Introduction
Chapter 1 highlights performance appraisal as a fundamental strategic human resource management practice that organizations should adopt in their quest to promote their performance. This chapter involves a critical review of past literature on performance appraisal. The significance of this chapter is to identify gaps and areas of improvement with reference to performance management. The chapter is organized in into a number of sections.
Section 1 entails a review on the application of performance appraisal at FERMA in Nigeria. Thus, this subsection identifies the areas in which FERMA has erred in implementing performance appraisal. This goal is achieved by taking into consideration the research objectives. The second subsection entails an evaluation of the critical issues that organizations should take into account in designing an effective performance appraisal system.
The analysis in the two subsections provides insight on the critical issues that FERMA should take into consideration in using performance appraisal system as a tool for promoting organizational and employee development. Therefore, sections will form the basis upon which the study draws recommendations on the critical aspects that FERMA should integrate the necessary corrective measures. Therefore, the review will enhance the contribution of the dissertation to FERMA’s development.
Evaluation of performance appraisal at FERMA
Agbola and Abena(2011, p. 82) affirm that performance appraisal comprises a fundamental strategic technique in an organizations’ quest to maximize the value of their human capital. Despite the efforts by the huge budgetary allocation, Ogunleye (2013, p 12) emphasizes that a significant proportion of roads in Nigeria is in deplorable conditions hence making road transport unsafe and slow. This aspect indicates the existence of inefficiency in the FERMA’s approach in executing its road maintenance and monitoring role.
One of the factors that might have triggered this situation at FERMA is the lack of employee commitment towards the attainment of the overall organizational goals. Therefore, the Agency is not effective in exploiting the employees’ productivity, which highlights the firm’s inefficiency in applying performance appraisal as a tool for promoting employee productivity.
The quality of an organization’s working environment is correlated directly with the level of the employees’ commitment. The performance appraisal programs should be designed in such a way that they address the employees’ individual development needs. This goal can be achieved if an organization integrates the necessary competency development and training initiatives.
Bhattacharyya (2011, p.57) asserts that individual employee development is greatly enhanced by the feedback obtained from the performance appraisal process. On the basis of these views, the lack of employee commitment problem at FERMA is further compounded by the existence of poor working environment. Thus, firm’s performance appraisal program is weak in stimulating the establishment of an environment conducive for working.
Developing employee commitment is an essential human resource management role that managers must ensure. However, the attainment of this goal is influenced by the human resource management practices adopted by an organization. Effective integration of the performance appraisal process constitutes one of the fundamental aspects in promoting employee commitment. The performance appraisal system should be employee centric, which means that it should not only be a checklist on the ‘dos’ and ‘don’ts’.
On the contrary, organizations should be a basis through which an organization undertakes a wider understanding on the employees (Qureshi and Hassan, 2013, p. 60). Thus, the performance appraisal process should enable employees understand the firm’s commitment towards their development. Employees have personal and career development goals when joining an organization and intend the firm to facilitate their attainment (Falcone and Tan, 2013, p. 45).
Nevertheless, the current performance appraisal system at FERMA is ineffective in ensuring that the public servants working within the agency understand and are committed to attainment of the Agencies goals and vision.
The ineffective application of the performance appraisal program at FERMA has made the Agencies’ employees develop the perception that the firm’s performance appraisal program is ineffective in contributing to their personal and career growth objectives. Therefore, understanding the gaps in the current performance appraisal systems is critical in the Agencies’ quest to undertake requisite reforms.
The performance appraisal system should ensure that employees are conversant and committed to enhancing the attainment of the organizations’ goals and mission. Agbola and Abena (2011, p.82) maintain that performance appraisal “is a strategic tool to link employee activities with the organization’s mission and goals by identifying results and behavior needed to achieve the organization’s goals”. Goal alignment is a critical component in promoting organizational performance (Latham, 2013, p. 334).
The likelihood of employees performing at an optimum level is considerably higher if they accept challenging goals as compared to less complex goals (Ayers, 2015, p. 171). Moreover, effective feedback must be established to ensure that the assigned job roles are valuable in contributing to employees’ personal development and career progression (Arthur, 2008, p. 142).
