PERFORMANCE APPRAISAL AS A TOOL FOR ENHANCING ORGANIZATIONAL

PRODUCTIVITY
(Case study of FEMTECH I.T and AFATECH I.T)

BY:

XXXXXXXXXXXXXX

MATRIC NO:

XXXXXXXXXXX

DATE: APRIL, 2021

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 CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Prior to the global changes occurring in the business world today, managers and
management of various organization either public or private are finding every possible
means of having a competitive edge above their respective competitors. This trend has
accelerated due to environmental forces such as globalization, advances and innovation in
technology and changes in the market conditions. The changes in the business
environment require firms to show greater concern in developing human competence and
have a competitive advantage over their competitors (Wanjala & Kimutai, 2015). As
regard becoming the most competitive organization in their industry, there is need for the
human resource department to take into cognizance the effect of the employee towards
the general goals and objectives of the organization. In relation to the importance of
employee’s performance towards the general goals and objective of the organization,
there is need for mangers to understand the fact that there are some measures that needs
to be put into place that would encourage and also bring out the best performance from
each employees of the organization.
In an effort of bringing out the best performance and optimum utilization of
employee, has led to the implementation of employee’s performance appraisal
techniques. Adeola & Imade (2017), performance appraisal acts an important factor in the
overall functions of human resource management in both private and public sectors.
Performance appraisal has great implications on employee motivation. For instance,
staffs are unlikely to want to be open about job difficulties, or to admit that they need
more training to do the job, if they feel this will directly affect their next pay increase. In
an organizational setting, performance appraisal is defined as a structured formal
interaction between a subordinate and a superior, that usually takes the form of a periodic
interview which could either be annual or semi-annual, in which the work performance of
the subordinate is examined and discussed with the view to identifying strength and

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weaknesses as well as opportunities for improvement and skill development (Emmanuel,
Richardson & Smith, 2019).
Performance appraisals have far reaching consequences on people. If evaluators in
any way discriminate against employees, these individuals can suffer devastating and
potentially debilitating consequences. Given the possibility that adverse judgments can be
made about an individual’s performance, it is possible that performance appraisals might
not be fair. Evaluators might allow their biases, prejudices and stereotypical attitudes to
negatively influence the outcome. In the early part of this century, performance appraisals
were used in larger organizations mostly for administrative purposes, such as making
promotions and determining salaries and bonuses. However, companies and researchers
have increasingly stressed the use of employee evaluations for motivational and
organizational planning purposes. Indeed, for many companies, performance appraisal
has become an important tool for maximizing the effectiveness of all aspects of the
organization, from staffing and development to production and customer service.
Performance appraisal should be conducted periodically to evaluate an employee’s
performance measured against the job’s stated or presumed requirements. It is important
that members of the organization know exactly what is expected of them, and the
yardsticks by which their performance and results will be measured. Wood & Clark
(2018), substantiated the necessity of an effective appraisal scheme by saying that it can
identify an individual’s strengths and weaknesses and indicate how such strengths may
best be utilized and weaknesses overcome.
The appraisal system should be formalized especially in supporting decisions on
salary and wage increases, transfers, promotions and dismissals, as well as
communicating information to appraise through a review of their progress. Results of
performance appraisal are used to discuss performance and progress of personnel in
relation to goals. Performance strengths are recognized and weaknesses identified so that
individual action plans can be developed to make the necessary corrections. The
performance appraisal method applied should be valid. There must be a clear link
between the performance standard for a particular job and an organization’s goals and

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this should be measured accurately by the method. Appraisers should be thoroughly
trained in purpose and utilization of the performance appraisal system (Wolf, 2016). The
performance appraisal method applied must be sensitive in distinguishing effective
performers from ineffective performers/ the performance appraisal method should be
reliable in that different raters using the same method will rate the same employee
similarly. The performance appraisal method should be easily understood by both raters
and the employees.

1.2 STATEMENT OF PROBLEM

Most organizations in this competitive market fail to achieve their targets successfully
because employees perform below standard, and this is due to the inability of the working
environment to encourage them to work harder. If management does not invest much into
the welfare of their workers, problems are bound to arise that may lead to industrial
labour turnover, low commitment to work, low morale, poor job satisfaction that may
also lead into low productivity of goods and services. For this reason, most organizations
established attractive performance appraisal systems to help motivate their employees to
strive hard towards the desired performance that will be reflected on their productivity.

