THE IMPACT OF EFFECTIVE APPRAISAL ON EMPLOYEES’ PRODUCTIVITY
(A CASE STUDY OF NIGERIAN BOTTLING COMPANY)
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In every business organization including Nigerian Bottling Company, the performance of the employees is important in achieving organizational goals.
Performance appraisal is one of the basic tools that make workers to be very effective and active at work. A critical look out on this may bring about the need for motivation, allowances, development, training and good human relationship in an organization.
Performance appraisal is defined as a structural formal interview between subordinate and supervisor, that usually takes the form of periodic interview (annually or semi-annually), in which the work performance of the subordinate is examined and discussed, with the view of identifying the weaknesses as strengths as well as opportunities for improvement and development.
The essence of performance for most organizations is delivering products and services that meet or exceed customer expectations, thereby creating a competitive advantage so that customers are retained and market share is increased (Sasson, Alvero & Austin, 2006). Another view is that a performing business is one that maximizes shareholder value, thus maximizing the difference between input costs and revenue (Copeland, 1994). This is often a controversial statement since organizations in Europe and Japan expect a balance between all the stakeholders (Copeland, 1994:97), and is supported by the view of Neely, Adams and Kennerley (2002) as part of their Performance Prism which includes all the stakeholders and not only the shareholders.
The output of every organization depends on how well and how much the performance of the employee is appraised and evaluated.
Productivity can therefore be defined as “quality or volume of the major product or services that an organization provides”. In short, productivity is what comes out of production. Managers of every business organization are charged with the responsibility to motivate their employees to achieve organizational goals.
Without a good product to sell, problems in an organization are bound to rise.
It is a structural formal interview between subordinate and superior that usually takes the form of periodic interview (annually or semi-annually) in which the work performance of the subordinate is examined and discussed, with the view to identifying the weakness and strength as well as opportunity for skills and development (Decenzo and Robbins, 1995: 358).
Performance refers to the degree of accomplishment of the task that makes an employee’s job. It reflects how well employee is fulfilling the requirement of the job.
1.2 STATEMENT OF THE PROBLEM
In Nigeria most of the performance appraisal exercise/program is not well managed. Management of organization tends to view it as a punitive measure. This makes it lose its objectives and goals. Performance appraisal no longer seek to actualize its objective of correcting deviations, hence increasing productivity and jettison all hindrances that tends to hinder productivity. But it is being used as a tool for subordination oppression, victimization and exploitation.
Most organizations in the competitive market fail since their workers perform below standard for they are not encouraged to work harder. Managers and employees are the life blood of every business organization. If management does not invest much into the welfare of their workers, problems are bound to rise leading to industrial strike actions, low commitment to work, low morale and low productivity of goods and services.
Attractive appraisal systems are established by some business organizations to help motivate their employees to strike hard to be recognized and rewarded. Once employees are motivated, their performance reflects on productivity. Employees strive hard by pooling together skills, knowledge and efforts to achieve maximum output. Hence the essence of this paper is to find out the part played by performance appraisal.
1.3 OBJECTIVES OF THE STUDY
The aims of this study are;
1. Investigate the effectiveness of performance appraisal technique in an organization.
2. Examine the usefulness of performance appraisal programme
3. To examine the ways in which performance appraisal has impacted employees performance
4. To examine the relationship between performance appraisal and employees’ productivity
5. To help managers review past performance and improve current performance.
1.4 RESEARCH QUESTION
1. Does performance appraisal have positive impact on employees’ performance?
2. How often are employees appraised at the work place?
3. Is performance appraisal an ongoing process in the company?
4. Is feedback information received after performance appraisal?
5. Is performance appraisal helpful in identifying strengths and weaknesses?
1.5 RESEARCH HYPOTHESES
HYPOTHESIS I
Ho: Performance appraisal does not have impact on employees’ performance.
Hi: Performance appraisal has impact on employees’ performance.
HYPOTHESIS II
Ho: There is no significant relationship between performance appraisal and workers’ productivity.
Hi: There is a significant relationship between performance appraisal and workers’ productivity.
1.6 SIGNIFICANCE OF THE STUDY
The findings of the study will not only be beneficial to the personnel of the chosen organization for the study, which is Nigerian Bottling Company Plc, Benin City, but also to every individual. It will also help managers in other organizations in setting goals and targets for employees to achieve through proper supervisory control by line managers.
Aid in identifying and improving the training and development needs of workers.
Assist in motivating employees who contribute effectively to the attainment of organizational goals and objectives.
Help managers to know how to appraise the performance of their workers.
