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Impact of Performance Appraisal on Employee Productivity in Nigeria Breweries Plc

Authors:
  • Nile University of Nigeria Abuja- Honoris United Universities
THE INTERNATIONAL JOURNAL OF BUSINESS & MANAGEMENT
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THE INTERNATIONAL JOURNAL OF
BUSINESS & MANAGEMENT
Impact of Performance Appraisal on Employee
Productivity in Nigeria Breweries Plc
1. Introduction
Performance appraisal is a discussion and review of employees’ performance of giventasks and responsibilities
globally. It is centred on results gotten by the employee in his/her job, not on the personality characteristics of the
employee. Performance appraisal is an essential instrument for human resource management. It is a means for
performance evaluation and also achieving performance enhancement among employees of an organization. As a
management activity which increases the chances of achieving organizational goals, performance appraisal makes it
compulsory for employees of an organization to know what is expected of them, and the indicators in which the overall
productivity will be measured in order to make certain of staff progress, goal accomplishment, and organizational growth.
Performance appraisal is a regular or systematic evaluation of the performance of an employee on his current job and also
in relation to future jobs that he/she may be required to take up (Hartzell, 2006). It evaluates and measures the results of
the performance of employees indicating their deficiencies and potentialities so that they can improve overtime. A decent
appraisal system is very important to the supervision of employees in an organization. The success of the organization
depends mainly on a decent appraisal system. When there’s good appraisal system, those employees who contribute more
will be effectively rewarded and they are likely to be promoted into positions of greater responsibilities (Stonner, Freeman
& Gilbert, 2005). Therefore, for any appraisal system towork effectively, the employees must understand it, feel it as fair,
and must be work oriented enough to care about the results (Habibu, 1992). One approach that would help foster this
understanding is for the employees to contribute in the system designed and be trained to some extent in performance
appraisal.
The fundamental objective of performance appraisal is an organization is to increase the employees’ productivity.
Therefore, performance evaluation provides adequate feedback on how employees are performing, by divulging them to
knowledge and the result of their work; avenues for participating in the setting of tasks and goals; clear and attainable
goals of the organization (Mullins, 1999). By undertaking these activities, it will lead to the improvement of employees’
performances, and thus higher productivity in the organization.
Nigerian brewery plc is the largest brewing firm in the country. The company has a growing export business
which covers global sales and marketing of their brands and dates back to 1986. NB plc offers sales, marketing and
logistics support to make the brand shelf-ready in international markets, which includes world class outlets such as TESCO
and ASDA stores. NB plc brands are available in over thirteen countries across the world. Nigerian breweries plc also
partake in performance appraisal exercises. The degree to which performance appraisal activities have resulted to
productivity of the company is the main focus of this research study.
Dr. Abbas Umar Ibrahim
Head, Department of Business Administration,
Nile University of Nigeria, Nigeria
Cross Ogohi Daniel
Head, Department of Banking and Finance/Public Administration,
Nile University of Nigeria, Nigeria
Abstract
:
This research study is mainly on the “impact of performance appraisal on employee’s productivity”. This research was
conducted at Nigeria Breweries plc, as a case study that would help guarantee high productivity of products and services
in the organization. It also examines the promotion, motivation, placement, training and job satisfaction of employees so
as to appraise the job performance in the organization. The numbers gathered were analysed with the use of Statistical
Package for Social Sciences (SPSS). Chi-Square analysis and Percentage distribution are the two techniques used in the
research. The research study was time limited and also the cost involved in conducting the study and getting the project
work done was correctly budgeted. The findings of the research survey discovered that objective and well planned high
performance of employees productivity, retraining and consistent training are to be organized for the people involved in
appraisal programme.
Keywords: Performance appraisal, employee productivity, Nigeria breweries Plc
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1.1. Statement of the Problem
Performance appraisal offers a good opportunity to properly recognize employee’s contributions and
achievements to the organization, and to make sure that a strong relationship is established and maintained between
reward and productivity. It is essential in an organization because it helps creates an environment that allows open
communication, and also helps in clarifying goals and expectations. It helps brings about progressive feedback and proper
counsel in order to improve employee productivity. Nevertheless, it has been observed that performance appraisal system
at Nigeria breweries plc is suffering some major defects which include lack of employees’ participation in setting
organizational goals that explain the organizational expectations and goals, lack of feedback regarding performance
appraisal results to employees. Therefore, the research study investigated the effect of performance appraisal on
employees’ performance at Nigeria breweries plc.
1.2. Objective of the Study
The main objective of this research study is to examine the effects of performance appraisal on employees’
productivity at Nigeria brewery plc. Other specific objectives are to:
To ascertain the effect of compensation on employee’s productivity in Nigeria brewery plc.
To identify the significant relationship between performance appraisal and employee’s productivity in Nigeria
brewery plc.