The current performance appraisal system at FERMA fails to successfully enhance goal alignment. Despite the fact that the performance appraisal program is intended at stimulating employee performance, the system is characterized by gaps in promoting the best practices that the employees should observe in enhancing achievement of organizational goals.
On the contrary, the firm has integrated a performance checklist that focuses on different areas. The checklist is comprised of a set of standards that employees are required to observe to achieve exceptional performance. Secondly, the criteria assert that employees must be actively engaged with other staff members in undertaking their duties. The third aspect highlights the importance of being fair, developing a committed workforce and continuously improving its performance.
The concept of fairness should be entrenched by eliminating errors such as rater bias. Integrating this approach is essential in ensuring that the performance appraisal system is effective by identifying the specific areas in which the employees are deficient in their performance.
However, the firm does not observe these issues in the application of performance appraisal system. For example, some employees are highly paid despite the fact that they do not undertake the assigned job roles. This illustrates existence of best practices in the implementation of the performance appraisal system due to failure to integrate performance based pay.
The FERMA has developed a Public Service Charter guides the Agencies operations. Article 21 of the Charter emphasizes that the employees should depict a high level of professionalism in their service to enhance their output.
Despite the formulation and implementation of a comprehensive performance charter in evaluating employee performance, the Agencies appraisal system is weak in that it is not aligned with the employees’ personal and career development goals. Thus, its efficiency in promoting the creation of positive perception amongst the employees is limited.
The effectiveness of the performance appraisal system is further determined by the performance appraisal process. The performance appraisal process should further be comprised of an effective performance feedback process. Furnishing employees with performance feedback improves their understanding on how their activities contribute or fail to enhance the achievement of the organizational goals. Thus, it can contribute to improvement in employee performance.
The feedback mechanism should be based on an extensive discussion with the employees. FERMA has not sufficient appreciated the value of employee feedback in conducting the employee appraisal. To overcome this limitation, it is essential for FERMA to consider undertaking a comprehensive discussion with the employees.
The discussion should be aimed at identifying the employees’ performance problems. This approach enables organizations to be effective in designing employee development programs such as the need-based training (Bhattacharyya, 2011, p. 57). Implementing need-based training based on the performance appraisal results will contribute to renewed knowledge and skills.
Qureshi and Hassan (2013, p. 66) assert that performance appraisal process should contribute to formulation of effective human resource management decisions. Thus, the performance appraisal process should be effectively designed to evaluate ‘within-individual’ and ‘between individual’ performances.
The ‘between individual’ performance evaluation seeks to gather information that would improves decision making on issues such as salary increment, employee demotion, promotion or transfer. The current performance system at FERMA has not factored in the evaluation of ‘between individual’ performance. This situation is well illustrated by the assertion by some of its members at AkwaIbom and Cross River states.
The staff members affirm that they have been receiving salaries without doing any work (Charles, 2015). This aspect illustrates that the company has not tied the employees’ pay to performance, which is a major weakness in the company’s appraisal system. Moreover, the failure to link employee pay to performance indicates existence of a remarkable gap in the organizations performance appraisal system.
Conversely, ‘within-individual’ performance evaluation aids in determining the employees training and development needs (Qureshi and Hassan, 2013, p. 60). FERMA must ensure that the employees perceive the performance appraisal program adopted by a firm to be valuable and, as part of the objective of this dissertation, we will try to establish whether this is the case by critically assessing the employees’ responses to our questionnaire and interviews.
This aspect means that the program should be designed in such a way that it incorporates issues related to the employees personal and career development needs.
The current performance appraisal system at FERMA has not clearly defined the Agencies commitment towards promoting employee development. Subsequently, the agency is experiencing an increase in the rate of employee turnover. The high turnover has arisen from development of a negative employee perception on the chances of attaining personal development and career goals.
In redesigning the performance appraisal system, FERMA must focus on ensuring that the system contributes to evaluation of ‘between individual’ and ‘within individual’ performances.