1.3 RESEARCH QUESTIONS

The following research questions guide the study and some of which are:
i How has Graphic Rating Style Appraisal affected the Market Share of the
organization?
ii How can Graphic Rating Style Appraisal develop the efficiency of Organization?
iii What impact has Forced Choice Method have on the Market Share on Organization?
iv To what extent does Forced Choice Method affects the efficiency of Organization?

1.4 RESEARCH OBJECTIVES

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The aim of this research is to investigate the impact of performance appraisal as a tool
for enhancing Organizational productivity, while other objectives are to;

i explore the impact of Graphic Rating Style Appraisal on the Market Share of
Organization
ii determines the extent at which Graphic Rating Style Appraisal affect the efficiency
of Organization
iii examine the extent at which Forced Choice Method affect the Market Share of
Organization
iv identify how Forced Choice Method affects the efficiency of Organization

1.5 RESEARCH HYPOTHESES

The following research hypotheses are formulated for the study.
H01: Graphic Rating Style Appraisal does not affect significant of Market Share of
Organization.
H02: There is no significant effect of Graphic Rating Style Appraisal on the efficiency
Organization.
H03: Forced Choice Method does not affect the Market Share of Organization.
H04: Forced Choice Method does not affect the efficiency Organization.

1.6 SIGNIFICANCE OF THE STUDY

The study provides suitable suggestions to the impact of performance appraisal as
a tool for enhancing organizational productivity. The study is hoped would provide
valuable information to the management that would assist in ensuring that performance
appraisal system is appropriately administered and appreciated. The management would
also be able to formulate policies that help enhance employee productivity in the
organization.
The findings and recommendation of the study would enable the formulation of
effective performance appraisal strategies for enhancing employee productivity without

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much resentment. The study would shed more light on the issues of performance
appraisal that enhance organizational productivity. It would also enable the researcher to
identify the gaps that still need to be addressed. The study would also provide added
literature for knowledge advancement and scholarly discourse.

1.7 LIMITATIONS OF THE STUDY

This study is limited to the issue of performance appraisal on organizational
productivity. The reason for this restriction is due to the limitation time and
unavailability of resources.

1.8 SCOPE OF THE STUDY

This research work focuses on (Femtech I.T and Afatech I.T). This research proposal
decides to make them a case study because of the easy access of data and they are as
well known to the general public, this research work will be covering from the last four
years i.e. 2018-2021 of this organization for proper planning.

1.9 OPERATIONALIZATION
In operationalization, both constructs need to be clearly understood and properly
identified in a given research topic in line with the variables. The center of
operationalization can be measured by identified constructs as variables are too large to
be measured. The constructs could either be dependent or independent. This research is
operationalized thus: Performance Appraisal as a Tool For Enhancing Organizational
Productivity (a case study of FEMTECH I.T and AFATECH I.T)

The two construct include:

i Performance Appraisal
ii Organizational Productivity

Y=f (X)

Where X = Independent Construct (Variable)

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 Where Y = Dependent Construct (Variable)

Where:

X (Independent Variable) Y (Dependent Variable)

Performance Appraisal Organizational Productivity

: Forced Choice Method
x1 y1 : Market Share
: Essay Method
x2 y2: Efficiency
: Graphic Rating Style
x3 y3: Service Quality
: Management by Objective
x4 y4: Effectiveness

Selected Variables
Performance Appraisal Organizational Productivity
: Forced Choice Method
x1 y1 : Market Share
: Essay Method
x2 y2: Efficiency

1.10 DEFINITION OF TERMS

Performance Appraisal:
Performance appraisal as a completely integrated system involving periodic planned
discussions between the manager and employees, to identify and compare employees
total performance against predetermined goals, (the manager acting as coach and
counselor of the staff in areas requiring correctives actions), for the improvement of
overall performance for the benefit of both employees and the total organization.

