ABSTRACT
In this work, the researcher is set out to investigate the “Effects of Employee Performance Appraisal in Public Enterprises in Nigeria – A case study of PHCN Abakaliki Business Unit”
The objectives of the study include:
To find out if performance appraisal is in use in public enterprises in Nigeria and the relevance attached to it
To determine the effects of performance evaluation in the public enterprise.
To determine the extent to which performance appraisal can be used to improve employee performance hence productivity.
Finally to make recommendation based on the findings.
Various literatures were reviewed to bring home the focal points of this work. Random Sampling Technique was used in collecting data. The researcher also used Interview and Questionnaire Methods.
The Summary of the major findings include:
| 1. 2. | The Power Holding Company of Nigeria Plc (PHCN) being a Public Enterprise in Nigeria operates an Employee Appraisal System annually. The method of Employee Performance Appraisal in PHCN is the Graph Rating | |
| Scale. This method tries to measure performance using Performance Rating | ||
| and Personal Trait Rating. | ||
| 3. | The most important reasons for Employed Performance Appraisal in PHCN | |
| are: | ||
| To ascertain present/current performance | ||
| To improve on current performance and productivity To set performance objectives | ||
| To assess training needs | ||
| To determine suitability for promotion | ||
| 4. | Recommendation from the Annual Performance Evaluation Reports is the only | |
| basis for drawing the salary structure of her employee and salary increments. | ||
| 5. | A thorough examination of the Performance Evaluation Report Forms for the | |
| different categories of employees in PHCN shows a combination of both | ||
| narrative and rating scales with varying emphasis. | ||
| 6. | Because there is no clear-cut definition of what actually is appraised in an | |
| appraisee, different views were expressed by appraisers. | ||
| 7. | There is openness in the performance appraisal system as practised by PHCN. |
1.1 BACKGROUND OF THE STUDY
The concept of employee Performance Appraisal also referred to as Performance Evaluation dates back to the formation of organization. To manage an organization effectively, there should exist a proper hierarchical structure to clarify organizational lines of responsibility. This structuring is necessary for the purposes of knowing:
a. Where to fit an employee;
b. When his capabilities have out-lived such placements;
c. When to train and develop new skills for other placements and move responsibility;
d. What to pay the employee as salary etc.
What then should be the criteria for determining this structure? Different organizations have different criteria, one of which is the performance of an employee. If the performance of an employee is of such importance, then there must be a method(s) of measuring or evaluating performance. Such method(s) of measuring performance should be scientific and empirical so that attitudes of personalization, favouritism, tradition, tribalism, etc of superior peers and subordinates alike does not influence or affect it.
Performance Appraisal as it relates to the employee and the organization is high of importance because it can have far-reaching effects on the overall productivity of any given Enterprise.
There is really no direct way of measuring productivity using performance appraisal. However, there exist an indirect relationship between the two. The relationship between the two stems from the fact that productivity is determined by the input of each employee in Enterprise among other factors.
According to Torrington (1995:56), he gave performance as one of the reasons why all of us may wish to be appraised To him “Ones ability to do the job may be enhanced by a process which identifies and emphasizes ones strengths and develops an understanding of which changes are needed to overcome any problem(s) so that there is a greater sense of control over what one is doing and confidence in achievement”.
Performance Appraisal identifies the strengths and invariably the weaknesses of the employee in performing his job. The process helps to take care of the shortcomings and build on the strengths hence increase in the ability to perform. This will mean greater and increased productivity on the part of the employee and to the organization in general.
Performance Appraisal if properly carried out as proposed by Power Holding Company of Nigeria Plc will show exactly how an employee is performing on the job i.e. his competence and ability on the job. The employee gives as input his skills, expertise, etc this will definitely determine the output. In other words, the Employee’s Performance Rating is determinant to his productivity; since performance rating is realized through performance appraisal it invariably means that the productivity of that
particular employee and the general productivity of the Enterprise is looked upon from the aspect of group productivity.
Also performance appraisal can be linked to productivity when we look at the motivation the appraisee gets from an outfit that is deregulated. Motivational theorists have made us to believe that an employee must have a reason (motivator) to act or behave in the manner in which he/she does. Powerful motivators like Recognition, Praise, Self-Actualization, are brought to bear on performance appraisals. If the performance rating resulting from the Appraisal is low and affects the general morale of the worker, you do not expect anything good from the worker. This will definitely affect his input and hence productivity.
But if on the other hand, the employee is told he is doing fine and shown the way o improve more, his morale becomes high and he puts in his best in the job, this will show increased productivity. As Torrington et al puts it “reassurance that one is coping and clarification of how one could do better can increase the level of enthusiasm and commitment to the job”. An increased enthusiasm and commitment to the job will definitely result in greater input and this will among other factors affect productivity positively. Also the pay packet of an employee is determined by a proper review and assessment of their performances. The pay packet is supposedly the answer to the basic physiological needs within the hierarchy of needs (Maslow’s Hierarchy of Needs). No employee can be motivated to work efficiently if his performance is not rewarded with high pay.
