a specific purpose. It is the first recording of information and contains complete and accurate data collected by the researchers themselves. Thus, data is collected through questionnaires, observation and case studies (Azila- Gbettor, 2008: 81)

3.3.2 SECONDARY DATA

This method involves both raw data and published summaries or qualitative and quantitative data and they can be used in both descriptive and explanatory research. These include documentary, survey based secondary data (Azila- Gbettor, 2008: 81)

3.4 TECHNQUES OR METHODS OF DATA COLLECTION

In order to obtain much information, the researchers considered relevant methods or techniques of collecting data such as questionnaires in the case study, interviews and relevant books in the library.

3.4.1 INTERVIEWS

This is a purposeful discussion between two or more people or it is a form of questioning characterized by the fact that verbal questioning is used as its principal technique of data collection. It can be either through telephone or by face-to-face (Azila- Gbettor, 2008: 89)

3.4.2 QUESTIONNAIRES

According to the oxford advanced learners dictionary (seventh edition), “a questionnaire is a written list of questions that are answered by a number of people so that information can be collected from the answers”. Thus, a questionnaire is a technique of data collection where different people are asked to respond to the same set of questions in a predetermined order. It includes structured interviews and the telephone questions as well as those in which the questions are answered without an interviewer being present.

3.5 ORDER OF PRESENTATION

To have a good presentation to ensure easy understanding and clarification of information collected or gathered, pie charts, percentages and tables were used.

CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION

4.0 INTRODUCTION

This chapter aims at presenting the data gathered from the questionnaires administered for the people and personal contacts in relation to the various objectives advanced in the various parts of the study. The data collected on the study is clearly presented and analyzed. The researchers based their presentation on the major activities used in the questionnaires. These are;

  • Personal Data
  • Methods of appraising on good performance
  • The influence of appraisal on good performance
  • Level of favouritism on appraisal
  • How often performance appraisal is undertaken at work place
  • Performance appraisal as an ongoing process in the company
  • Feedback information on performance appraisal
  • Identification of weaknesses and strengths of performance appraisal
  • Assessment of performance in relation to appraisal.

4.1 PERSONAL DATA

Table 4.1 Sex/Gender of Respondent

GENDER

FREQUENCY

PERCENTAGE (%)

MALE

30

70

FEMALE

20

30

TOTAL

50

100

Source: Field survey, July 2009.

The table above shows the number of male(s) and female(s) interviewed and those who answered the questionnaires. In all 50 employees were consulted, 70% were male and 30% were female.

Table 4.2 Age Limit of Respondents

AGE RANGE

FREQUENCY

PERCENTAGES (%)

20-29

8

16

30-39

13

26

40-49

18

36

50-ABOVE

11

22

TOTAL

50

100

Source: Field Survey, July 2009.

The table above indicates the age range of employees interviewed and consulted with questionnaire. From the table, employees ranging from the ages of 40-49 are majority.

Table 4.3 Educational Level of Respondents

EDUCATIONAL LEVEL

FRQUENCY

PERCENTAGE (%)

DEGREEO

UNIVERSITY/

POLYTECHNIC

25

50

180

PROFESSIONAL

15

30

108

OTHERS

10

20

72

TOTAL

50

100

360

Source: Field survey, July 2009.

Table 4.3 above indicates the educational level of employees who responded to the interview and questionnaires.


4.2 METHODS OF APPRAISING EMPLOYEE PERFORMANCE

Table 4.4 Methods of Appraising Employees Performance

METHODS

FREQUENCY

PERCENTAGE (%)

DEGREEO

RATING SCALE

12

24

86.4

DESCRIPTIVE

13

26

93.6

MANAGEMENT BY

OBJECTIVE (MBO)

25

50

180

TOTAL

50

100

360

Source: Field Survey, July 2009.

The table above indicates the methods of appraising employees’ performance. It was found out that the company uses management by objective (MBO) to appraise employees mostly.


4.3 THE INFLUENCE OF APPRAISAL ON PERFORMANCE

Table 4.5 Does appraisal influence performance positively?

RESPONDENTS

FREQUENCY

PERCENTAGE (%)

YES

35

70

NO

15

30

TOTAL

50

100

Source: Field Survey, July 2009.

The table above shows the influence of appraisal system on performance. It was found out that the level at which appraisal influences performance is high.



THE LEVEL OF FAVOURITISM ON APPRAISAL PROCESS

Table 4.6 Is there any favouritism in conducting performance appraisal?

FAVOURITISM LEVEL

FREQUENCY

PERCENTAGE (%)

YES

19

38

NO

31

62

TOTAL

50

100

Source: Field Survey, July 2008

The table 4.6 indicates the level of favouritism in conducting performance appraisal at work place.

4.5 HOW OFTEN PERFORMANCE APPRAISAL IS UNDERTAKEN AT THE WORK PLACE

Table 4.7 How often is employees appraised at the work place?

FREQUENCY OF APPRAISAL

FREQUENCY

PERCENTAGE (%)

ANNUALLY

25

50

SEMI- ANNUALLY

15

30

QUARTERLY

10

20

MONTHLY

0

0

TOTAL

50

100

Source: Field Survey, July 2009

The table 4.7 indicates the frequency or time interval at which performance appraisal is undertaken at work place. It was found out that performance appraisal is mostly undertaken annually and sometimes on quarterly bases but does not take place monthly at all.

