CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

Performance appraisal is one of the most important techniques used by most organization to determine organizational performance. Performance appraisal is a review and discussion of an employee performance of assigned duties and responsibilities globally. It is based on results obtained by the employee in his or her job, not on the employee personality characteristics.

Performance appraisal is an important tool for human resource management. It is a means not only for evaluating performance but also for achieving performance improvement among staff of an organization. As an administrative activity which improves the chances of attaining organizational goals, performance appraisal makes it mandatory for members of an organization to know what is expected of them, and the indicators by which their productivity will be measured in order to ensure organizational growth, staff progress, and goal attainment.

Performance appraisal is a systematic evaluation of the performance of an employee on his present job and also in relation to future jobs that he may be required to take up (Hartzell, 2006). It measures and evaluates the results of the performance of workers pointing out their potentialities and deficiencies so that they can improve over time. A good appraisal system is so fundamental to the management of people in any organization.

The success of the organization itself depends largely on a good appraisal system. With a good appraisal system those who contribute more will be adequately rewarded and the right type of people are likely to be promoted into positions of higher responsibilities (Stonner, Freeman & Gilbert, 2005). Thus, for any evaluation system to work well, the employees must understand it, must feel it as fair, and must be work oriented enough to care about the results (Habibu, 1992). One way to foster this understanding is for the employees to participate in the system design and be trained to some extent in performance appraisal. Therefore performance appraisal is important to manage employee’s work effectively. (Armstrong, 2001) tells performance as behavior – the way in which organization’s teams and individuals get work done.(Mooney, 2009) suggested that performance is not only related to results but it also relates with activities and behaviors of employeesthat they adopted to achieve their given goals. (Dessler, 2005) define performance appraisal as “comparing the employee’s present and past performance to his/her performance standards”. (Grubb,2007) says performance appraisalis a procedure to evaluate how individual personnel are performing and how they can improve their performance and contribute to overall organizational performance. (Beach, 2001) Performance appraisal is the systematic evacuation of employees according to their job and potential development. (Pınar Güngör, 2011) says “Motivation is the ability of person to modify his/her behavior”. Motivation is a driven force that leads and directed a person toward some specific goals.

The underlying objective of performance appraisal in any organization is to improve the productivity of workers. Thus, performance appraisal provides adequate feedback on how staffs are performing, by exposing them to knowledge and the result of their work; clear and attainable goals of the organization; avenues for involvement in the setting of tasks and goals (Mullins, 1999). These activities lead to improvement in the performance of personnel, and higher productivity in the organization.

1. STATEMENT OF THE PROBLEM

Performance appraisal provides a good opportunity to formally recognize employee achievements and contributions to the organization, and to ensure that a clear link is established and maintained between productivity and reward. It is necessary in an organization because it helps in clarifying goals and expectations, and also creates an environment for open communication. It brings about positive feedback and advice for improving employee productivity.

          However, it has been observed that performance appraisal system in firms in Anambra State are suffering some defects such as Lack of employee participation in organizational goals setting that clarify organizational goals and expectations, and lack of feedback of performance appraisal result to employee. The study therefore, investigated performance appraisal and employee performance of selected firm in Anambra State.

1.3 AIM AND OBJECTIVES OF THE STUDY

The main aim of the research work is to determine the correlation between performance appraisal and employee performance of selected firm in Anambra State. The objectives of the study are:

1. to determine the effect performance appraisal on employee performance
2. to determine the types of performance appraisal techniques used by firms in Anambra state
3. to determine the extent to which performance appraisal affects employee performance in Anambra state
4. to investigate the factors affecting performance appraisal and employee performance in firms in Anambra state 

1.4 RESEARCH QUESTIONS

The study came up with research questions so as to ascertain the above stated objectives of the study. The research questions for the study are:

1. What is the effect performance appraisal on employee performance?
2. What are the types of performance appraisal techniques used by firms in Anambra state?
3. To what extent do performance appraisal affects employee performance in Anambra state?
4. What are the factors affecting performance appraisal and employee performance in firms in Anambra state?

1.5 STATEMENT OF THE HYPOTHESIS

 Ho: effective performance appraisal does not influence employee performance.

Hi: effective performance appraisal influences employee performance

1.6 SIGNIFICANCE OF THE STUDY

The study on performance appraisal and employee performance will be of immense benefit to firms in Anambra state. The study will examine the types of performance appraisal techniques used by firms in Anambra state. It will help organizations and business owners how to the best measure to access performance appraisal of employees and how to improve employees performance. The study will serve as a repository of information to other researchers that desire to carry out similar research on the above topic. Finally the study will contribute to the body of the existing literature on performance appraisal and employee performance.

1.7 SCOPE OF THE STUDY

 The study will cover on performance appraisal and employee performance with focus of three firms (First bank Nigeria plc, Guarantee trust bank of Nigeria and access bank). The study will also cover on the measure to access performance appraisal of employees and how to improve employees’ performance

1.8 LIMITATION OF THE STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work

1.9 DEFINITION OF TERMS

Appraisal: a formal assessment, typically in an interview, of the performance of an employee over a particular period.

Employee performance: Employee performance refers to how your workers behave in the workplace and how well they perform the job duties you've obligated to them.