A performance appraisal in almost all Enterprises is used as an effective tool for salary placement. Here, we can see how performance appraisal is linked to productivity. The employee works, he is appraisal and recommended for high pay. The recommendation is implemented and he is placed on higher pay, he gets motivated to work, his efficiency and input increases, ultimately given rise to increase in productivity.
As earlier stated, performance appraisal reveals the level of performance of an employee. That will show the level of his skills, expertise, know-how, etc. The Enterprise is usually set up with the achievement of certain objective in mind. Every employee’s job is therefore defined to achieve certain set objectives. That means the organization has certain expectations for every employee. If his skills are below the expectations that will give the desired productivity within the Enterprises in terms of quantity, quality, standard, etc the appraisal will be used to recommend such employee for training. It is expected that after the training period, the employee’s skills, know- how, expertise etc will improve and hence meet the required productivity level of that Enterprise as it constitute the employee contribution to the overall productivity of the Enterprise.
From the foregoing it can be seen that an indirect relationship exists between employee performance Appraisal and productivity within an Enterprise. To enable an empirical assessment of the Effects of Performance Appraisal on workers productivity, the Appraisal Process must be looked at, from wider perspective, the view of its effect on the general enterprises objectives and the benefits to be derived by – the organization, the appraiser and the appraisee alike. According to Martin Fisher
(1999:14), he enumerated the following benefits of a successful appraisal/Scheme to the:
a. Enterprise
(i) Improved performance throughout the Enterprise due to more effective communication of the Enterprise’s objectives and value
– Increased sense of cohesiveness and loyalty;
– Improved relationships between managers and staff;
– Managers who are better equipped to use their leadership skill to motivate and develop their staff;
(ii) Improved overview of the tasks performed by each member of staff; (iii) Identification of ideas for improvement;
(iv) Expectations and long-term views can be developed;
(v) Training and development needs identified more clearly;
(vi) A culture of continuous improvement and success can be created and maintained;
(vii) People with potentials can be identified and Career Development Plans formulated to cater for future staff requirements;
(viii) The message is conveyed that people are valued.
b. Appraiser
(i) The Opportunity to develop an overview of individual jobs and complete departments;
(ii) Identification of ideas for improvements; (iii) Increased job satisfaction;
(iv) Increased sense of personal value
(v) The opportunity to link Team and Individual Objectives and targets with department and organizational objectives;
(vi) The opportunity to re-prioritize targets;
(vii) A means of forming a more productive relationship with staff, based on mutual trust and understanding.
c. Appraisee
(i) Increased motivation;
(ii) Increased job satisfaction;
(iii) Increased sense of personal value;
(iv) A clear understanding of what is expected and what needs to be done to meet expectations;
(v) The opportunity to discuss work problems and how they can be overcame;
(vi) The opportunity to discuss aspirations and any guidance, support or training needed to fulfill these aspirations.
(vii) Improved working relationship with the manager.
From the benefits that accrue to the Enterprise, Appraiser and Appraisee enumerated above, performance appraisal viewed widely can be said to be a means of improving the individual Employee and the Enterprise. The Enterprise with set out goals and objectives uses her managers to find out the strengths and weaknesses of her employees, build on the strengths and shape up the weaknesses to produce a better worker so that at the end the goals and objectives of the Enterprise are achieved.
1.2 STATEMENT OF THE PROBLEM
The rise or fall in productivity within an Enterprise depends on the general performance of the employee among other factors. One of the factors that 1elp to improve performance is Performance Appraisal. Through performance Appraisal performance objectives can be set, current performance can be improved, and an assessment of training and development needs made. However, performance appraisal is prone to the following problems:
(a) Its non-existence in some organizations
The researcher is not aware of any research carried out in Nigeria to show the percentage of Enterprises that do not operate Appraisal Schemes. However, the connotation here is that if a developed and advanced country has organizations that do not operate (appraisal) schemes, less should be expected from a developing country like Nigeria.
(b) Bias, reliability and validity of the appraisal system
In most appraisal System, issues such as bias, reliability and validity remain major and persistent problems. Bias in (performance appraisal is a problem as old as the procedure itself. During the third century, the imperial Rater-Emperor Wein Dynasty evaluated the performance of the official family members and was criticized or rating according to his likes and dislikes, not according to MERIT.
The issue of validity has long been of interest to Academic Researchers. There are varieties of theoretical concepts about validity but basically it is concerned with the question of relevance of and the appropriateness influences made on the basis of some set of the measurements. The validity of the inference is likely to vary with the
different uses and purposes of the measurements. However, a valid Appraisal is one, which measures the right criteria to determine performance. If an (appraisal) procedure attempts to cope with a number of different purposes, some in conflict with each other, then practical validity may be difficult to achieve.
