IMPACTS OF PERFORMANCE APPRAISAL ON PRODUCTIVITY IN AN ORGANIZATION

(A CASE STUDY OF FIRSTBITE NIGERIA LTD)

ABSTRACT

While the concept of performance appraisal is not new, the study of employee perception of the concept is still going on.  The way employees perceives performances appraisal affects the importance that is attached to it.  Many managers see the performance appraisal process as an administrative rite that consumes a lot of time, while producing little more than frustration, confrontation, and piles of paperwork.

This research work provides an assessment of the impact of performance appraisal on production and productivity taking a case study of First Bite Limited. The purpose of this research work is to help change the perception of employees from seeing performance appraisal as management confrontation activity targeted as generating frustration among employees but to see performance appraisal as tool to be applied for the attainment of organizational goals. Respondents were selected from the staff of Tantalizer outlets of FirstBite Nigeria Limited in the Ikeja environs of Lagos.

TABLE OF CONTENTS

CHAPTER ONE

Introduction

1.0            Background of the Study

1.1     Profile of First Bite Ltd

1.2     Statement of the Problem

1.3     Significance of the Study

1.4     Research Hypothesis

1.5     Research Questions

1.6     Method of Data Collections

1.6.1  Population and Sample Selection

1.6.2  Sample

1.6.3  Data Collection Instrument

1.6.4  Validation of the Instrument

1.6.5  Reliability of the Instrument

1.7     Method of Data Analysis

1.8     Scope and Limitation of the Study

1.9     Brief History of First Bite Nigeria Ltd

References

CHAPTER TWO

Literature Review

2.1     Introduction

2.2     Productivity Principles

2.2.1  Labour productivity and multi-factor productivity

2.2.2  Productivity and National Growth

2.2.3  Sources of productivity growth

2.3     Historical Perspectives of Performance Appraisal

2.3.1  The Need for suitable Performance Appraisal

2.4     Performance Appraisal Framework

2.4.1  Performance Appraisal Methods

2.4.1.1  Absolute Standards

2.4.1.2   Relative Standards

2.4.1.3  Objectives Approach

2.4.2  The 360 Degree feedback Appraisal

2.4.4  The Comparison of Performance Appraisal Methods

2.4.5  Potential Rating Scale Appraisal Errors/Problems

2.5     Determinants of Job Performance

References

CHAPTER THREE

Research Methodology

3.1     Introduction

3.2     Research Design

3.3     Population

3.4     Sampling and sampling technique

3.5     Data Collection Instruments

3.6     Validity of the Instrument

3.7     Reliability of the Instrument

3.8     Hypothesis Testing

3.9     Decision Rule

References

CHAPTER FOUR

Data Interpretation, Analysis and Discussion of Findings

4.1     Introduction

4.2     Presentation and Analysis of Data

4.3     Chi Square Test

CHAPTER FIVE

Summary, Conclusion and Recommendations

5.0     Introduction

5.1     Summary

5.2     Conclusions

5.3     Recommendations

BIBLIOGRAPHY

Appendix 1: Questionnaire    

CHAPTER ONE

INTRODUCTION

1.0    Background of the Study

Production, in economics, is the act supplying a desired output. The act may or may not include factors of production other than labour. Any effort directed toward the realization of a desired product or service is a "productive" effort and the performance of such act is production; Saari, S. (2006).

According to Berglass, Anthony (2008), productivity is a measure of output from a production process, per unit of input. For example, labour productivity may be conceived of as a metric of the technical or engineering efficiency of production. As such, the emphasis is on quantitative metrics of input, and sometime output. Sumanth, D. (1979) maintains that productivity is distinct from metrics of allocative efficiency, which take into account the monetary value (price) of what is produced and the cost of inputs used, ad also distinct from metrics of profitability, which address the difference between the revenues obtained from output and the expense associated with consumption of inputs.

A performance appraisal, otherwise called employee appraisal, performance review, or (career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typical by the corresponding manager or supervisor; Kendirick, J.W. (1984). According to Ayaz Khan (2001), performance appraisal is the periodic evaluation of an employee's performance measured against the job's stated or presumed ' requirements.

Martey, (2002) sees performance appraisal as analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee's performance in a job based on consideration other than productivity alone. A performance appraisal is a part of guiding and managing career development.  It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. The term "performance appraisal" applies to judgment on individual job performance. Individual job performance on the other hand is a multidimensional idea consisting of many facts; which range from an employee's output (job result) to employee mode of accomplishing his or her task (job behavior), and the employee’ attitude towards his or her job (personal traits).

A common approach to assessing performance is use numerical or scalar rating system whereby managers are asked to score an individual against a number of objective/attributes.  In some companies, employees

1.2    Statement of the Problem

While the concept of performance appraisal is not new, the study of employee perception of the concept is still going on. Wallace & Szilagyi (1982).  Mullins (1996) defines perception as "the mental function of giving significance to stimuli. People see things in different ways bringing about different reactions to the same issue. The way employees perceive performance appraisal affects the importance that is attached to it. Freeman, J. (2002) asserted that many managers see the performance appraisal process as an administrative rite that consumes a lot of time, while producing little more than frustration, confrontation, and piles of paperwork.

This reaction is totally understandable if the company is relying on a performance appraisal system that has fallen woefully out of date. Grifell- Tatje, E and Marques - Gou, P. (2008) posited that the performance appraisal process can play a remarkably powerful role in building employees, as well as their performance and productivity - when it's done right.

1.3    Significance of the Study

The Significance of the study is mostly two-prong and they are as follows:

1.       The study will help change the perception of employees from seeing performance appraisal as management confrontation activity targeted as generating frustration among employees.

