The performance as a tool of motivation in Nigeria enterprises Case Study of the University of Portharcourt

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The performance as a tool of motivation in Nigeria enterprises

Case Study of the University of Portharcourt

ABSTRACT

Nigerian universities are presently experiencing a number of challenges, primary among which is dearth of experienced academics, due to the mass exodus of lecturers to other countries in Africa and overseas, where the environment is more conducive to work and remuneration packages are more competitive. Series of research studies have established that a strong relationship exists between human resource (HR) practices and employee motivation and performance; however much still needs to be done in terms of investigating how it applies to academics in Nigerian universities. This study therefore set out to examine the impact of performance appraisal (PA), which is a key HR practice, on the motivation and performance of academics in Nigerian universities. The study sample was drawn from four (4) public universities in south western Nigeria. Data was sourced with the aid of a questionnaire, while percentage and multiple regression analysis were used for data analysis. Findings showed that the university academics see their performance appraisal system as not being accurate and fair enough because it does not capture adequately, all the job components that make up their performance during the review period. The performance appraisal system was also found to exert a strong influence on the academics’ motivation and overall performance. It was recommended that the PA system for academics should be reviewed by university management such that all the components of their job are captured, evaluated, and adequately rewarded. This is expected to impact positively on the motivation and overall performance of the academics, thereby working as a veritable tool for steering university education towards the right direction for national development.

CHAPTER ONE

INTRODUCTION

The long term success of an organization is related to its ability to measure how well its employees perform within a predetermined period, and how effectively it uses that information to ensure that performance meets set standards, and also improves over time (Fisher, Schoenfeldt and Shaw, 2003). Grote (2000) refers to this process as performance management, and describes it as a handy umbrella term for all organizational activities involved in managing people on the job. Performance management helps to direct and motivate employees to maximize their efforts on behalf of the organisation; it is thus an essential instrument for an organization to meet its strategic objectives (Werner, Schuler, and Jackson, 2012).

Performance appraisal (PA) is that part of the performance management process in which an employee’s contribution to the organization, during a specific period is assessed. According to Mullins (2002), the underlying objective of PA, is to improve the performance of the individual employee, thereby leading to improvement in the performance of the organization as a whole. PA is one of the ranges of tools that can be used to manage performance effectively, in that it provides data which feeds into other elements of the performance management process. As noted by Mathis and Jackson (2008), a PA system is often the link between additional pay and rewards that employees receive, and their job performance. If used effectively, PA can improve motivation and performance, but if used inappropriately, it can have disastrous effects (Fisher et al, 2003). For PA to be effective, it must of necessity be anchored on the performance criteria that have been outlined for the job. Riggio (2003) describes performance criteria as the means for determining successful or unsuccessful job performance. They are one of the products of a detailed job analysis. Performance criteria spell out the specific elements of a job and make it easier to develop the means of assessing levels of successful or unsuccessful job performance. It can thus be inferred that an appraisal system not hinged on this all important criteria, can neither be appropriate nor fair, particularly to the employee, whose performance is being evaluated. In fact, some key points in the arguments of those opposed to performance appraisal is that, most of the time, wrong things are rated and the wrong methods used (Deming, 1986; Gilliland and Langdon, 1998). Understand why companies use performance appraisals Describe basic characteristics of performance appraisals List the characteristics of an effective performance appraisal Compare the advantages and disadvantages of relative versus absolute appraisals Learn how to conduct a performance appraisal meeting Understand the biases inherent in performance appraisals

Background of the Study

When employees have goals, they tend to be more motivated if they also receive feedback about their progress. Feedback may occur throughout the workday, but many organizations also have a formal, company-wide process of providing feedback to employees, called performance appraisalA process in which a rater or raters evaluate the performance of another employee.. A performance appraisal is a process in which a rater or raters evaluate the performance of an employee. More specifically, during a performance appraisal period, rater(s) observe, interact with, and evaluate a person’s performance. Then, when it is time for a performance appraisal, these observations are documented on a form. The rater usually conducts a meeting with the employee to communicate performance feedback. During the meeting, the employee is evaluated with respect to success in achieving last year’s goals and new goals are set for the next performance appraisal period. Even though performance appraisals can be quite effective in motivating employees and resolving performance problems, in reality only a small number of organizations use the performance appraisal process to its full potential. In many companies, performance appraisal takes the form of a bureaucratic activity that is mutually despised by employees and managers. The problems a poor appraisal process can create may be so severe that many experts, including the founder of the total quality movement, Edward Deming, have recommended abolishing appraisals altogether.Carson, P. P., & Carson, K. D. (1993). Deming versus traditional management theorists on goal setting: Can both be right? Business Horizons, 36 (5), 79–84. On the other hand, creating and executing an effective appraisal system actually leads to higher levels of trust in management.Mayer, R. C., & Davis, J. H. (1999). The effect of the performance appraisal system on trust for management: A field quasi-experiment. Journal of Applied Psychology, 84, 123–136. Therefore, identifying ways of increasing appraisal effectiveness is important.