4.6 PERFORMANCE APPRAISALS AS ONGOING PROCESS IN THE COMPANY.

Table 4.8 Is performance appraisal an ongoing process in the company?

APPRAISAL AS AN ON

GOING PROCESS

FREQUENCY

PERCENTAGE (%)

YES

36

72

NO

14

28

TOTAL

50

100

Source: Field survey, July 2009.

The table above explains or indicates whether employees’ performance appraisal is an ongoing process in the company. It was found that performance appraisal is an ongoing process in the company.

4.7 FEEDBACK INFORMATION ON PERFORMANCE APPRAISAL

Table 4.9 Is feedback information received after performance appraisal?

FEEDBACK

INFORMATION

FREQUENCY

PERCENTAGE (%)

DEGREE

YES

25

50

180

NO

35

50

180

TOTAL

50

100

360

Source: Field Survey, July 2009.

The table 4.9 explains or indicates whether or not employees or appraisees receive feedback information on their respective performance appraisal. It was found out that 50% receive feedback and the rest 50% does not receive feedback on the appraisal system.


4.8 IDENTIFICATION OF STRENGTHS AND WEAKNESSES ON PERFORMANCE APPRAISAL

Table 4.10 Is performance appraisal helpful in identifying strengths and weaknesses?

IDENTIFICATION

FREQUENCY

PERCENTAGE (%)

DEGREE

STRENGTHS (YES)

35

70

252

WEAKNESSES (NO)

15

30

108

TOTAL

50

100

360

Source: Field Survey. July 2009.

Table 4.10 tries to indicate or identify the weaknesses and strengths in conducting performance appraisal. It was found out that there is much strength in conducting performance appraisal as compared to weakness.


4.9 ASSESMENT OF PERFORMANCE IN RELATION TO APRRAISAL.

Table 4.11 How is performance assessed in relation to appraisal at the work place?

ASSESSMENT LEVEL

FREQUENCY

PERCENTAGE (%)

EXCELLENT

9

18

VERY GOOD

20

40

GOOD

15

30

AVERAGE

6

12

TOTAL

50

100

Source: Field Survey, July 2009

Table 4.11 interpret or identify how employees assess their performance in relation to appraisal. It was realized that most employees’ assess their performance as very good and least assess as average in relation to appraisal.

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.0 INTRODUCTION

This chapter deals with summary of the findings, conclusions drawn on the study and recommendations to the problems of the research topic “the impact of employees’ performance appraisal on productivity”.

5.1 SUMMARY

In the findings of the study, it was realized that more male staff are employed in the organization than the female staff. This is according to the sample size chosen.

It was also found out that performance appraisal influences performance positively. However, the researchers realized that performance appraisal is mostly undertaken on annual basis at the workplace.


5.2 CONCLUSION

It is now appropriate to draw out the main conclusions of the study.

From the study, findings and analysis showed that favouritism has not got much influence in appraising performance.

Again, it was also realized that the company uses rating scale, descriptive system and management by objective system methods of appraisal to evaluate employees. From the analysis, it was realized that management by objective is the mostly used method. Hence, it showed that appraisal is an ongoing process in the company.

Another finding also revealed that 50% of the respondents received feedback information while the rest 50% do not.

Finally, we realized from the research that performance appraisal has got much influence on job performance. In other words, it was realized that appraisal has got a positive influence on performance.

5.3 RECOMMENDATIONS

The following suggestions are made available to appraisers or supervisors by the researchers as per the topic researched;

  • To be able to obtain a reliable appraisal of the employee, supervisors should make it a point of making periodic notes on each of the persons to be appraised. This is because, if one waits till the end of the period to do the appraisal, the tendency will be to forget some rather important positive or negative behaviour the appraisee showed in the course of the period.
  • Performance feedback information should be made available to the employees so as to correct their negative attitudes towards performance.
  • Favouritism at workplace should be reduced to its barest minimum and if possible, it should be made away with completely so as to erase the erroneous impressions and perceptions about performance appraisal.
  • Employees’ performance should be appraised regularly in order to improve productivity. Thus, once a month is just about enough.
  • Bad performing employees should change their attitude towards work after appraisal in order to improve productivity. This can be done by the employee being aware that their performance determines their promotion, incentives, and allowances.

BIBLIOGRAPHY

1. Griffin, W. R. (1999, 6th edn) Management: Houghton Miffling Company.

2. Daft, R. L. and Marcic, D. (1998, 2nd edn) Understanding Management.

3. Nickels, G.W., et al (2005, 7th edn) Understanding Business: McGraw- Hill/ Irwin Inc.

4. Bue W.L. and Byars L.L. (2005, 11th edn) Management: Skills and Application: McGraw-Hill/ Irwin Inc.

5. DEcENZO A.D. and Robbins P.S. (1995) Introduction to Human Resource Management.

6. Azila- Gbettor E.M. (2008) Research Methods for HND Accountancy Students: Dickwin Printing Press, Ho.

7. Hornby A.S. (2006, 7th edn) Oxford Advanced Learner’s Dictionary: Oxford University Press.

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