2.       The study will also help managers to see performance appraisal as a tool to be applied for the attainment of organizational goal instead of managers see the performance appraisal process as' an administrative rite that consumes a lot of time just adding to the work load, producing little or not results but more piles of paperwork.

1.4    Research Questions

The questions that will be asked In the course of this research are the following:

1.       Is performance appraisal seen by staff as a management tool used in favouring a few people on the job?

2.       Is performance appraisal seen by staff as a management tool for improving performance?

3.       Is there significant relationship between training and productivity?

4.       Are employee departments better equipped t organize productivity-oriented performance appraisals than the personnel department?

5.       Do employee departments lack the necessary administrative skills for conducting productivity oriented performance appraisal on their star?

6.       Is there significant relationship between performance appraisal and productivity.

7.       Does appraisal of performance provide opportunity for training?

1.5    Research Hypothesis

The hypothesis that will be tested this study are the following:

Hypothesis 1

Null Hypothesis, H0:  There is no significant relationship between training and productivity.

Alternative Hypothesis, H1:  There is significance relationship between training and productivity.

Hypothesis 2

Null Hypothesis, H0: Employee departments are better equipped to organize productivity-oriented performance appraisals than personnel department.

Alternative Hypotheses, Hi: Employee departments are no better equipped to organize productivity-oriented performance appraisals than personnel department.

Hypothesis 3

Null Hypothesis, H0: Employee departments lack the necessary administrative skills for conducting productivity-oriented performance appraisal on department staff.

Alternative Hypothesis, H1: Employee departments have the necessary administrative skills for conducting productivity-oriented performance appraisal on department staff.

Hypothesis 4

Null Hypothesis, H0: There is no significant relationship between performance appraisal and productivity.

Alternative Hypothesis, H1: There is significant relationship between performance appraisal and productivity.

Hypothesis 5

Null Hypothesis, H0: The appraisal of performance' provides opportunity for training.

Alternative Hypothesis, H1: The appraisal of performance does not provide opportunity for training.

1.6    Method of Data Collection

1.6.1 Research Method

The study followed a quantitative research model using an explorative and descriptive design. The survey method of this study used a non-experimental approach where a group of people are investigated in order to gain insight into the subject of study. The exploratory design allows the use of questionnaire distributed. This will anonymity and solicit more honest responses.

1.6.1 Population and sample Selection

The population for the study comprises all staff of FirstBite Nigeria Limited in Ikeja part Lagos.

1.6.2.2        Sample

The sample was a random selection staff of FirstBite Nigeria Limited and their Tantalizer outlets in Ikeja part of Lagos. The other parts of Lagos were excluded because of practical reasons mainly pertaining to cost constraints for hiring data collectors to reach the other parts.

1.6.3 Data Collection Instrument

A structured self-administered questionnaire was designed for collecting and recording data. The questionnaire consisted of close-ended multiple choice questions as well as five point likert-type questions for data collection.  Response to each item in the questionnaire was indicated by ticking one of the options either in the multi-choice or in the likert-type questions. The five categories in the likert-type questions ranged from strongly disagree, disagree, uncertain, agree to strongly agree. The categories will be coded as 1, 2, 3, 4, and 5 respectively. The questionnaire was administered by the investigator and also retrieved by the investigator. 100 questionnaire were be administered.

1.6.4 Validation of the Instrument

Content Validity of the instrument was ensured by including all the key concepts relevant to the investigation. The questions were formulated according to components of objectives of the study.

1.6.5 Reliability of the Instrument

In ensuring reliability, the questionnaire were structured in a manner that will attract the same responses if administered by another researcher. The questions were formulated to also ensure simplicity, conciseness and to attract lucid responses.

1.7    Method of Data Analysis

The data collected from the survey were analyzed through descriptive statistics of frequency and percentage. Chi-square (X2) was applied to test the hypotheses. The descriptive statistics n the various categories (sections) enable the investigator to stipulate the exact number in the various categories.

1.8    Scope and Limitation of the Study

Owing to the vast size of the banking sector and the boundless nature of the subject of performance appraisal and productivity as a management science, this research would not be exhaustive. The scope of the study would be limited to personnel of First Bite Nigeria Ltd - Tantalizer outlets in Ikeja, Lagos.

Current Research is Limited by the fact that, for competition purposes, it is rather unlikely for companies to provide data on their internal operations. Other limitations include time, logistics and financial constraints.

Caution will be taken during the design of the questionnaire to ensure that the questionnaire items are clear unambiguous and elicit the intended data.  According to Polit and Hunger (1989); Babbie (2005), virtually all research studies contain some flaws.

1.9    Brief History of First Bite Nigeria Ltd

First Bite Limited are the owners of Tantalizer eatery outlets - a leading fast food company established in May 1997 with a promise to deliver full value for money to an increasingly discerning target audience. As one of the foremost fast food companies in Nigeria, Tantalizers has over the years set and maintained high quality and excellent service standards in its line of business.

Tantalizers' journey started on 1st May, 1997 with the opening of its first outlet in Festac town of 21 Road. Tantalizers currently has 39 outlets spread across Lagos, Abuja, Ibadan, Port Harcourt and Abeokuta and Staff strength of about 1, 800 with a high level of customers, employees and all other stake holders”.

The mission statement is "to provide high quality meals at affordable prices in a cheerful environment, while motivating employee to render quality service that will delight customers"

From this imperative, this study will assess the impact of training and development on employee's productivity taking a case study of first Bite Limited.