Statement of the Research Problem

In Nigeria today, there is a general atmosphere of discontent pervading the entire labour scene, and Nigerian university academics are not left out in the general state of dissatisfaction and frustration (Ologunde, Asaolu, and Elumilade, 2006). Nigerian public universities have witnessed a series of industrial conflicts in recent years due to failure of the employers to review their conditions of service, despite the increasingly high cost of living (Tamuno, 1999). Many university teachers are leaving because of deteriorating conditions of service, lack of adequate teaching and research facilities and relatively poor remuneration (Sanda, 1991). In Nigeria today, the general state of poverty makes economic reward a very important reason why people go out to work, thereby making money to rank highly as a critical motivator (Muo, 2007).This situation has made it imperative for Nigerian workers to pay particular attention to human resource (HR) practices which have direct bearing on their financial rewards and social status. One of such HR activities is performance appraisal (PA), which is the focus of this study.

A major outcome of PA is promotion and its attendant increase in financial benefits plus enhanced professional and social status (Tessema and Soeters, 2006; Shahzad, Bashir and Ramay, 2008). Performance appraisal outcomes tend to have high motivational impact and are a major determinant of employee performance. The three main functions of universities, which incidentally also define the job description of university academics, are teaching, research and community service (B-HERT, 2006; Sharyelfu, 1999). In today’s world of knowledge explosion and flood of information, university academics must, of necessity, be active learners and organizers of knowledge. In addition to teaching, university academics are responsible for creating knowledge through research and getting it published in scholarly journals. They are also expected to be relevant to the society at large in terms of service to the community (Aslam, 2011; Skerritt, 1992). This matrix of tasks makes the job of university academics highly demanding, thereby requiring an effective performance evaluation system that will ginger higher motivation for enhanced job performance (Aslam, 2011).

It must be emphasized that an effective performance appraisal system is one that takes cognizance of all the components of an employee’s job performance, and does not focus on selected ones. In Nigerian public universities, experience has shown that emphasis during performance evaluation of academics is mainly on achievement in research, as documented by number of scholarly publications, within a particular review period. Performance on the teaching and community service components of the job are often relegated to the background, such that no matter how well a lecturer performs on these aspects, it makes insignificant contribution to his desired appraisal outcome. It is only the research efforts, as evidenced by the number of scholarly publications churned out within the review period, that really count.

However, despite the fact that engagement in research helps to update, sharpen, enlarge and enrich the teacher’s knowledge base, which is in turn transferred to the students, the present conditions in the Nigerian public university system is hardly conducive for conducting meaningful research. Facilities that can stimulate and promote academic research such as current journals and textbooks, functional libraries and laboratories, internet facilities, research grants and so on, are very inadequate, making research an uphill task and costly venture for university academics.

In the light of the foregoing, this study set out to investigate how an appraisal system that is anchored mainly on one job component, that is, research output, affects the motivation and overall performance of university academics in Nigeria. Furthermore, although a number of studies have examined effect of performance appraisal on university teachers’ performance (Shahzad et al, 2008; Anjum et al, 2011; Akinyele, 2010; Ahmad, 2011; Rasheed et al, 2011; Aslam, 2011), none of these studies focused on the aspect of performance criteria.

Objectives of the Study

The main objective of the study was to examine the impact of performance appraisal system on the motivation and overall performance of academics in Nigerian universities. The specific objectives were

i. to ascertain the university academics’ perception of the accuracy and fairness of their performance appraisal system.

ii. to assess the effect of the performance appraisal system on the motivation and performance of the university academics.

