PERFORMANCE APPRAISAL AND EMPLOYEE PERFORMANCE OF DEPOSIT MONEY BANKS IN RIVERS STATE, NIGERIA

PERFORMANCE APPRAISAL AND EMPLOYEE PERFORMANCE OF DEPOSIT MONEY BANKS IN RIVERS STATE, NIGERIA

Abstract: The study investigated the relationship between performance appraisal and employee performance of deposit money banks in Rivers State, Nigeria. A cross-sectional survey was used in the study. A total population of 382 employees was drawn from 21 deposit money banks in Rivers State, Nigeria. A total sample size of 195 employees was drawn from the population of the study. The systematic sampling technique probability sampling was used in this study. The questionnaire was the main source of data collection and the hypothesis was tested using the spearman rank-order correlation coefficient and partial correlation. The finding of the analysis revealed that the dimensions of performance appraisal (appraisal criteria, appraisal feedback, and appraisal reward) significantly relates to the performance of employees in the deposit money banks in Rivers State. It was also discovered that the work environment had a significant moderating influence on the relationship between performance appraisal and employee performance. Hence, it was concluded that a well-planned and utilized performance appraisal will help boost the performance of employees in the deposit money banks. Thus recommendations are that the management of the banks should ensure that realistic appraisal criteria are set in place and effectively communicated to employees, serving as a motivation to boost their performance.

CHAPTER ONE

INTRODUCTION

• Background of the Study

The high rate of liquidation of numerous firms, coupled with the unending rivalry in the business world has made most organizations shift attention from acquiring sophisticated equipment and give attention to how best to enhance the employees’ performance in organizations. Organization as an open system interacts constantly with the environment (external and internal), and constant adjustment and reinforcement of employee performance are done to meet up with the needs posed by the dynamic environment. The survival and continuity of organizations are determined by their performance. However, the total performance of organizations is an accumulation of individual performance. Thus, organizational focus on boosting employee performance is founded on the knowledge that individual performance is the bedrock that influences the performance of the firm and its sustainability. Pradhan and Jena (2017) asserted that employee performance implies employees’ work achievement after the necessary effort on the job.

An earlier study by Borman and Motowidlo (1997) defined employee performance from the viewpoint of task performance. They maintained that employee performance is the efficiency and effectiveness with which a worker carries out their designation task, that helps in the accomplishment of the firms’ vision while rewarding individual and the organization proportionately. Drawing from the above definition, it is clear that employee performance is an indisputable tool needed by all firms to achieve the strategic vision of the organization. Furthermore, the performance of the employee also affects the organization’s success. The high attention on the issue of employee performance in the banking industry awakened due to the high failure of banks as owing inability to meet with the present turbulent moment. The banking industry in Nigeria has witnessed many reforms and only firms with high competent employees can survive the varieties from the immediate and external environment. The fortunes of organizations lie on employees’ performance because they are seen as the only asset of the organization that harnesses all other resources to attain the organization’s goals. As such, the poor performance of these employees subsequently results in low performance and poor resilience ability of the entire organization. Pradhan and Jena (2017) further pointed out that the performance of the employee as a form of task performance entails job explicit behaviors that comprise basic duties assigned as a part of the job description. Hesketh and Neal (1999) identified employee adaptability is a measure of employee performance. They argued that adaptive employees’ performance is the workers’ capability to acclimatize and provide the necessary support to the job profile in a work situation that is characterized by high dynamism.

Employees in an organization are rational beings, who seem to work more effectively when their work will be appraised and rewarded. As such, many organizations have over time embraced the culture of performance appraisal to establish and subsequently reward the employees’ performance. In accessing employee performance, organizations are concerned with what job is done, how it is done, and what has been achieved. Drawing from the above assertion, employee performance does not wholly focus on what was achieved, but also the behavioral component of how it was achieved. Iqbal, Ijaz, Latif, and Mushtaq (2015) opined that employee performance is the effectiveness of the specific action of an employee that contributes to the attainment of organizational goals. Over the years, employee performance has been measured using various constructs. The most common measures are service quality, timeliness, productivity, employee adaptability, and cost-effectiveness (Cameron, 1986). Performance appraisal helps as a management tool, to assess the performance level of employees. The presence of performance appraisal helps eradicate nonchalant attitude in employee based on their foreknowledge that their remuneration will be determined by the level of their performance. Furthermore, the system of organization performance appraisal motivates the employees to continuously update their skills to remain employable. According to Denisi and Pritchard (2006) cited in Dijk and Schodl (2015), they argued that performance appraisal is the process and methods employed by various organizations in evaluating the employees’ performance level. Such processes mostly involve setting certain criteria for performance, measuring employees’ performance by the set criteria, and giving the employees feedback based on their performance level, and quality. Most times, after an appraisal is done, employees with high performance are normally rewarded either financially or otherwise, while those with low performance remain unrewarded or even fired. Thus, an appraisal of each worker’s performance may to a large extent inspire the workers to put in their best. The various dimensions of performance appraisal are; appraisal criterion, appraisal feedback, appraisal reward, and appraisal frequency.