Graphic rating scale (GRS)

This presents appraisers with a list of dimensions, which are aspects of performance that
determine an employee's Market Share.

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Essay-Method

Essay method requires the appraiser to compose a statement that best describes the
employee being appraised.

Forced Choice Method

This method requires the rater to choose from statements, often in pairs, that appear
equally favorable or equally unfavorable

Behaviorally Anchored Rating Scales (BARS):

This is a relatively new technique, which combines the graphic rating scale and critical
incidents method.

Market Share:
Market Share is the capability of producing a desired result or the ability to produce
desired output. When something is deemed effective, it means it has an intended or
expected outcome, or produces a deep, vivid impression.

360 DEGREE:
The Graphic Rating Style feedback is an assessment system where management teams
solicit information about their employees from workplace sources about employee
behavior and performance.

Management By Objective
Management by Objective (MBO) is a management system designed to achieve
organizational Market Share by steering each employee's behavior toward the
organization's mission. MBO is often used in place of traditional performance appraisals.

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Efficiency:
This is the ratio of the useful work performed by a machine or in a process to the total
energy expended or heat taken in.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter examines previous literature related to the relationship between

performance appraisal Organizational productivity of Femtech I.T and Afatech I.T. It
reviews the past studies that help the researcher to understand and identify the problem
being studied more appropriately. This chapter also explains empirical review i.e. past
research on performance appraisal, theories and gaps in literature.

2.1 Conceptual Clarification

2.1.1 Performance Appraisal

A performance appraisal is a regular review of

an employee's job performance and overall contribution to a company. Also known as an
annual review, performance review or evaluation, or employee appraisal, a performance
appraisal evaluates an employee's skills, achievements, and growth. Performance
appraisal is the systematic evaluation of employees with respect to their performance on
their job and their potential for development. Mohsin, Mehreen & Saneea (2013), sees
performance appraisal as a structured and formal interaction between a subordinate and
supervisor, that usually takes the form of a periodic interview in which the job
performance of the subordinate is examined and discussed. This is done with the view of
identifying weaknesses and strengths, opportunities for upgrading and skills
development. According to Pardue, (2011), a good performance appraisal method is

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estimated to have some basic elements in order to accomplish the organizational and
person aspiration.
A performance appraisal is an evaluation done on an employee’s job performance
over a specific period of time. The works performed by the different employees differ in
many aspects due to the difference in their backgrounds, experiences, knowledge, skills,
abilities, and aptitudes. Such differences determine the need for training and
development activities.

It is the equivalent of a report card on an employee and how their manager assessed their
performance over the prior year. So, it is necessary for management to identify such
differences so that employees having better job performance ability, skills and
knowledge can be rewarded in one hand, and the wrong placements of the employees
may be checked through transfer or punishments on other hands. In this regard,
performance appraisal provides a measure in order to know the level of performance so
that the employee may improve his/her performance.

2.1.2 PERFORMANCE APPRAISAL TECHNIQUES

2.1.2.1 GRAPHIC RATING SCALE

In graphic rating scale method each trait or characteristic to be rated is represented by a

scale on which a rater indicates the degree to which an employee possesses that trait or
characteristic. In graphic rating scale method subjectivity bias is reduced somewhat the
dimension on the scale and scale points are defined as precisely as possible.

2.1.2.3 ESSAY-METHOD

In essay method, Bohlander and Snell indicated that unlike rating scale, which provides
a structure form of appraisal, the essay method requires the appraiser to compose a
statement that best describes the employee being appraised. In this method, the appraiser
describes the employee's strengths and weaknesses and makes recommendations for his
or her development, (De Cenzo and Robbins, 1996). The method also provides an
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excellent opportunity to print out the unique characteristics of the employee being
appraised. This method however, has some limitations such as time consuming task,
also the quality of the performance appraisal may be influenced by that supervisor’s
writing skills and composition style. Dessler (2016), on the other pointed out that essay
method aids the employee in understanding where his or her performance was good or
bad and how to improve that performance.

2.1.2.3 FORCED - CHOICE METHOD

This method requires the rater to choose from statements, often in pairs, that appear
equally favourable or equally unfavourable. The purpose of the statement is to
distinguish between successful and unsuccessful performance. The forced - choice
method is not without limitations of which the primary one being the cost of establishing
and maintaining its validity.