Significance of the Study

Giving employees feedback is not synonymous with conducting a performance appraisal, because employees may (and should) receive frequent feedback. The most effective feedback immediately follows high or low performance. Therefore, waiting for a formal process to give feedback would be misguided. A formal appraisal is often conducted once a year, even though there are some organizations that conduct them more frequently. For example, there are advantages to conducting quarterly appraisals, such as allowing managers to revise goals more quickly in the face of changing environmental demands.Odiorne, G. S. (July–August 1990). The trend toward the quarterly performance review. Business Horizons, 38–41. Conducting appraisals once a year has the advantage of being more convenient for managers and for effectively tying pay to annual pay raises or bonuses.

Performance appraisals can be important tools to give employees feedback and aid in their development. Yet feedback is only one reason why companies perform appraisals. In many companies, appraisals are used to distribute rewards such as bonuses, annual pay raises, and promotions. They may also be used to document termination of employees. Research shows that performance appraisals tend to be viewed as more effective when companies tie them to reward decisions and to terminate lower performers. Lawler, E. E. III (2003). Reward practices and performance management system effectiveness. Organizational Dynamics, 32,(4), 396–404. This is not surprising in light of motivation theories such as reinforcement theory, which indicates that behavior that is rewarded is repeated. Tying appraisal results to rewards may lead to the perception that performance is rewarded. However, if performance appraisal ratings are not accurate, it is possible for appraisals to be a major cause of reward unfairness.

Research Questions

What are the disadvantages of using only supervisors as the rater? What are the disadvantages of using peers, subordinates, and customers as raters? Do you believe that self-appraisals are valid? Why would it be helpful to add self appraisals to the appraisal process? Can you think of any downsides to using them? Why do some managers intentionally give an employee a higher rating than deserved? What are the disadvantages of biased ratings? How would this tendency be prevented? Some recommend that performance appraisals should be abolished altogether. What do you think about this approach? What are the downsides of eliminating appraisals altogether? If your objective is to minimize the effects of rater biases, what type of appraisal system would you design? What are the characteristics of an effective appraisal system? Research identified at least three characteristics of appraisals that increase the perception that they are fair. These characteristics include adequate notice, fair hearing, and judgment based on evidence. adequate notice Letting employees know what criteria will be used during the appraisal. Involves letting employees know what criteria will be used during the appraisal. Unfortunately, in many companies the first time employees see the appraisal form may be when they are being evaluated. Therefore, they may be rated low on something they didn’t understand was part of their performance. fair hearing Ensuring that there is two-way communication during the appraisal process and the employee’s side of the story is heard. means ensuring that there is two-way communication during the appraisal process and the employee’s side of the story is heard. judgment based on evidence Documenting performance problems and using factual evidence as opposed to personal opinions when rating performance. involves documenting performance problems and using factual evidence as opposed to personal opinions when rating performance.

As a student, would you rather be evaluated with respect to some objective criteria? For example, you could get an A if you correctly answer 90% of the questions in the exam, but would get a B if you answered only 80%. We are calling this type of appraisal an absolute rating because the grade you get depends only on your performance in respect to the objective criteria. The alternative to this approach is relative ranking. In this system, you would get an A if you are one of the top 10% of the students in class, but you would get a B if you are between 10% and 20%. In a relative ranking system, your rating depends on how your objective performance (test grade) compares with the rest of the students’ grades in your class. If you say you would prefer an absolute rating, you are not alone. Research shows that ranking systems are viewed more negatively by employees. However, many major corporations such as GE, Intel, and Yahoo are using relative rankings and truly believe in its advantages. For example, Jack Welch, the former CEO of General Electric, instituted a forced ranking system at GE where 20% of employees would be in the top category, 70% would be in the middle, and 10% would be at the bottom rank. Employees who are repeatedly ranked at the lowest rank would be terminated. Relative rankings may create a culture of performance by making it clear that low performance is not tolerated, however, there are several downsides to rankings. First, these systems carry the danger of a potential lawsuit. Organizations such as Ford and Microsoft faced lawsuits involving relative rankings because employees who were older, female, or minority members were systematically being ranked in the lowest category with little justification. Second, relative rankings are also not consistent with creating a team spirit and may create a competitive, cutthroat environment. Enron is an organization that used relative rankings to its detriment. Third, relative systems have limited value in giving employees concrete feedback about what to do next year to get a better ranking. Despite their limitations, there is some research showing that using them for a few years may help the organization become more performance-oriented and eliminate stagnation by weeding out some employees with persistent performance problems. As long as these systems fit with the company culture, are not used in a rigid manner, and are used for a short period of time, they may be beneficial to the organization. Boyle, M. (5/28/2001). Performance reviews: Perilous curves ahead. Fortune, 143 (11), 187–188; Lawler, E. E. III (2003). Reward practices and performance management system effectiveness. Organizational Dynamics, 32,(4), 396–404; McGregor, J. (1/9/2006). The struggle to measure performance. Business Week, 26–28.