Furthermore, numerous researches have investigated how the performance of the employee can be improved using different constructs. Salah (2016) examined how rewards influence employee performance. He observed that the relationship between the employee’s performance and rewards was significant. Some other studies aligned with that of Salah (2016) which found that rewards in organization positively influence employee performance (Gohari, Kamkar, Hosseinipour & Zohoori, 2013; Ibrar & Khan, 2015; Chijioke & Chinedu, 2015). Job characteristics have also been found to significantly predict employee performance (Evelyne, Kilika & Muathe, 2018). Furthermore, some other studies have previously examined how performance appraisal relates to the performance of employees. (Iqbal, Ahmad, Haider, Batool & Qurat-ul-ain, 2013; Shaharyar, Baloch, Tariq, Mushtaq & Mushtaq, 2014; Wanjala & Kimutai, 2015; Ademola, 2017). However, dearth exists in an empirical study that has focused on the relationship between the performance of the employee and performance appraisal within the banking sector of Nigeria. It is this observed lacuna in the file of management that has informed this study. This work differs from previous work because it pursues to resolve the problem of employee performance from a performance appraisal point-of-view.

• Statement of the Problem

In organizations, the problem of poor employee performance has manifested in various ways which has over time weakened the competitive stand of many organizations. The banking industry over the years has witnessed radical change which has resulted in mergers, acquisitions, and liquidation of many firms. Adesola (2017) observed that many management and customers are dissatisfied with the attitude and performance level of most employees. He argued that despite the several training organized by the organization, there seems to be no improvement in employees’ performance. This poor level of performance had resulted in a loss of customers and loyalty. It is worthy to note that when this problem of poor employee performance persists, the organization’s performance will fall and may subsequently lead to liquidation. Furthermore, the high retrenchment in the banking sector is becoming alarming and such an act of retrenchment has worsened the rate of unemployment and poverty in the Nigerian economy. The absence of performance appraisal will encourage a nonchalant attitude and poor performance in the organization. In this modern age, customers are in search of quality and timely services. The issue of employee performance has drawn the attention of most researchers because the problem has resulted in a high level of dissatisfaction and has affected the firm’s financial position. Many customers withdraw their patronage and loyalty from an organization when they observe the poor performance of employees in terms of productivity, timeliness in service delivery, and quality of service. Notwithstanding, a lot of scholars have investigated ways to improve employee performance, but the problem of poor performance persists. The wake of the failure of many banks had quickened the curiosity of many researchers to examine how to eradicate the problem of low employee performance. Therefore, this study strives to examine how performance appraisal relates to employee performance in deposit money banks located in Rivers State, Nigeria.

• Conceptual Framework

The conceptual framework below displays the relationship between the predictor, criterion, and moderating variable.

Figure 1.1:    A conceptual framework showing the relationship between performance appraisal and employee performance within the moderating influence of the work environment

This Conceptual framework covers the predictor variable (performance appraisal) and its dimensions are appraisal criteria, appraisal feedback, and appraisal reward. The criterion variable (employee performance) is measured in service quality and task accomplishment. The work environment served as the moderating variable for the study. The study seeks to determine how performance appraisal relates to the performance of employees under the moderating influence of the work environment.

• Aim and Objectives of the Study

The work was aimed at determining the relationship between performance appraisal and employee performance in deposit money banks in Rivers State, Nigeria. Specifically, the objectives are to;

1. Determine the relationship between appraisal criteria and service quality of deposit money banks in Rivers State, Nigeria.
2. Evaluate the effect of appraisal criteria on task accomplishment of deposit money banks in Rivers State, Nigeria.
3. Evaluate the relationship between appraisal feedback and service quality of deposit money banks in Rivers State, Nigeria.
4. Ascertain the relationship between appraisal feedback and task accomplishment of deposit money banks in Rivers State, Nigeria.
5. Determine the impact of appraisal reward on service quality of deposit money banks in Rivers State, Nigeria.
6. Examine the relationship between appraisal reward and task accomplishment of deposit money banks in Rivers State, Nigeria.
7. Evaluate how the work environment moderates the relationship between performance appraisal and employee performance of deposit money banks in Rivers State, Nigeria.