This approach will improve the capacity with which the firm utilizes the performance appraisal system as an employee personal and career development tool hence promoting their level of commitment to the organization and productivity (Selvarajan and Cloniger2013, p. 3064). Moreover, employing the best management practices will improve the contribution of the performance appraisal system to the firm’s overall performance.
Armed with the above theoretical insight about FERMA’s performance appraisal system, we will, as one of the objectives of this work, use the responses we will get from the employees to critically examine the gaps in the efficacy of the current appraisal program in structure and purpose regarding best practices and the organisational context.
Performance appraisal systems
The process of employee appraisal has become a basis for evaluating the employees’ strengths and weaknesses over the past few decades. Its relevance arises from its contribution to employee and organizational development. The performance results provide managers insight on how to increase productivity (Bhattacharyya, 2011, p. 57).
To succeed in developing an effective performance appraisal system, it is essential for HR managers to integrate the best performance appraisal practices. If the performance appraisal system adopted by an organization does not meet this objective, it is imperative for the management team to undertake an extensive re-look on the appraisal aspects that are defective.
For example, if the appraisal system is linked to rewards and only a small proportion of employees are rewarded, the employees who are not rewarded may be de-motivated (ibid. p. 55). On the contrary, the performance appraisal process should be fair and equitably administered. Moreover, it should illustrate the organization’s commitment in meeting the employee expectations.
The existing performance appraisal system indicates the prevalence of remarkable gaps. Thus, the organization should take into account several issues in designing and using performance appraisal framework. Incorporation of these aspects will contribute to remarkable improvement in the value of the current performance system at FERMA by eliminating the gaps.
Armstrong (2009, p. 67) identifies different issues that organizational managers should consider as a way of becoming effective in performance appraisal. First, the appraisal system should be based on a well-formulated policy. The purpose of the policy is to ensure that the expectations, roles, and competencies necessary for attaining the desired level of performance are stipulated clearly. The policy should not only be used as a benchmark for assessing whether the employees have achieved the desired level of performance.
Conversely, it should be used as a human resource management decision tool. For example, the performance appraisal system should involve a systematic approach to gathering evaluation information regarding job contents (Mello, 2014, p. 525). Consideration of this information will improve the FERMA’s performance appraisal system’s effectiveness in its job redesign process hence improving the value of job to employees’ development.
The appraisal system should be aligned with the stipulated departmental and organizational objectives. The individuals charged with the responsibility of undertaking the performance appraisal should be trained effectively to eliminate the occurrence of negative aspects such as bias. The performance appraisal process should be based on a comprehensive set of standards.
Some scholars criticize the adoption of evaluative performance appraisal arguing that it might lead to the reduction in the employees’ level of commitment and relationship amongst employees. Mello (ibid.) argues that the lack of predetermined performance standards increases the chances of the individuals charged with the responsibility of overseeing the appraisal process making subjective guesses or developing feelings that might have negative impact on the process.
Therefore, FERMA should ensure that appraisal process is accepted by the employees by ensuring that it is not subjective. This aspect will contribute to development of a positive perception regarding the performance appraisal system.
In addition to the above aspects, the process of appraising the employees’ performance should be based on individual targets. The purpose of setting such targets is to ensure that the employees’ evaluation, departmental, and employee goals are aligned with the overall organizational goal.
The organization should further ensure that regular monitoring of the employees’ performance is undertaken (French, 2011, p. 80). This assertion means that performance appraisal should not be confined to an annual formal HR event. On the contrary, the appraisals should be undertaken continuously to identify gaps in the employees’ performance.
This approach increases the likelihood with which an organization integrates prompt corrective actions. In undertaking performance appraisal, organizations should gauge the employee’s actual performance against the set targets. This approach is critical in ensuring that an organization succeeds in evaluating the effectiveness with which employees accomplish the assigned roles (Kirkpatrick, 2006, p. 47).
Moreover, integrating this approach enhances an organization’s efficiency in measuring performance outcomes that are difficult to quantify. Similarly, FERMA will successfully introduce a performance appraisal system that is valuable to employees.