2.1.2.4 360-DEGREE APPRAISAL AND CORPORATE PERFORMANCE

The 360-degree feedback is an assessment system where management teams solicit

information about their employees from workplace sources about employee behavior
and performance. The feedback often includes response from subordinates, peers, and
supervisors. It also includes self-evaluation by the employees. Lately, the appraisal
method has been mostly utilized for developmental purposes, giving employees an
opportunity to develop work skills and behaviors and also for performance evaluations
and employment decisions including promotion (Espinilla, de Andrés, Martinez &
Martinez, 2013). The appraisal method gives employees the opportunity to receive
performance feedback from his or her supervisors and peers. The evaluation method
incorporates response from all who observe and are affected by the fulfillment of a
candidate. The feedback system can automatically generate tabulated results and present
them in a format that allows managers to create a development plan.

2.1.3 STEPS IN POTENTIAL APPRAISAL:

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Potential Appraisal proceeds in the same way as the performance appraisal with some
adjustments.

2.1.3.1 STEP 1
The first step involved in potential appraisal is the determination of role dimensions for
which an employee’s potential is to be appraised. The role dimensions can be identified
by job description and specification, which provide information about the responsibilities
involved in a job and attributes required in the jobholder. Usually large organizations
prepare directory for job descriptions and man specifications. If the directory is updated
regularly, it can be a good source for determining role dimensions.
2.1.3.2 STEP 2
After the determination of various attributes required for the effective job performance,
the mechanism’ for appraising these attributes in an employee should be determined. The
mechanism involved should include the methods through which potential is to be
appraised and the person who will appraise.
2.1.3.3 STEP 3
At this stage, the potential of the employee can be appraised in the light of various
attributes identified as above.
2.1.3.4 STEP 4
Potential appraisal should be linked with other human resource management elements
such as providing feedback and counseling, training and development, promotion, job
rotation, etc., to make the appraisal meaningful.

2.1.5 OBJECTIVES OF PERFORMANCE APPRAISAL:

Hasan & Hassan (2017) through their studies was able to come up with some objectives
of performance appraisal in an organization
 To review the performance of the employees over a given period of time.
 To judge the gap between the actual and the desired performance.

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  To help the management in exercising organizational control.
 Helps to strengthen the relationship and communication between superior –
subordinates and management – employees.
 To diagnose the strengths and weaknesses of the individuals so as to identify the
training and development needs of the future.
 To provide feedback to the employees regarding their past performance.
 Provide information to assist in the other personnel decisions in the organization.
 Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.
 To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training, and development.
 To reduce the grievances of the employees.

2.1.5 PERFORMANCE APPRAISAL PROCESS

Performance appraisal system may vary from one organization to another. For a
performance appraisal scheme to be workable, it should follow a process. Robbins
(2016), has identified six steps that need to be followed when using an appraisal system.

2.1.5.1 Established performance standard

The first step in the process is the setting up of the standards to be used as the base to
compare the actual performance of the employees. Performance standards provide the
employee with specific performance expectations for each major duty. They are
observable behaviours and actions which explain how the job is to be done plus the
results that are expected for satisfactory job performance. This should be in accordance
with the organization strategic goals. According to Cascio (2017), performance
standards should contain certain two basic kinds of information for the benefit of both
employee and of supervisor: what is to be done and how well it is to be done.

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2.1.5.2 Communicate performance expectation
In the second step the writer explained that communicating performance standard to the
employee is very essential. The employee should be informed and the standard should be
clearly explained to the employee. This helps the employee to understand his role and to
know what exactly is expected of him. Blank and Slipp (2017), also share similar view
that when conducting performance appraisal, supervisors should clearly convey work
expectations and make sure that employees understand these expectations. This can be
accomplished by incorporating equal performance standards for all employees.

2.1.5.3 Measure actual performance

The third step in the process is measuring the actual performance of employee.
Measuring actual performance is to find the worth of employee performance of a task
after a given period. To determine what actual performance is, it is necessary to acquire
information about it. Four common sources of information are available to managers or
supervisors with which they use to measure actual performance: personal observation,
statistical reports, oral reports and written reports, De Cenzo et al (1996). Measurement
of actual performance should be done through the criterion set down- any attempt to
measure actual performance and different criteria is use will not yield the desired result.