1.3. Research Hypothesis
The hypothesis for the projected research study tested at 0.05 levels of significance are as follows:
H1: There is effective compensation on employee productivity in Nigeria brewery plc.
H2: There are significant relationship between performance appraisals and employee’s productivity in Nigeria
brewery plc.
2. Literature Review
2.1. Conceptual Framework on Performance Appraisal
Performance appraisal can be regarded as the process of recording and assessing employee’s performance for the
purpose of drawing conclusions about employees that lead to decisions (Cook & Crossman, 2004). Performance appraisal
is an analysis of an employee’s recent failures and successes, individual strengths and weaknesses and the suitability for
promotion or advance training and time to time evaluation of employee’s performance measured against the job’s
requirements or stated (Mani, 2002; Terry & Franklin, 2003). In simple terms,
performance appraisal refers to the assessment of employee’s productivity in a systematic manner, the productivity being
measured against factors such as initiative, job knowledge, supervision, leadership abilities, quality and quantity of output,
judgement, cooperation, versatility, health and the like (De Waal, 2004).Performance appraisal is a formal and organized
interaction between a subordinate and supervisor, that regularly takes the method of a periodic interview which can be
annually or semi-annually, in which the work performance of the employee is well examined and discussed with a sight of
recognizing strengths and weaknesses as well as threats and opportunities for skills development and improvement
(Gabris & Ihrke, 2000). A long-term process for evaluating employee’s performance would not only be in the interest of
the individual but also to the organisation. Stalz (1966) explains that organizations should look at the content of the
appraisal system first and satisfy itself that the appraisal system is well understandable and in order not only to the
appraiser but also to the appraisee. He also suggests that the appraisal system should be given to the appraisee who will
return it to the appraiser, who then rates the appraisee and returns the form to the appraise to go through and sign if
he/she agrees with the rating. But even if the employee does not agree with his supervisors rating he/she would give
his/her own remark, and still signs the appraisal arrangement. The arrangement then goes to the next senior officer or
personnel department or the appraisal committee or the managing director as the case may be where the boss rating is
changed, added to, and challenged, but the final appraisal result should be communicated to the appraisee through his/her
immediate boss who will later on discuss the final performance appraisal result in a post appraisal interview. Marmoria
(1995) agreed with Stalz (1966) that the process of performance appraisal starts with the creation of performance
standards, followed by communicating principles to the workers because if left to themselves, would find it extremely
difficult to know what is expected of them. This is followed by measurement of actual performance and then compare and
contrast the actual performance to the performance standard required and discuss the outcome of the appraisal with the
employee and if required, initiate corrective action.
2.2. Methods of Performance Appraisal
There are various approaches of performance appraisal that have been established by researchers. However, the
study will further discuss few of the approaches. Ranking Methods: According to Wayne (1992) under performance
appraisal method, top managers rank their subordinates in order of their value, starting from the best to the worst. The
comparative position of each worker is expressed in terms of his numerical rank. Based on this appraisal, individuals are
ranked from highest to lowest. It is presumed that the difference between the first and second employee is equal to
difference between 21st and 22nd employee. In ranking method, the manager compares one person to another rather than
work standards.
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Management by Objectives Method: MBO is a method recognised by management guru Peter Drucker, to define a method
of performance appraisal that is based on the setting of clear and measurable objectives, and the use of those objectives to
appraise and review performance. MBO is considered as the best and fairest way to plan for and develop effectively
performing employees when done correctly (Drucker, 1954). The principle behind Management by Objectives (MBO) is to
make certain that everyone in the organization contributes in goals setting, must have a clear understanding of the aims
and objectives of the organization, and must have the awareness of their own roles and responsibilities in achieving the
organisation’s aims and objectives. To complete MBO method, managers and employees must act to implement and
achieve their desired plans, which will help achieve those of the organization.
MBA Strategy: Three basic parts
All the employees within an organization are assigned to a distinct set of objectives that they try to reach during
the usual operating period. These objectives are mutually set and agreed upon by managers and their employees
(subordinates).
Performance reviews are conducted occasionally in order to determine how employees are close to attaining their
objectives.
Rewards are given to employees on the basis of how close they come to meeting their goals.
According to McNamara (2000) in MBO, employees and management work together to set goals with the
determination of helping employees to achieve continuous development through a continuing process of goal
setting, feedback and correction. As a result of their contribution, subordinates are more likely to be motivated in
accomplishing the goals and to respond to criticism that arises from subsequent objective capacities of
performance.
2.3. Employee Productivity
In the organizational setting, employee productivity is defined as the degree to which an employee of an
organization contributes to achieving the goals of the organization (Greenberg, 1996). Mathias and John (2013) defined
employee productivity as a measure of the quality and quantity of work done, considering the cost of the resources used.
McNamara (2003) additionally states that results are always the final and specific outputs desired from the worker.
