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EFFECTS OF APPRAISAL SYSTEM ON EMPLOYEES’ PRODUCTIVITY

CHAPTER ONE

INTRODUCTION

1.1    Background to the Study

One of the most popular tools used in the contemporary productivity enhancement programme is the application of performance appraisal systems. However, since appraising is considered to be a particularly controversial management practice anywhere it is being practiced, its adoption in the manufacturing industry in Nigeria faces numerous challenges and obstacles (Musi, 2015). Appraisal system provides a rational medium or instrument for measuring individual worker contribution to corporate goals achievement and success. It is a complex management function which demand for extra-maturity, fairness and objectivity in assessing individual worker job performance based on explicit job related criteria (Onyije, 2015).

Appraising performance is important because since it helps to ensure that the organization system will be easily understood by employees and effectively put into action by managers. Appraisal structures that are complex or impractical tend to result in confusion, frustration, and nonuse. Likewise, systems that are not specifically relevant to the job may result in wasted time and resources. Indeed, most successful appraisal programs identify and evaluate only the critical behaviors that contribute to job success. Systems that miss those behaviors are often invalid, inaccurate, and result in discrimination based on nonrelated factors (Mwema and Gachunga, 2014).

Performance appraisal system is a critical component of the overall human resource management function in both private and public sectors. The use of performance appraisal systems is generally motivated by the desire to influence employee behaviors, attitudes and subsequently productivity. The quest for methods to motivate employees and thereby improve efficiency in the organisation has for a long time been influenced by persisting fiscal constraints, declining employee productivity and disenchantment with the delivery of public services (Musi, 2015). Performance appraisal should be conducted periodically to evaluate an employee’s performance measured against the job’s stated or presumed requirements. It is important that members of the organization know exactly what is expected of them, and the yardsticks by which their performance and results will be measured. Mullins (2002) substantiated the necessity of an effective appraisal scheme by saying that it can identify an individual’s strengths and weaknesses and indicate how such strengths may best be utilized and weaknesses overcome (Mwema and Gachunga, 2014).

The appraisal system should be formalized especially in supporting decisions on salary and wage increases, transfers, promotions and dismissals, as well as communicating information toappraise through a review of their progress. Results of performance appraisal are used to discuss performance and progress of personnel in relation to goals (Wolf, 2005; Armstrong, 2012). Performance appraisal as an element of performance management is often carried out to reveal individual employee’s contribution to the overall organizational objectives. To drive this notion home Biswajeet (2009) asserted that people do not learn unless they are given feedback on the results of their actions. For corrective actions to take place feedback must be provided regularly and it should register both successes and failures.

1.2    Statement of the Problem

The quest for methods to motivate employees and thereby improve productivity in the organisation has for a long time been influenced by persisting fiscal constraints and declining employee productivity. Salaries and Remuneration Commission of 2014 report shows that the current declining productivity levels experienced in the workplace is as a result of low executive commitment to performance appraisal systems, absence of rigor, objectivity and continuity in the administration of the system, non-linkage of the process to an enforceable reward and sanctions mechanism, non-linkage of the system to staff development, and lack of effective monitoring, annual reporting and feedback mechanisms. The end result of this failure has been the inability of the organisation to measure and evaluate the performance of their workers.

The process of appraising the performance of employees in Nigerian organizations is often vague, the areas of performance for which an individual is responsible are often unclear and evaluations are often not based on actual performance but on the perceptions and judgment of an employee’s immediate boss.  Therefore, an ill-conceived and ill-considered appraisal system could create tensions in the organization. In a sum, there are lots of problems associated with effective performance appraisal which includes untrained supervisors/managers, lack of effective metrics, inconsistent rating of employees, unreliable reward systems. It is on this premises that the study seek to know the effect of performance evaluation system on employee productivity.

Many of the studies on the impact of appraisal system on employee productivity were done outside Nigeria. These studies particularly focus on the public sectors. Research on appraisal system and employees’ productivity are very few. In Nigeria, most of the available studies aboutappraisal system were also theoretical studies whose findings were subjectively based on researchers’ personal opinions. It is noted that the past studies did not give adequate attention to the impact of appraisal system on employees’ productivity, as well as highlighting effectiveappraisal strategy that can stimulate better organization performance. Hence, the undertaking of this research work will fill in the gap by critically exploring the effect of appraisal system on employees’ productivity with a special reference to Cadbury Nig Plc.

1.3    Objectives of the Study

The main objective of the study is to examine the impact of appraisal system on employee productivity. Other specific objectives shall include:

a) To examine the relationship between performance appraisal system and employee performance.

b) To explore the nexus between periodic assessment and employees commitment to work

c) To examine whether performance appraisal reveals employees’ actual strengths and weaknesses in the organization

d) To examine the methods adopted in Cadbury Nig Plc to measure           employee performance.

e) To suggest ways by which appraisal system could be used to enhance            employee productivity.

1.4   Research Questions

The research project beam a searchlight on the following research questions:

1.What is the relationship between performance appraisal system and employee performance?

2.How does periodic assessment affect employee’s commitment to work?

3.Does performance appraisal reveal employees’ actual strengths and weaknesses in the organization?

4.What are the methods adopted in Cadbury Nig Plc to measure employee performance?

1.5    Research Hypotheses

The researcher intends to test the following hypotheses;   

Hypothesis 1:

Ho: There is no significant relationship between appraisal system and employee performance.

H1: There is a significant relationship between appraisal system and employee performance.

Hypothesis 2:

Ho: There is no significant relationship between employee appraisal and managers/employee relation.

H1: There is a significant relationship between employee appraisal and managers/employee relation.

Hypothesis 3:

Ho: There is no significant relationship between employee appraisal and organizational performance.

H1: There is a significant relationship between employee appraisal and organizational performance.

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