2.1.5.4 Compare actual performance with standards

After measuring actual performance it is then compared with the performance standard
set in step four. At this stage, Robbins indicated that the deviations between standard
performance and actual performance are noted. This will include recalling, evaluating
analysis of data recorded of the
actual performance.

2.1.5.5 Discuss result with employee

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Having identified deviation between actual performance and standards set, the fifth
process is to discuss results with employees. The result of the appraisal is communicated
and discussed with the employee on one-to-one basis. The result, the problem and
possible solutions are discussed with the aim of problem solving and reaching
consensus. Feedback should be given with a positive attitude as this can have an effect
on the employee future performance. The purpose of the meeting should be to solve
problems faced and motivate the employees to perform better.
2.1.5.6 Initiate corrective action if necessary
The final step in the process is decision making. Decisions are taken either to improve
the performance of the employee, take the required corrective actions, or the related
human resource decision like rewards, promotions, demotions, transfers etc. According
to the writer, by going through the above stages when embarking on performance
appraisal, studies have indicated that employees have been able to achieve targets set.
2.1.6 CONSEQUENCES OF PERFORMANCE APPRAISAL
In a research by Hamed & Imran (2011), he drew two conclusions indicating that "first,
performance reporting is omnipresent and necessary so, second, almost every individual
instance of performance reporting has something wrong with it". Performance appraisal
therefore remains omnipresent and problematic even today. The following are as some
positive and negative consequences of performance appraisal.
2.1.6.1 Some positive results of performance appraisal
 The person whose performance is appraised may develop an increased motivation to
perform effectively.
 The self and staff esteem may be increased
 The job of the person being appraised may be clarified and better defined
 Valuable communication can take place among the individuals taking part which also
include communication between the supervisor and subordinate.
 Encourage increased self-understanding among staff as well as insight into the kind
of development activities.

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 Rewards such as pay and promotion can be distributed on a fair and credible basis.
 Organizational goals can be made clearer, and they can be more readily accepted.
 Valuable appraisal information can allow the organization to do better manpower
planning, test validation, and development of training programmes.
 Better and timely service provision, there is greater citizen satisfaction.

2.1.6.2 Some Negative Results of Performance Appraisal

 The self-esteem of the person being appraised and the person doing the appraisal
may be damaged
 Large amount of time any be wasted
 The relationship among the individuals involved may be permanently worsened
thereby creating organizational conflicts
 Performance motivation may be lowered for many reasons, which includes the
feeling that performance measurement means no rewards for performance
 Money may be wasted on forms, training and a lot of support services.

2.1.6 HINDERANCE TO EFFECTIVE PERFORMANCE APPRAISAL

There are many possible sources of error in the performance appraisal process. One of
the major sources is mistake made by the rater. As subjected by Adams (2017);

2.1.614 Similarity error

When evaluators rate other people in the same way that the evaluators perceive
themselves, they are making a similarity error. Based on the perception that evaluators
have of themselves, they project those perceptions onto others. Such situation gives
advantage to some employees and others are being disadvantage.

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2.1.6.2 Central tendency

It is possible that regardless of who the appraiser evaluates and what traits are used, the
pattern of evaluation remains the same. It is also possible that the evaluator's ability to
appraise objectively and accurately has been impeded by a failure to use the extremes of
the scale. Central tendency is the reluctance to make extreme ratings in either direction;
the inability to distinguish between and among rates; a form of range restriction.
Hodgetts (2002), suggested that one way of overcoming this problem is to use a paired
comparison evaluation or an MBO approach, in which results are quantified or described
in such terms that the manager is required to give each person a more precise rating.
2.1.6.3 Halo error effect
This is the tendency to let an assessment of an individual on one trait influence the
evaluation of that person on other specific traits. Such situation affects the significance
of the appraisal programme.