The effectiveness of performance appraisal system is influenced by the extent to which an organization has appreciated communication. The importance of communication arises from the view that it aids in enhancing the value of performance appraisal by sharing information on employee performance. Kirkpatrick (ibid.) asserts that communication makes employees understand the expectations of the appraisal.
Moreover, communicating the purpose of the appraisal makes employees develop a feeling of involvement in the appraisal of their job performance. Armstrong (op. cit., 98) emphasizes that goals and feedback should be incorporated into the appraisal process to achieve the desired accomplishment. Through this approach, FERMA will succeed in improved acceptance of the appraisal system amongst employees at the subordinate and management levels.
The communication process should not only be limited to the purpose of performance appraisal. On the contrary, it should also entail the provision of feedback on the outcome of the appraisal. According to (ibid., p. 101), organizations should ensure that communication on performance appraisal is based on evidence (101).
The process of providing feedback should entail informing employees about the results of the performance appraisal, the critical incidents identified, and significant behaviors. Furthermore, the feedback should involve commending employees for exemplary performance, provide insight on how employees can improve their performance, and inform them of where they have performed dismally (ibid., p. 105). Effective communication will improve the level of employees’ acceptance on the performance appraisal system.
The available literature shows that the data obtained from the performance appraisal can be used in making managerial decisions relating to different such as salary administration, employee promotion, retention, and termination (Lyster and Arthur, 2007, p. 56). In its quest to use performance appraisal as a tool for employee and organizational development, it is imperative for FERMA to ensure that the data is not used negatively.
Agbola and Abena (2011, p. 87) maintain that in spite of the benefits that can be derived from performance appraisal, some managers might use it to victimize employees. For example, some managers might use appraisal ratings to coerce and dismiss some employees such as union members and sympathizers.
Additionally, some managers may use doctored appraisal results to promote certain people, which is against fairness and merit. Therefore, if FERMA intends to use performance appraisal as a tool for organizational and employee development, the firm must use the data fairly and accurately.
Limitations of literature review
The review of literature is limited to two main concepts of performance management, which include performance appraisal and the implementation of a performance appraisal system. However, the review has not evaluated the plan or approach that firms such as FERMA should follow in implementing a performance appraisal system.
Conclusion
Based on this preliminary research, we could understand the Performance Appraisal System at FERMA is ineffective in ensuring that the employees understands the Agency’s goals and vision, hence the need to scrutinise the strengths and weaknesses of the system. This ineffectiveness could also be seen in the slow pace at which projects are executed at the Agency, which is likely caused by lack of motivation of the FERMA employees.
This informs the need to study and analyse the Performance Appraisal system of FERMA in this dissertation in order to recommend the best ways to develop the employees and the Agency as a whole through the use performance appraisal. The Agency must ensure that the employees perceive the performance appraisal to be a valuable one, and it is an objective of this dissertation to assess what their perception of the system is.
We have also established that a Performance Appraisal System must have a goal and some expected outcomes, hence, this dissertation would assess the goals and outcomes of FERMA’s current appraisal program. This will enable us to examine the gaps in the efficacy of the current appraisal program in structure and purpose regarding best practices and the organisational context.
Furthermore, different themes can be identified from the literature review. One of the major themes relates to employee performance. The effectiveness of performance appraisal in promoting employee development depends on whether it forms the basis of managerial decisions on issues such as employee training. Poorly designed appraisal systems might not be valuable in an organization’s quest to enhance the employees’ and organizational performance.
The behavior and attitude of employees in the workplace is subject to their perception of the HR practices adopted by the firm. Subsequently, employees may react differently to the application of performance appraisal system. The organization must ensure that employees understand that the performance appraisal system is intended at enhancing their personal and organizational development rather than to punish them.
Methodology
Research methods and justification
The purpose of this research study is to examine how FERMA can implement performance appraisal as an employee and organisational development tool. The study’s rationale is based on recognition of the value of employees in promoting long-term organisational success. The work intends to achieve this goal by evaluating the strengths and gaps in the company’s current performance appraisal program.
