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.
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