2.1.6.4 Low appraiser motivation

This situation occurs if the evaluator knows that a poor appraisal could significantly hurt
the employee's future - particularly opportunities for promotion or a salary increase- the
evaluator may be reluctant to give a realistic appraisal. There is evidence that it is more
difficult to obtain an accurate appraisal when important rewards depend on the results.
Such situation can make appraisal fail.

2.1.7 REQUIREMENTS FOR EFFECTIVE APPRAISAL SYSTEM

Imade (2011), has outline some requirements for effective appraisal system as follows;
2.1.7.1 Relevance
This implies that there are (a) clear links between the performance standards for a
particular job and an organization’s goal are, (b) clear links between the critical job
elements identified through a job analysis and the dimensions to be rated on an appraisal
forms.

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2.1.7.2 Practicability
This last requirement implies that appraisal instruments should be very easy for
managers and employees to understand and to use. If it is not done this way, its
practicality can not be guaranteed.

2.1.7.3 Reliability
The third requirement of sound appraisal system is reliability. This implies there should
be consistency in judgment. For any given employee, appraisal made by raters working
independently of one another should agree closely. To provide reliable data, each rater
must have an adequate opportunity to observe what the employee has done and the
conditions under which he or she has done it, otherwise, unreliability may be confused
with reliability.

2.1.7.4 Acceptability
In practice, acceptability is he most important of all the requirements. Smith & Allwell
(2018), stressed that every human resource program must have the support of those who
will used them or else human Ingenuity will be used to thwart them.
2.1.8 PERFROMANCE APPRAISAL ON ORGANIZATIONAL
PERFORMANCE
Productivity can be defined as a measure in relating the quality and quantity of output
against the input provided by individuals to produce said output. The normal measure for
productivity is to link a rand value against hours worked or tasks accomplished. The
definition of productivity according to Benson (2014) is the output of an employee that
is measurable against the employee’s effectiveness and efficiency in the achievement of
the set goals or job tasks. Du Plessis and Ferreira (2014) stated that productivity is the
time spent by an employee actively participating in his/her job that he or she was hired
for, in order to produce the required outcomes according to the employers’ job
descriptions. As suggested by Coetsee (2014) the core cause of the productivity

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problems in the South African society are people’s motivation levels and their work
ethics. According to Benson (2014), having the technical knowledge and ability does not
guarantee that employees will be efficient and effective in their job tasks. To get
effectiveness and efficiency in the work environment one also needs to provide the
necessary resources that are required in accomplishing the task, have a supportive
management structure and lead with vision, which is in alignment to the employees’
goals and objectives. Employees are influenced by the management styles employed by
their managers and as described by Benson (2014) the transformational leadership style
can be closely tied to employee performance and productivity in an environment of
change. A study that was undertaken by Sabine, Silke and Daniel (2015) indicated that
performance was positively influenced by transformational leadership. Transformational
leadership can be defined as leadership that include the stimulation of intellects, showing
of consideration towards any human being individually as well as group related,
inspiration and idealized influence. Through management showing these traits towards
their employees, the employees will feel that the managers care about them and will
listen to them when problems arise.

2.2 THEORETICAL CLARIFICATION

2.2.1 Equity Theory
This theory was propounded by different scholars, but the most popular one is Adams
(1965) who suggested two forms of equity: distributive equity which is concerned with
the fairness with which people feel they are rewarded in accordance with their
contribution and in comparison with others; and procedural equity or procedural justice
which is concerned with the perceptions employees have about the fairness with which
procedures in such areas as performance appraisal, promotion and discipline are being
operated. In short this theory stated that ‘‘In effect, that people will remain for long time
in the institute if they are treated equitably and turn over will be high if people are
treated inequitably’.’ This theory also fails to understand the hierarchical arrangement in
the organization on which differentiate employees according their positions, academic