• Research Questions                                                                       

In order to enable us to achieve the research objectives, the following research questions were formulated.

1. What relationship exists between appraisal criteria and service quality of deposit money banks in Rivers State, Nigeria?
2. What is the effect of appraisal criteria on task accomplishment of deposit money banks in Rivers State, Nigeria?
3. Determine the relationship that exists between appraisal feedback and service quality of deposit money banks in Rivers State, Nigeria?
4. Ascertain the kind of relationship exists between appraisal feedback and task accomplishment of deposit money banks in Rivers State, Nigeria?
5. What is the relationship between appraisal reward and the quality of service of deposit money banks in Rivers State, Nigeria?
6. What is the relationship between appraisal reward and task accomplishment of deposit money banks in Rivers State, Nigeria?
7. How does the work environment affect the relationship between performance appraisal and employee performance of deposit money banks in Rivers State, Nigeria?

•    Research Hypotheses

The null hypotheses formulated in this study are;

Ho₁:    There is no significant relationship between appraisal criteria and quality of service of deposit money banks in Rivers State, Nigeria.

Ho₂:    No significant relationship exists between appraisal criteria and task accomplishment of deposit money banks in Rivers State, Nigeria.

Ho₃:    There is no significant relationship between appraisal feedback and service quality of deposit money banks in Rivers State, Nigeria.

Ho₄:    No significant relationship exists between appraisal feedback and task accomplishment of deposit money banks in Rivers State, Nigeria.

Ho₅:    There is no significant relationship between appraisal reward and service quality of deposit money banks in Rivers State, Nigeria.

Ho₆:    There is no significant relationship between appraisal reward and task accomplishment of deposit money banks in Rivers State, Nigeria.

Ho₇:    Work environment does not significantly affect the relationship between performance appraisal and employee performance of deposit money banks in Rivers State, Nigeria.

• Significance of the Study

The findings of this study would be very beneficial to the practitioners, deposit money banks, scholars, and would contribute to future research. Theoretically, this study will help reveal how appraisal influences the performance of employees in Nigerian banks. Again this study will proffer recommendations on how employees’ performance can be enhanced. Practically, this study will help enhance the bulk of knowledge on the subject matter. It will further serve as a point of reference to future researchers and scholars that will be willing to carry out further study on areas relating to the studied variables.

• Scope of the Study

The scope can be categorized into the content scope, geographical scope, and unit of analysis.

Content Scope

This comprises the predictor variable (performance appraisal), criterion variable (employee performance), and the moderating variable (work environment)

Geographical Scope

This scope covers a sample of commercial banks in Port Harcourt.

Unit of Analysis

This research will be carried out under the micro (individual) level of analysis.

• Definition of Terms

Appraisal criteria: This is the set standard that the organization expects the employee to attain over a period of time.

Appraisal feedback: This is the level to which a worker receives express information from the organization concerning his/her work

Appraisal Reward: this is the incentive or a motivational factor given to employees for their ability to meet up with the performance criteria.

Employee Performance: This encompasses the quantity and quality of output, accommodative, work attendance, timeliness of output, and helpful nature of an employee.

Service Quality: Zeithaml and Bitner (2003.85) defined Service quality as a focused evaluation reflecting how customers perceive the following dimensions of service, viz; responsiveness, reliability, empathy, assurance, and tangibles.

Task Accomplishment: this has to do with how well important tasks are done.

Performance Appraisal: This is the methodical review of an individual worker’s performance on the job which is used to evaluate the effectiveness of his or her work.

Work environment: work environment attracts people to the organization, spurs them to remain with the company, and performs well.

• Organization of the study

This study covers five chapters. The first chapter deals with the introduction which comprises the study background, statement of the problem, operational framework aims, and objective, questions to guide the research, hypothesis, significance, and definition of terms. Chapter Two deals with an extensive review of extant literature related to the topic. The third chapter presents details of the methodology that was employed in the work. Chapter four will deal with data presentation, data analysis, and discussion of findings. Chapter five covers the work’s summary, conclusion, recommendation, and an enumeration of its contribution to knowledge.