(c) The inadequacy of the methods employed
There have been strong arguments against the use of a single method to achieve variety of organizational-centred and individual centred purposes since the techniques; procedures and information required for each are not necessarily the same. However, the quality of appraisal review if not of a high average standard and the time scale often used (one year) may be too long.
More so, much of the current interests have centered on the developmental aspects of performance appraisal with emphasis on counselling the motivation rather than evaluation and judgment. In essence, both those responsible for developing and reviewing organizations appraisal systems and the hapless appraisers have been faced with a bewildering range of criticisms and recommendations upon which to base their decision.
(d) Lack of use of appraisal made
The ‘File Away’ Attitude associated with some Personnel/Administration Department in most Public Enterprises in Nigeria is one of the problems militating against the use of performance appraisals.
(e) The human limitation of the appraiser
Most Appraisal Systems as practiced in Public Enterprises in Nigeria leaves the appraiser wholly to his judgment. This judgment is often times affected by prejudice of tribalism, favouritism; insufficient knowledge of the appraisee, halo effects and the human limitations is not being able to distinguish performance from its context especially where comparisons have to be made to different appraisees working under different circumstances. It is not enough criteria for one to be an appraiser simply because of being superior to an appraisee.
(f) Subjectivity on the part of the Appraiser:
The complex nature of the society has come to bear in the public dealings. As a result, every action of the superior/subordinate is usually viewed with the eyes of ethnicity, sectionalism, religion, etc. Actions are taken therefore to avoid such insinuations. It is as if ‘fear’ is existent in the appraisers when they carry out appraisals.
1.3 PURPOSE/OBJECTIVE OF THE STUDY
In the light of the problems, the followings are the objectives of the study:
1. To find out how performance appraisal has affected developmental programmes within Public Enterprise.
2. To find out if performance appraisal are in use in Public Enterprises in
Nigeria and the relevance they attach to it.
3. To determine the effects of Performance Appraisal on Productivity in Public
Enterprise with particular reference to PHCN Abakaliki Business Unit.
4. To determine the extent to which performance appraisal can be used to improve an Employee’s performance and productivity.
5. To make recommendations based on the findings.
1.4 SIGNIFICANCE OF THE STUDY
The study is designed to aid Public Enterprises in:
Assessing and evaluating the performance of each employee in their organization. Knowing how to use Performance Appraisal Reports to make decisions regarding: (i) Hierarchical placement in the organization;
(ii) Progression and channels of promotion; (iii) Training and retraining of emp1oyees;
(iv) Career planning and development programmes;
(v) Transfers, dismissals, redundancy, retirements, etc.
To aid future researchers and academicians interested in this topic with valuable information.
1.5 RESEARCH QUESTIONS
The following research questions shall guide this study:
(1) How has performance appraisal affected developmental programmes
Within Public Enterprises.
(2) Are performance appraisals in use in Public Enterprises) in Nigeria and how much degree of relevance do they attach to it?
(3) How does performance appraisal affect productivity in Public Enterprises with particular reference to PHCN Abakaliki Business Unit?
(4) To what extent could performance Appraisa1be used to improve an employee performance and productivity?
(5) What has been recommended so far based on the findings?
1.6 LIMITATION AND SCOPE/DELIMITATION OF THE STUDY
The study is confined to National Electric Power Authority (NEPA) now Power
Holding Company of Nigeria Plc (PHCN) Abakaliki Business Unit.
LIMITATIONS:
The followings are the limitations encountered in the course of this study
Time: The greatest limitation the researcher experienced was that of time. To gather materials from various sources was a herculean task, and consequent upon that, the writer was choked.
Resources: The researcher had limited resources in terms of finance, informative materials, etc and that affected to a large extent the quality of the work. The fuel crisis made transportation to and fro PHCN Zonal Headquarters at Enugu where adequate information was obtained virtually thorny.
Finally, lack of cooperation from respondents of PHCN Abakaliki Business Unit was a limiting factor.
1.7 OPERATIONAL DEFINITION F TERMS
The following terms which are defined hereunder, shall hold the meaning indicated throughout this research work:
Appraisee: The person whose performance is being measured and reported upon. Appraiser: The person who is responsible for measuring the reporting employee’s performance and accomplishment.
Employee: A person (worker) that has been employed in the public/private sector and is on a regular payroll of his employer.
Performance Appraisal: The process of measuring the reporting employee behaviours and accomplishment for a given period for the purpose of improving job performance.
Public Enterprise: A public-oriented commercial venture usually owned by government.
Productivity: The skills and talents necessary for the production of goods and services.
This material content is developed to serve as a GUIDE for students to conduct academic research
THE EFFECTS OF EMPLOYEE PERFORMANCE APPRAISAL ON PRODUCTIVITY IN THE PUBLIC ENTERPRISES IN NIGERIA – A CASE STUDY OF PHCN ABAKALIKI BUSINESS UNIT”.
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