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levels and job experience on which may differentiate even on wages, allowances and
other benefits. From this point of view the practical implication of equality in the work
organization it is very ideal. Though it is very idealistic, but still applicable to some
circumstances in this study.
2.2.2 Contingency Theory
According to Donaldson organizations seek to attain the fit of organizational
characteristics to contingencies which leads to high performance. Therefore, the
organization becomes shaped by the contingencies (fit) to avoid loss of performance.
Thus, there is an alignment between organization and its contingencies in creating an
association between contingencies and organizational contextual characteristics.
Contingency theory is based on the premise that there is no universally appropriate or
perfect measurement system which applies equally to all organizations in all
circumstances. In fact, it is suggested that particular features of an appropriate
measurement system will depend upon the specific circumstances in which an
organization finds itself (Donaldson, 2001). The study position is that contingency
theory offers a useful way of conceptualizing the relationship between certain
“contingency” variables and organization structure (PMS design and use).In the view of
contingency theorists, the design of accounting information and control systems, that is,
one particular type of PMS, is based upon specific characteristics of the organization and
its environment, the factors influencing the design and use of Performance Measurement
Systems. This theory is applied to this study since it shows theoretically the perspective
within the organization that emphasizes how contingent characteristics or contextual
factors such as technology, size, environment, culture and strategy affect the design and
functioning of organizations (Daft, 2001).

2.3 EMPIRICAL REVIEW

In view of Nicholas & Elizabeth(2016), which purpose of the study was to

analyze the Effect of performance appraisals on organizational performance in Pokot

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Central Sub County. This study was guided by the following objective; to determine the
effect of employee productivity on organizational performance in public secondary
school in central Pokot sub County. The theories which guided this study includes,
Maslow’s hierarchy of needs theory, expectancy theory, Herzberg’s two factor theory,
Goal setting theory and Agency theory. The study adopted a descriptive survey design.
Population target included all the teachers in Pokot central Sub County who are 300 in
total with a sample size of 170 teachers. Questionnaires were used to collect data from
respondents. The pilot study was carried out in ten schools whose results were not
included in the final result. The data was collected and fed in statistical packages of
social science (SPSS) version 2.0 and was analyzed by use of descriptive data analysis
technique, and presented in the form of frequency tables. The study was to help Pokot
central Sub county to come up with better ways of performance appraisal for its
employees in order to improve organizational growth. It is also hoped that the study was
to provide information helpful in providing the managers with information that was to
help to improve employee job satisfaction which helps organization perform. Finally, the
study was to serve as a data bank for researchers who wish to conduct further research
on performance appraisals.
Adwoa, Alex & Agnes (2016), in their study find out that organizational
effectiveness and efficiency may be realized when employees are frequently assessed.
While performance appraisal and organizational effectiveness has gained attention
among scholars, there are little studies on the specific uses performance appraisals or
media through performance appraisal exercises improve corporate effectiveness. In this
light, this study examines organizational uses of appraisal systems. To address the
research aim, thematic literature review approach is employed to assess the
organizational benefits or uses of performance appraisal results. The study finds that
employee performance appraisal results are used by organizations as an instrument to
enhance employee motivation, improve corporate communication, facilitate employee
training and development and boost overall corporate success or effectiveness. The study
therefore recommends that organizations must not see employee performance appraisal

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as just an annual activity but recognize it as a continuous activity and an important
resources that can provide enormous benefits to enhance the success of the organization.
By these findings the study contributes significantly to knowledge by developing a
model of performance appraisal outcomes. The model shows the mechanisms through
which performance appraisal practices positively affect organizations and also for
empirical testing particularly in developing countries’ contexts.
Peter & David (2017), through their topic which was directed to analyze the
effect of performance appraisal on organizational performance opines that the
performance of employees is pivotal in organizational performance. Performance
appraisal is an important human resource function in the measurement of employee
performance. The purpose of this study was to find out the impact of performance
appraisal on organizational performance and to find out the moderating effect of
organizational commitment on the relationship between performance appraisal and
organizational performance. This study was carried out in three companies listed in the
stock exchange. These are: Kenya Power, KenGen and Mumias Sugar Company. The
study adopted descriptive survey design. The study population comprised 5866
employees in the three companies. It was found that performance appraisal had a
significant effect on organizational performance. The study further showed that affective
commitment, continuance commitment and normative commitment moderated the
relationship between performance appraisal and organizational performance.