Results are regularly stated as products or services for an internal or external customer. They may be in form of impact on
a community, financial accomplishments, and so whose results are conveyed in terms of quality, quantity, time or cost.
Employee productivity includes quality of output, quantity of output, presence at work and cooperativeness, timeliness of
output (Bernardin, 2007). Employee productivity is simply understood as the related accomplishments expected of an
employee and how well those accomplishments are executed.
2.4. Test of Hypotheses
2.4.1. Hypotheses One
H1: There are effective compensation on employee productivity in Nigeria brewery plc.
H0There are no effective compensation on employee productivity in Nigeria brewery plc.
Effective Employee
Productivity
Nigeria
Brewery Plc.
Effective employee
productivity
Pearson Correlation
Sig. (2-tailed)
N
1
110
.536 **
.000
110
Nigeria brewery plc.
Pearson Correlation
Sig. (2-tailed)
N
.536 **
.000
110
1
110
Table 1: Table of Correlation between Effective Compensation on
Employee Productivity and Nigeria Brewery Plc Correlations
**Correlation Is Significant at the 0.01 Level (2-Tailed)
According to above calculations it is observed that amount of correlation coefficient between employee
productivity is equal to 53.6 per cent and considering that a significant level is less than 5%. Then we can say that there is
a positive relationship between employee productivity and Nigeria brewery plc. This implies that one per cent increase in
effective Nigeria brewery plc will lead to 53.6% increase in level of employee productivity.
2.5. Regression Analysis Test of Level of Employee Productivity and Nigeria Brewery Plc
Model Su
mmary
Model
R
R Square
Adjusted
R Square
Std. Error of
the Estimate
1
.965
a
.716
.586
3.79952
Table 2: Model Summary
a. Predictors: (Constant), Employee Productivity
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Regression coefficient of R = .965 or 96.5% indicate that relationship exist between independent variables and
dependent variable. The coefficient of determination R2 = 0.716 which show that 71.6% of variation in level of Nigeria
brewery explained by effective employee productivity. The development adjusted R-square in the table shows that the
dependent variable, (level developing economy) is affected by 58.6% by independent variable (effective employee
productivity). It shows that effective employee productivity is responsible for Nigeria brewery plc.
Coefficients
a
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig.
B
Std.
Error
Beta
1
(Constant)
effective infrastructure
failure
12.310
1.056
.901
.085
.536
13.656
12.426
.002
.000
Table 3: Coefficientsa
a. Dependent Variable: Level of Employee Productivity
The coefficient of determination for effective employee productivity is positive (1.056) and is highly significant
(0.001) in ensuring level of performance. The p-value of 0.000 is less than the t-statistic value of 12.426 and the standard
error value of 0.085. This implies that a unit increase in effective infrastructure failure will lead to 1.056 increases in level
of performance. Therefore, the null hypothesis is rejected and alternative hypothesis accepted that there is a relationship
between the effective employee productivity and Nigeria brewery plc.
2.6. Hypothesis two
H2There are significant relationship between performance appraisals and employee’s productivity in Nigeria
brewery plc.
H0:There are no significant relationship between performance appraisals and employee’s productivity in Nigeria
brewery plc.
Correlations
Performance
appraisal
Employee
productivity
Performance appraisal
Pearson Correlation
Sig. (2-tailed)
N
1
110
.473**
.000
110
Employee productivity
Pearson Correlation
Sig. (2-tailed)
N
.473 **
.000
110
1
110
Table 4: Table of Correlation between Performance Appraisal and Employee Productivity
**. Correlation Is Significant at the 0.01 Level (2-Tailed)
According to above calculations is observed that amount of correlation coefficient between performance appraisal
and employee productivity is equal to 47.3 per cent and considering that a significant level is less than 5%. Then we can
say that there is a positive relationship between performance appraisal and employee productivity. This implies that one
per cent increase in performance appraisal will lead to 47.3% increase in employee performance in Nigeria brewery plc.
2.7. Regression Analysis Test of Performance Appraisal and Employee Productivity
Table 5: Model Summary
a. Predictors: (Constant), Performance Appraisal
Regression coefficient of R = .773 or 77.3% indicate that relationship exist between independent variables and
dependent variable. The coefficient of determination R2 = 0.624 which show that 62.4% of variation in improving the
employee productivity is explained by appraisal performance. The adjusted R-square in the table shows that the
dependent variable, (improving the employee productivity) is affected by 72.2% by independent variable (performance
appraisal). It shows that there dare positive performances on improving the developing economy.
Model Summary
Model
R
R Square
Adjusted
R Square
Std. Error of
the Estimate
1
.773
a
.624
.722
3.96426
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Coefficients
a
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig.