1.7 SCOPE OF THE STUDY
This research work is limited the impact of performance appraisal on workers performance and in turn leading to organizational performance and productivity, using Nigerian Bottling Company Plc, Benin City. This therefore means that the study area in which data were obtained is Nigerian Bottling Company Plc, Benin City.
1.8 LIMITATION OF THE STUDY
There is no gain saying that there are no limitations in research work generally. Any shortcoming that arises in this study is as a result of factors which are beyond the researcher’s control.
Therefore, it will be of more importance to highlight certain militating factors that tend to narrow or limit my scope of study. This project research would have been easier if not for these limitating factors:
1. Time factor: time was not on the researchers to consult various sectors of the economy to review employees or given out questionnaire to various institutions on the effect of government revenue policies.
As we all know, time is never our friend. The time scheduled for the completion of this research thesis was too short. As a result, generating information/data was strenuous as it coincides with final year examination period, which needed attention.
2. Finance: this is another barrier that limited the researcher’s work.
1.9 DEFINITION OF TERMS
Appraisal: A formal assessment, typically in an interview, of the performance of an employee over a particular period.
Human recourses: These are human beings used in the production process. They could still be called employees or provide of labour.
Compensation: This is the reward or payment gain to the provider of labour. A labourer disserves his wages. Compensation could also be retired to as remuneration.
Separation: This is a process whereby an employee is returned to the wider society from where he was taken from, probably as a result of old age, non-performance or misconduct
Job evaluation: This is the systematic method of appraising the work of each job in relation to other jobs in the organization.
Equity: A stock or any other security representing an ownership interest. On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses). Also referred to as "shareholders' equity".
Effectiveness: Effectiveness is the capability of producing a desired result. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression.
Efficiency: A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Efficiency relates to the use of all inputs in producing any given output, including personal time and energy.
Employee: These are workers employed to perform jobs in an organization under an obligation, which they expect income as exchange for effort contribution to the growth of the organization.
Employers: They are the employer of labour, who might therefore be said the controller of the activities of the establishment.
Exploitation: The process of being able to use a company’s natural resources such as adverts, covering of event, publicity of event for the attainment of profit maximization.
Management: Is the effectiveness and optimum used of human and material resources to achieve a goal.
Responsibility: Is a person who is reliable and able to carryout various duties imposed on him/her by the establishment.
Strength: These are factors in the environment that place the organization at a advantages over its competitors
Selection: Is the process of identifying the most suitable applicant and persuades him/her for employment.
Training: Training is the acquisition of knowledge, skills, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies. Training has specific goals of improving one's capability, capacity, productivity and performance.
Weakness: This is the low level of performance in an establishment which hinders its growth.
Evaluation: Evaluation is a systematic determination of a subject's merit, worth and significance, using criteria governed by a set of standards. It can assist an organization, program, project or any other intervention or initiative to assess any aim, realizable concept/proposal, or any alternative, to help in decision-making; or to ascertain the degree of achievement or value in regard to the aim and objectives and results of any such action that has been completed. The primary purpose of evaluation, in addition to gaining insight into prior or existing initiatives, is to enable reflection and assist in the identification of future change.
1.10 HISTORICAL PROFILE OF NIGERIAN BOTTLING COMPANY (NBC)
The Nigerian Bottling Company Ltd is one of the biggest companies in the non-alcoholic beverage industry in the country and is the sole franchise bottler of The Coca-Cola Company in Nigeria.
The company serves approximately 160 million people by producing and distributing a unique portfolio of quality brands, bringing passion to marketplace implementation, and demonstrating leadership in corporate social responsibility.
NBC Ltd started operations in Nigeria in 1951. Based in the city of Lagos, they operate 13 bottling plants across the country. In addition, they channel products through 59 warehouses and distribution centers.
The company employs about 4,800 people and indirectly supports the jobs of up to more than a million more in our value chain.
The company aims to be our customers’ most preferred supplier, and conduct programmes to support more than 450,000 customers who sell our products to consumers.
The company is part of the Coca-Cola Hellenic Group, one of the largest bottlers of the Coca-Cola Company’s products in the world, and the biggest in Europe. Coca-Cola Hellenic operations span 28 countries, serving more than 570 million people. The company is headquartered in Athens and listed on the Athens, New York, and London stock exchanges.
The company produces, sells and distributes a wide range of beverages, most of which are trademark products of the Coca-Cola Company. The company product’s portfolio consists of:
• Leading brands Coca-Cola, Coca-Cola light, Fanta and Sprite
• Local brands such as Schweppes, Five Alive, Limca and Eva
The company continuously reviews opportunities to expand our product portfolio in order to offer consumers in Nigeria an increasing range of choices. Every measure is taken to ensure that The company’s products are of the highest quality.
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