1.1 Background to the Study
The best asset in almost all companies is their human resource. These surpass in value and in relevance compared to physical assets i.e., building, land, equipment and vehicles (Anstey et al., 2017). To allow organizations accomplish competitive advantage over rivals around the world, employees play a very crucial function (Oaya et al., (2017). Employees' performance identifies company's success, conducting employee performance appraisal should be done appropriately and regularly in a bid to enhance quality of work, reduce employee dissatisfaction and decline in work performance (Shrestha, S. & Chalidabhongse, J., 2006).
According to Obeidat et al., (2014), performance appraisal plays a role that is important in employee training and development and can be used to determine and initiate the process of providing relevant training and development in their study. Mwema and Gacunga (2014), discovered that performance appraisal allows identification of training needs for personnel and accordingly company is able to provide the needed training therefore helping employees achieve their performance targets.
Performance appraisal is claimed to be the ongoing process of assessing employee performance (Aguinis, 2009). Appraising the performance of individuals, teams and organizations is a typical practice of all societies. In some instances, these appraisals processes are organized and formally approved, in other instances they are an informal and essential part of daily tasks according to Foss, (2007). Traditionally it included documentation and communication of performance between staff members and their supervisors. Currently, the process was formalized and there is some seriousness that accompanies the procedures including record keeping for future purpose (Judy 2015).
According to Ochoti, Maronga & Muathe, et.al (2012) the employee performance appraisal feedback procedure, the correlation between the manager and the managed along with the rating accuracy enhances the employee performance effectiveness. The study recognized that if the implementation process has taken appropriately, it has a reasonably high influence on the employee performance. Begum,et.al (2015) also ensure that employee performance is established by factors like accuracy of the rating, its perceived fairness and the communication between the appraiser and the appraisee.
Employee reactions to appraisal in regards to perceived employee fairness, accuracy, and recognition are essential parts of appraisal efficiency since these perceived employee responses can force employees to improve their performance (Taylor, Tracy, Renard, Harrison and Carroll 2015). That is, performance evaluation serves as a way for providing feedback that can lead to improved performance (Tornow, 2013). Research in performance appraisal has shown that performance appraisal characteristics (such as appraisal purpose and source) can elicit positive employee responses to performance appraisal and, which then, can inspire employees to improve their performance (DeNisi and Pritchard 2016).
In general, we can say performance appraisal is a method of evaluating the actions of employees in the work area, typically consisting of both the quantitative and qualitative aspects of job performance. Performance here describes the level of achievement of the tasks that make up an individual's job. It suggests how well an individual is fulfilling the job demands. Often the term is confused with effort, however performance is always measured in regards to results and not efforts. For that reason, with the help of the performance appraisal one can assess, determine gaps, suggesting improvements and rewarding good behavior in addition to exceptional performance of the other party.
1.2 Statement of the Problem
Global economy has required companies to emphasize on transparency, accountability and efficiency to improve performance (Bouckaert & Halligan, 2006; O'Toole & Meier, 2015). One crucial factor to staff performance is organization objective achievement and for employees to be considered successful, they are required to achieve their performance objectives. (Campbell, 1990). According to Armstrong (2009) managing performance is the means of improving results within an agreed certain period while maintaining the organization standards and competency. McDougall and Levesque (1999) clarified that poor service delivery will lead to loss of confidence by the customers that are not satisfied and they will therefore end up seeking for alternatives. Performance appraisal is prevalent and it is possibly an essential tool for companies to make the most of their employees (Armstrong and Baron, 2005). While performance appraisal is applied to a cross section of employees and in different levels, sometimes they are considered as simply administrative in nature, quite mechanical, ineffective and serve no purpose to improvement of employee performance as reported by (Torrington et al., 2011). Critiques argue that performance appraisal is not a really dependable tool to determine employee and organizational performance. That regardless of, performance appraisal system is thought about efficient enough and seem to be achieving good results for organizations (Dauda & Luki, 2021).
Empirical studies in performance evaluation have revealed that employee performance on organizations can be improved with efficient performance appraisals. On the other hand, empirical study's findings from some scholars have doubted whether performance appraisal brings about employee performance. The differences in literatures on performance appraisal and employee performance therefore create gaps that require further empirical investigation. Thus, the study seeks to examine the relationship between performance appraisal and employee performance in organisations by using GTCO Plc as a case study.
1.3 Objectives of the Study
The main objective of this study is to study the effect of performance appraisal on employees’ performance in organizations using GTCO Plc as a case study. The specific objectives therefore, listed below;
i) To assess the effect of appraisal feedback on employee performance at GTCO Plc
ii) To understand the impact of performance appraisal process on employee performance at GTCO Plc
iii) To examine the influence of performance appraisal goals on employee performance at GTCO Plc.
1.4 Research Questions
In order to address the stated research objectives, the following research questions were developed:
i) What is the effect of appraisal feedback on employee performance at GTCO Plc?
ii) What is the impact of performance appraisal process on employee performance at GTCO Plc?
iii) Do performance appraisal goals have any influence on employee performance at GTCO Plc?
1.5 Research Hypotheses
The following research hypotheses were tested in this study:
i) There is a significant relationship between appraisal feedback and employee performance at GTCO Plc
ii) There is no significant relationship between performance appraisal process and employee performance at GTCO Plc
iii) There is a significant correlation between performance appraisal goals and employee performance at GTCO Plc.
1.6 Significance of the Study
The results obtained from this study will generate insight that can assist programmes in developing effective performance measurement strategies for it will enable the organization to identify and develop guidelines that will enhance effective staff appraisal that will improve staff performance.
To the government the study will help in policy formulation in regardless to performance measurement in public institutions and will provide input when drafting the framework for consolidated regulation on staff appraisal.
The findings will act as a reference point to other researchers in the same field thus facilitating their studies. To academicians and scholars, the study findings will be beneficial to forming the basis for future research on the subject, providing a critical examination of the field. The findings of this study will provide important information to future researchers interested in this area with references and relevant literature to complete their research work.
Furthermore, the study will serve as a spring board to those who want to delve much into human resource planning and development. Finally, this will give fore knowledge to management of other organizations before embarking on human resource planning and development.
1.7 Scope of the Study
The study on the effect of performance appraisal on employees’ performance in organizations used GTCO Plc as a case study. Therefore, the researcher sampled employees in all level of management and non-management staff in three GTCO branches in Abuja in providing needed information.
1.8 Limitations of the Study
The study was concentrated on the effect of performance appraisal on employee performance related to objective setting, interpersonal factor, rater accuracy and recognition thus, this brought questions about other factors that will have an impact in this context. Plus this study was completed based on one organization but different branches which also raise a question of generalization in to other organizations.
In addition, data were collected from individual employees using questionnaires and the main findings was only based on these employees’ perception on the performance appraisal system of the organization. As a result, the generalizability of the findings in to other similar organization was an issue.
1.9 Definition of Terms
Performance Appraisal: is a measurement of work and its results by using the scale and index so that we can measure the desired quantity and quality with precision and free of personal judgments and vague criteria of evaluation. Measurement of an activity is done by activity and comparison of its results with a criterion that we can evaluate the desired quantity and quality precisely. Performance is the way through which employees perform their duties and the evaluation is judging the performance of employees (Scott, 2009).
Employee Performance: is job related activities expected of a worker and how well those activities were executed. Performance criteria are standards for employee behavior at work. These criteria contain much more than how an employee does the work. Employees are rated on how well they do their jobs compared with a set of standards determined by the employer.
Feedback-formal (such as weekly tally sheets of sales) and informal (such as brief discussions between a manager and an employee) ways for a manager to stay in touch with staff members.