B
Std. Error
Beta
1(Constant)
Employee
productivity
15.036
1.319
.806
.125
.473
18.644
10.520
.000
.000
Table 6: Coefficientsa
a. Dependent Variable: improving the employee productivity
The coefficient of determination for performance appraisal is positive (1.319) and is highly significant (0.000) in
improving the employee productivity. The p-value of 0.000 is less than the t-statistic value of 10.520 and the standard
error value of 0.125. This implies that a unit increase in performance appraisal will lead to 1.319 increases in improving
employee productivity. Therefore, the null hypothesis is rejected and alternative hypothesis that there are positive
impacts of performance appraisal on improving the employee productivity.
3. Discussion
The research study focuses mainly on the impact of performance appraisal on employee’s performance. Precisely,
the study shows the level of awareness of existence of performance appraisal, measures the impact of performance
appraisal on employee’s performance and lastly, identifies problems to effective performance appraisal system in Nigeria
breweries plc. The acquired findings indicate that the level of performance appraisal awareness is relatively high among
the employees and performance appraisal has significant impact on employee’s performance. The research findings also
show that failure to provide on time feedback was a big challenge to performance appraisal in Nigeria breweries plc.
4. Conclusion
From the research findings, the study decided that organizations should evaluate their employees frequently
through accomplishments, organizational goals, utilized targets and time management as it would help increase
employees productivity. From the research results, the study recommend that organizations should develop and
implement performance appraisal methods to help provides opportunities to the organization by recognizing employees
training needs, help workers on time management through proper planning, offer poor performers are chance to improve,
help employees meet performance objectives, helps managers to make cognisant decisions about assignments and
promotions based on appropriate facts and enhance synergies of employees.
From the research results, the research study states that organizations should use the behavioural performance
evaluation method as it was statistically important in impelling employee’s relationship through increased interpersonal
relationships, team work and nurtured integration, reliability of the workers who may work without adequate
supervision, adaptation of employees to changing environment and through individual staff improvement plan which help
employees plan for their future career development.
The study states that applying performance appraisal methods in order to recognise employees rewards and provides
opportunity to establish individual development strategy, encourage the individual work achievement and planning of
targets and making theorganization make conversant decisions on how to promote their employees. Lastly, theresearch
study concludes that implementation of management by objectives as performance appraisal was statistically important in
appraising employee’s performance.
5. Recommendation
From the above findings and conclusion, the research study recommends that organizations should enhance their
employee’s productivity by appraising employee’s performance. Theorganization should then utilized accomplishments,
targets, time management, organizational goals and efficiency for measuring performance purposes and evaluation
process as it will help increase employee’s productivity.
From the research findings, the research study propose that organizations should develop and implement
performance appraisal methods that would facilitate effective appraisal of the employees and hence providing
opportunities to the organization in classifying performance targets, enhance employees performance, finding staff
training needs and assisting employees on time management through proper planning and setting of deadlines. From the
research results, the research study propose that companies should implement behavioural performance evaluation
scheme and management by objectives as the appraisal methods were initiated to be statistically important in swaying
employees relationship and enhancing employees productivity.
6. References
i. Anso, H.S. (2014). The Impact of Performance Appraisal on Employee Performance. A Case Study of First Bank of
Nigeria Plc. Master’s Thesis of University of East London
ii. Armstrong, M. (2006). Performance Management: Key Strategies and Practical Guidelines, London: Kogan and
Page.
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on Their Work Outcomes. International Journal of Management and Commerce Innovations 2(1), 136-173.
v. De Waal, M. P. (2004). The big five personality dimensions and job performance: A meta-analysis. Journal of
Personnel Psychology, 17(1), 3- 32.
vi. Elisha O. Odhiamba (2015). The Effect Of Performance Management Practices On Employee Productivity: A Case
Study Of Schindler Limited. Retrieved http://erepo.usiu.ac.ke
vii. Hartzell, D. (2006). Dictionary of Management. New Delhi: Academic Publishers.
viii. McNamara, C. (2003). Field Guide to Leadership and Supervision for Non-profit Staff. Amazon: McGraw-Hill
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ix. McNamara, C. (2000). Performance measurement and management: Some insights from practice. Australian
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xi. Mwema, N. W. & Gachunga, H. G. (2014). The influence of performance appraisal on employee productivity in
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xii. Africa. International Journal of Social Sciences and Entrepreneurship, 1 (11), 324-337.
... Empowerment is the cooperation of workers in association matters and more importantly in the necessary leadership processes. Empowerment is enabling workers to carry out activities for imaginative practice without other people (Ibrahim & Daniel 2019). ...
... These results prove that the compensation given to employees has positive influence on performance of supermarket employees in Batam. These findings are consistent with research from Alfiyah and Riyanto (2019) Girma et al., (2016), Siddiqi and Tangem (2018), Hayat et al., (2019), Ibrahim and Daniel (2019). ...
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Field Guide to Leadership and Supervision for Non-profit Staff
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