Kanchan & Prashant (2017), in their study, which opines that according to Peter
Drucker 'an organization is like a tune; it is not constituted by individual sounds but by
their synthesis. The success of an organization will therefore depend on its ability to
measure accurately the performance of its members and use its objectivity to optimize
them as a vital resource. The performance appraisal plays a very important role in
success of any organization. It not only motivates the enmployee but also improves the
productivity level of any organization. Though the need of Performance appraisal is
generated in every organization but there is a difference in mechanism in public and

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private sector. This research paper is an attempt to highlight various dimensions of
appraisal in both the sectors, do comparative analysis and suggest some corrective
measures for betterment. The analysis is done on the telecom sectors of Bhopal city
including BSNL and AIRTEL
In a study by Amin & Shilas(2018), were they find out that organizations face
challenges while they live in a dynamic and competitive environment. The effectiveness
of a business constitutes its ability to perform a function with optimal levels of input and
output. Improving organizational effectiveness is a sober concern for any organization as
a matter of existence. This has to be achieved through implementation of important
organizational effectiveness factors. Enhancing organizational effectiveness is the key
for success in any business and consequently managers are expected to increase the
efficiency of their work environment. Fundamentally, this paper offers a framework for
improving organizational effectiveness. 165 questionnaires were distributed among
students in a university and collected data was analyzed through factor analysis,
reliability, correlation, and regression test. The findings revealed that training, employee
participation, performance appraisal, and job description have significant effect on
organizational effectiveness.
In a study conducted in Kenya by George, Elijah, Stephen, Robert & Pete (2018),
which study investigated the multifaceted factors influencing employee Performance
Appraisal System in the Ministry of State for Provincial Administration, Nyamira
District, Kenya. A target population of 76 employees was surveyed. A structured
questionnaire was self-administered to the employees to collect data. Multiple regression
analysis technique was used to explain the nature of the relationship between PAS and
the factors that influence it. Results of the study showed that all the five factors:
Implementation process (X1), interpersonal relationships (X2), rater accuracy (X3),
informational factors (X4), and employee attitudes (X5) had a significant positive
relationship with the performance appraisal system (Y). The regression results also
showed that 55.1% of the variation in performance appraisal system can be explained by
the changes in implementation process, interpersonal relationships, rater accuracy,

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informational factors and employee attitudes. With these findings, this study provides
many implications for the implementation of performance appraisal systems. It shows
that if these factors are taken into consideration by the ratees, the raters and the
government policy makers, the PAS can be a good performance management tool.
Yusuf (2020), in his studies titled influence of performance appraisal system on
employee. The study was guided by the specific objective namely; - to determine the
influence of training, to establish the influence of promotion, to examine the influence of
remuneration and to find out the influence of discipline on employee productivity. The
study hoped that it would provide valuable information to management that would assist
management in ensuring that performance is more than ability and motivation. The
theories included; goal setting theory, learning and training and evaluation theory,
agency theory and expectance theory respectfully. Content analysis was used to calculate
qualitative data while descriptive analysis was used to calculate mean, frequencies and
percentage. A case study was adopted due to the nature of the study and because it
would enable an in-depth analysis of the study phenomenon. The target population was
90 and a saturadete sampling method was adopted. Questionnaires were used to collect
data and was analyzed and presented through tables and charts. The researcher used both
qualitative and quantities techniques in analyzing the data. The researcher selected a
pilot group of 10 individuals to test the reliability. Validity test was done on 5
participants. Cronbach’s Alpha was calculated and come as 0.956 for part II and III and
0.903 for part IV and V. The findings from the study established that majority of
employees felt that the performance appraisal system was not the best tool in measuring
performance. Promotion influences the perception of the employees about fairness in the
organization, while remuneration that is not visible to the employee may fail to get
desired motivating effect. Organization still need to have displinary procedure, whether
formal or informal, that carries successively stiffer penalties for repeated or for most
serious offenses.

2.4 GAPS IN LITERATURE

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Various studies have been conducted on the effect of performance appraisal on
Organizational productivity. This study covers the gap of unavailability of study on
performance appraisal on organizational performance. So this research tends to cover the
gaps between performance appraisal and the productivity of an organization with a
particular focus to Femtech I.T & Afatech I.T in Ilorin. In completion of this research
work, it will be helpful to address issues relating to performance appraisal and
organizational productivity.

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