Research Hypothesis

H0: Employee Performance has a significant impact as a motivational tool in the overall performance of enterprises

H1: Employee Performance does not has a significant impact as a motivational tool in the overall performance of enterprises

H2: There is a positive relationship between employees’ performance appraisal and the general performance of enterprises

H3: There is a negative relationship between employees’ performance appraisal and the general performance of enterprises

Conceptual and Operational Definitions

A performance appraisal meeting is the most important component of a performance appraisal. After the rater uses the company’s appraisal form to evaluate the performance of the ratee, both sides meet to discuss positive and negative instances of performance. Thus, the meeting serves as the key medium through which the rater gives feedback to the rate. The goal of providing performance feedback is to help the ratee solve performance problems and motivate the employee to change behavior. Conducting this meeting is often stressful for both parties, and training managers in providing performance feedback may be useful to deal with the stress of the managers as well as creating a more positive experience for both parties.Davis, B. L., & Mount, M. K. (1984). Effectiveness of performance appraisal training using computer assisted instruction and behavior modeling. Personnel Psychology, 37, 439–452. In the most effective meetings, feedback is presented in a constructive manner. Instead of criticizing the person, the focus should be on discussing the performance problems and aiding the employee in resolving these problems. By moving the focus of the conversation from the person to the behaviors, employee defensiveness may be reduced. When the supervisor is constructive, employees develop a more positive view of the appraisal system. Another approach to increase the effectiveness of appraisal meetings is to increase employee participation. When employees have the opportunity to present their side of the story, they react more positively to the appraisal process and feel that the system is fair. Finally, supervisors should be knowledgeable about the employee’s performance. When it becomes clear that the person doing the evaluation has little understanding of the job being performed by the employee, reactions tend to be more negative. Cawley, B. D., Keeping, L. M., & Levy, P. E. (1998). Participation in the performance appraisal process and employee reactions: A meta-analytic review of field investigations. Journal of Applied Psychology, 83, 615–633; Cederblom, D. (1982). The performance appraisal interview: A review, implications, and suggestions. Academy of Management Review, 7, 219–227; Burke, R. J., Weitzel, W., & Weir, T. (1978). Characteristics of effective employee performance review and development interviews: Replication and extension. Personnel Psychology, 31, 903–919.

A performance appraisal meeting serves as the key medium through which the rater gives positive and negative feedback to the ratee, helps the ratee solve performance problems, and recognizes effective performance.

Before the Meeting Ask the person to complete a self-appraisal. This is a great way of making sure that employees become active participants in the process and get their voice heard. Complete the performance appraisal form. Document your rating using many examples. Have more examples handy. Avoid recency bias. Be sure that your review covers the entire year’s performance, not just recent events. Handle the logistics. Be sure that you devote sufficient time to each meeting. If you schedule appraisals back to back, you may lose your energy in later meetings. Be sure that the physical location is conducive to a private conversation. During the Meeting Be sure to recognize effective performance. Give specific praise. Do not start the meeting with a criticism. Starting with positive instances of performance helps establish a better mood and shows that you recognize what the employee is doing right. Give employees lots of opportunities to talk. Ask them about their greatest accomplishments, as well as opportunities for improvement. If they touch on an area you wanted to cover, provide your thoughts. Show empathy and support. Remember: your job as a manager is to help the person solve performance problems. Identify areas where you can help. Set goals and create an action plan. After the Meeting Continue to give the employee periodic and frequent feedback. Follow through on the goals that were set. Sources: Make employee appraisals more productive. (September 2007), HR Focus, 84 (9), 1, 11–15; Ryan, L. (1/17/2007). Coping with performance-review anxiety. Business Week Online, 6; Stone, D. L. (1984). The effects of feedback sequence and expertise of the rater on perceived feedback accuracy. Personnel Psychology, 37, 487–506; Sulkowicz, K. (9/10/2007). Straight talk at review time. Business Week, 16.