The evaluation will provide insight into the fundamental strategic management issues that the firm should integrate in improving its approach to performance appraisal. The study can be defined as qualitative due to its exploratory nature. Thus, it will lead to the discovery of new ideas and insight regarding the problem under examination (Majumdar, 2011, p. 3).This chapter details the methodological approaches that will be taken into account in conducting the research study.
Research design and justification
To achieve the research objective, the study will be based on a simple descriptive research design. The rationale of the descriptive research design is to develop a comprehensive description on the state of affairs at FERMA. Tappen (2011, p.70) emphasises that ‘simple descriptive design focuses on a single group or population’. The effectiveness of the descriptive research design will be enhanced by incorporating the case study and descriptive survey research approaches.
By integrating the case study research design, it will be possible to undertake a comprehensive understanding of the gaps and strengths in the prevailing performance program at FERMA. The case study research design will ensure that the specific components of the firm’s performance appraisal process are evaluated.
The case study design will further lead to development of extensive understanding on the possible aspects that the Agency should focus in improving the performance appraisal process. Subsequently, integration of the case study design will aid in refining the performance appraisal at FERMA. Thus, the effectiveness of the performance appraisal as a tool of fostering employee and organisational development will be improved remarkably.
Alternatively, the descriptive survey design will improve the ease with which the requisite research data is collected. Hepper et al. (2015, p. 289) stipulate that descriptive survey design contributes to development of self-report on a particular subject.
The application of the descriptive research design will enable the researcher to understand FERMA’s opinions, habits, and attitudes towards the current performance appraisal program. Moreover, Hepper et al. (ibid.) stipulate that ‘survey research involves studying the patterns, causes and effects of issues within a certain population’. Thus, the survey design will increase the chance of identifying facts on the issue being studied.
Target population and sampling
Selection of the research site is essential because it influences the usefulness of the information produced from the study. The study’s target population will be comprised of employees working at different departments in FERMA Nigeria. The choice of employees from different departments as the research respondents will aid in obtaining varied and credible data on FERMA’s performance appraisal process.
The choice of this target population will aid in entrenching the concept of diversity in the construction of the sample study. Thus, the study will successfully identify the perception of different levels of employees on the prevailing performance appraisal system. Therefore, consideration of diversity in selecting the respondents will contribute to effective knowledge creation.
The inclusion of all the Agency’s employees in the study is not feasible because of resource constraints such as time and finances. To overcome the resource constraint challenge, the study will be based on the simple random sampling technique. This technique will aid in constructing the sample study.
Considering that a large workforce facilitates FERMA’s operations, a sample of 20 employees will be selected. Furthermore, the simple random sampling technique will aid in the construction of a representative sample size by eliminating subjectivity. This will improve the effectiveness with which the research findings are generalised to the entire organisation.
Data collection
The research data will be obtained from primary sources. The justification to obtain data from primary sources has arisen from the need to increase the credibility of the research findings. The primary sources will ensure that the research data is collected from the real environment. Therefore, based on the primary data, the reliability of the study’s findings will be improved. However, it will be ensured that the data collected is relevant and realistic.
To ensure that sufficient and reliable data is collected from the primary sources, the study will be based on the data triangulation approach. Crowther and Lancaster (2012) define data triangulation as the process of obtaining data from different sources in conducting a particular research study. The researcher will ensure that the three main dimensions of data triangulation, which include time, person, and space triangulations, are incorporated.
Time triangulation will be achieved by ensuring that the research data is collected at different points in time. Thus, it will be possible to obtain data from the targeted sources by eliminating inconveniences associated lack of limited time. Alternatively, space triangulation will entail collected data from different units at FERMA. This aspect will aid in gaining insight into the overall employee opinion regarding the implemented performance appraisal program at FERMA.
Conversely, person triangulation ensures that the study focuses on different individuals within an organisation. In this case, person triangulation will enable the researcher to gather the opinion of employees at different levels of management within FERMA on the application of performance appraisal.
To enhance the efficiency of the data collection process, the study will employ effective data collection techniques and instruments that include questionnaires and interviews. A comprehensive set of questionnaires will be developed to collect the required data. The questionnaires will specifically be based on the research objectives. In designing the questionnaires, the researcher will incorporate semi-structured questionnaires.