Performance appraisal is by nature a subjective event. Unless the performance appraisal is purely relying on objective criteria such as sales, it requires one or more human beings to observe and evaluate another and arrive at a consensus. Raters, intentionally or unintentionally, make mistakes or exhibit biases. These biases trickle down into the appraisal system and can affect other decisions that are based on appraisals, such as pay and promotion. Therefore, being aware of these tendencies is the first step to managing their influence over the appraisal system.

A performance appraisal does not occur between strangers. The rater and ratee have an existing relationship. If they like or dislike each other, these feelings may bias the ratings. For example, research shows that regardless of their objective performance levels, managers give employees they have a good relationship with higher ratings.Duarte, N. T., Goodson, J. R., & Klich, N. R. (1994). Effects of dyadic quality and duration on performance appraisal. Academy of Management Journal, 37, 499–521. It is possible that sometimes liking is not a bias and a manager likes an employee because of high performance levels.Varma, A., DeNisi, A. S., & Peters, L. H. (1996). Interpersonal affect and performance appraisal: A field study. Personnel Psychology, 49, 341–360. Still, for some managers, liking someone may mean ignoring the faults of the person and selectively remembering the positive things that person has done. One way of dealing with this problem may be journaling. By recording positive and negative performance incidents throughout the year for each employee, managers may recall each employee’s performance more accurately.DeNisi, A. S., Robbins, T., & Cafferty, T. P. (1989). Organization of information used for performance appraisals: Role of diary-keeping. Journal of Applied Psychology, 74, 124–129.

Assumptions

One of the factors that create bias in appraisals is the stereotypes that raters may have regarding the gender, race, age or another characteristic the person being rated. Beliefs about different groups may be generalized to the person in question even though they may have little basis in reality. For example, research shows that women in stereotypically male jobs were rated lower than women in stereotypically female jobs. Similarly, attractive women were rated higher if they held non-management jobs but they were rated lower if they held management jobs. When factors that have no bearing on one’s job performance are used to evaluate the person, employees, overall, will be demoralized, the appraisals will lose their effectiveness, and the company may face costly lawsuits.Heilman, M. E., & Stopeck, M. H. (1985). Being attractive, advantage or disadvantage? Performance-based evaluations and recommended personnel actions as a function of appearance, sex, and job type. Organizational Behavior and Human Decision Processes, 35, 202–215; Lyness, K. S., & heilman, M. E. (2006). When fit is fundamental: Performance evaluations and promotions of upper-level female and male managers. Journal of Applied Psychology, 91, 777–785. Understanding the importance of eliminating stereotypes from performance appraisals and training managers to accurately observe and evaluate performance may be beneficial in limiting exposure to this type of bias. Performance appraisals involve observing and measuring an employee’s performance during an appraisal period, recording these observations, communicating results to the employee, and recognizing high performance while devising ways of improving deficiencies. Most appraisals are conducted by the supervisor, but there are many advantages to using 360-degree appraisals. Appraisals that are more effective give employees adequate notice, fair hearing, and judgment based on evidence. Some companies use relative rankings where employees are compared to each other, but this system is not suitable to all companies. A performance appraisal meeting should be planned and executed carefully, with the supervisor demonstrating empathy and supportiveness. There are intentional and unintentional biases inherent in appraisals and being aware of them, increasing rater accountability, and training managers may be useful in dealing with some of them.

1.10. The scope of the study

1.10.1 Time scope

The study covered years between 2007−2013 that gave the researcher a true picture and drew up the rightful conclusion about the topic in question and took place between February− June 2011.

1.10.2 Geographical scope

The researcher was intending to focus his finding s on the impact of employee performance appraisal and organizational performance in University Of Portharcourt which is located in Portharcourt, Rivers State in Nigeria.

1.10.3 Subject of scope

The study focused on determining how employee relationship as the independent variable affects organizational performance which is the dependent variable.

1.10.4 Significant of the study

1) The significance of the study was the provision of knowledge and skills to me a researcher and gained skills of doing research and came to know the relationship between variables which was under study

2) Others researchers and scholars will also use the study as literature review to investigate other parameters within the same or similar organization.

3) The study will help the general public to know how the organization relates with its employees in order to improve their performance.

4) The study was intended to help the organization understudy to improve performance through good employee relationship.

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