Thus, open and close-ended questionnaires will be developed. The close-ended questionnaires will aid in gathering specific response regarding the research topic.
Conversely, the open-ended questionnaires will aid in understanding different issues regarding the performance appraisal process such as the strengths and weakness of the performance appraisal and the employees’ perception on the prevailing performance appraisal program at FERMA. A comprehensive scrutiny of the questionnaires will be undertaken to eliminate grammatical errors and ambiguity hence improving the rate of response (Remenyi 2012).
To ensure that the data is efficiently collected, the research will integrate the survey monkey as one of the core data collection instrument. The surveymonkey is a software that enables researchers to conduct online survey efficiently and effectively in disciplines such as management and marketing.
The survey software will improve the ease with which research questionnaires are developed and distributed to the respondents. By using the survey monkey as a data collection instrument, it will be possible to distribute the questionnaires through iOS and Android enabled mobile applications. Furthermore, the monkey survey software provides the researcher options on whether to distribute the questionnaire through the web or social media network.
The data collection process will further employ the interviewing technique, which will be operationalised by incorporating the conducting a telephone interview on five officers selected from FERMA’s top management team. The rationale to adopting the interviewing technique is founded on the need to gather relevant research data (Connaway& Powell 2010).
Thus, interviewing the five officers will enable the researcher to gather critical information on performance appraisal at FERMA. Conducting telephone interview and integration of survey monkey will significantly minimise the cost of the study. By incorporating the interviewing technique, the researcher will be in a position to understand the general attitude and perception regarding the prevailing performance appraisal program (Remenyi 2012).
Data analysis and presentation
To improve the value of the data collected, the study will integrate both quantitative and qualitative data analysis techniques. Qualitative data analysis will be achieved by incorporating rating technique. Thus, the Likert scale will be used in evaluating the descriptive data gathered. The Likert scale will aid in analysing the qualitative data collected from the field.
Therefore, a 5-point Likert scale will be developed to gather the respondents’ opinion on the research topic such as the strength of the current performance appraisal system at FERMA. Furthermore, the data collected will be presented using tables, charts, and graphs. This aspect will improve the ease of understanding and interpretation of the data collected by different parties within the firm. Thus, the relevance of the study to the organisation’s management team will be improved.
Ethical considerations
The process of conducting this study involves interaction with human beings during the data collection process. Thus, to guarantee that the data is collected effectively and efficiently, the researcher will ensure that the requisite ethical considerations are taken into account. One of the fundamental ethical considerations involves establishing rapport with the respondents. The credibility of the study’s results will depend on the quality of answers given by the participants.
Before the actual research survey, the researcher will seek permission from FERMA’s management team. This aspect will aid in minimising the perception of the research study being intrusive on the firm’s management practices. Furthermore, seeking permission will increase the ease of credible and relevant data on FERMA’s performance appraisal program. The researcher will ensure that the selected respondents understand that the study is for academic purposes.
To increase the rate of participation in the study, the researcher will assure the respondents of the confidentiality of the information provided through the questionnaire. The participants’ confidentiality is one of the requirements of any research work. In addition to the above aspects, the researcher will ensure that the respondents are respected during the entire data gathering process.
This goal will be achieved by taking into consideration two main dimensions. First, the researcher will ensure that the respondents’ participation in the research study is not achieved through coercion. Secondly, the respondents will be provided the right to pull out of the research study without any consequences.
Limitations
The study is not free from limitations. First, the research study primarily focuses on performance appraisal system and process at FERMA. The study does not emphasise on how the firm can use other HR practices in promoting employee and organisational development. Therefore, the findings of the study are not conclusive on the firm can promote employee development.
Furthermore, the process of undertaking the research study might be hindered by limitations arising from resource constraints, with regard to time and finances. However, this limitation is expected to be resolved using the simple random sampling technique. The simple random sampling technique will aid in minimising the cost of the study. Subsequently, it is assumed that the selected sample is representative hence increasing the ease of generalisation of the research findings.
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