ABSTRACT

The aim of the study was to establish the effect of performance appraisal on employee motivation at the Ministry of East Africa Community, Labour and Social Protection. The research study adopted a descriptive research design in form of a survey and a sample size of one hundred and twenty (120) respondents drawn from all the departments in the Ministry ranging from different job groups which included the senior management (Job Group P and Above),  middle level management (job group J to N) and lower level employees (job group A to H). Stratified random sampling was used as all the respondents were drawn from different levels or strata within the Ministry. Structured questionnaires developed in form of a five point likert scale was used for data collection as they were easy to administer and cheap in terms of cost and time. Data was collected and analyzed by use of scientific package for social sciences (SPSS). A regression model was used to determine the co-efficients of the effect of performance appraisal on employee motivation.  The study shows that there is a strong positive significant correlation between performance appraisal and employee motivation and it can concluded that performance appraisal system has a significant impact on the employee motivation at the Ministry of Labour, East Africa Community and Social Protection. The conclusion of the findings was that the Ministry uses performance appraisal to motivate employees though there is need for a comprehensive policy to link pay to performance. The recommends that effective feedback and communication; giving training opportunities to employees to acquire skills; and encouraging employees’ participation in performance appraisal processes are all essential for effective performance appraisal process in an organization.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Performance Appraisal System (PAS) is amongst the great paradoxes in effective management of Human Resource (HR) in many organizations and its main purpose is to improve efficiency and effectiveness in job performance. Performance appraisal as a system has been in existence for a few decades. Formally, evaluation of employees is believed to have been adopted in the eighteenth (18th) century and it involves assessing performance in relationship to the laid down rules, procedures and objectives of the job (Fletcher, 2004). According to Guest (2001) the outcomes of effectual performance appraisal are improved accurateness of performance of an employee and relating it to task performance and obvious likelihood of rewards. Miller (2007) states that there are many outcomes that can be attained from having performance appraisal program which include continuous open communication, improved employee morale, job satisfaction, reduced employee turnover, increased employee commitment, increased motivation for both individuals and teams, feeling of equity among employees, and linkage  between performance and rewards.

The research is grounded on two theories which include Goal Setting Theory by Lotham and Locke (1979) and Expectancy Theory by Vroom (1964). Goal setting theory by Latham and Locke (1979) states the importance of employees’ motivation through setting of   targets and is widely recognized as a technique to improve performance. It emphasizes the need to agree and set targets which will act as standard of performance measurement.  Expectancy Theory by Vroom (1964) advocates motivation as a function of personal effort to achieve high performance.

The performance level achieved will lead to a reward, and this provides the basic feedback about ones strengths and weaknesses which is inevitable for formulating succession plans. According to Expectancy Theory the perception of high performance is achieved where certain reward equally proportional is expected.

The study was conducted in Kenya Civil Service because the functioning of the Government depends upon how people work. Within the public sector, an improvement in effectiveness and efficiency of civil service is central to the government’s strategy of maintaining and improving national prosperity. Performance appraisal methods including the use of targets, performance measures and personal development are widely used within many areas of the public sector (Government of Kenya, 2005). Economic Recovery Strategy (2003) published by Kenya Government setting out a ten year transformational was to be measured by better results. The civil service has embraced the promise of performance contracting and appraisal as a means to improve performance, spur innovations such as balanced scored card.

1.1.1    Performance Appraisal

Performance appraisal is a performance measurement toolkit which is used to get performance information of an individual and compares them with the already set standards (Beardwell and Thompson, 2014). DeNisi (2000) indicates performance appraisal as an organization’s system in which employees are given scores to show their performance against their set targets to bring change in job performance. Fletcher (2001) looks at performance appraisal largely as to mean those activities by which employees are assessed in an organization in order to grow their competence, raise their performance and give rewards. Aquinas (2008) states that performance appraisal as a mechanism assesses the employees’ contribution in all levels of the organization during a certain performance period of time and they are able to know their performance strengths and weaknesses.

Performance appraisal also measures employees’ performance and growth on a specific job and their prospective for future development (Gupta, 2008).  Due to rapid growth and changes in today’s organizations to suit the dynamic political, social and economic environments in which they thrive, there is need for employees to align their objectives with those of the organization (Dessler, 2003). Performance appraisal is annual exercise conducted by organizations in order to determine an employee’s overall contribution to the organization’s performance. This appraisal of performance is done using aspects such as time management at work, quality of work done, quantity produced and cost incurred to produce results or any other credible and mutually agreed standard or measure (Invancevich, 2003).  Mutsuddi (2012) shows performance appraisal as a system that is structured and formal and is used to assess the present performance of an employee and come up with ways in which they can improve in future so that the employee as well as the organization can mutually benefit. He also points out that performance appraisal assesses the performance of employees and then give feedback about past performance, present performance and future performance expectations. Performance appraisal answers many questions concerning job; and by coming up with solutions and a path to be followed; poor performances can sometimes be improved.

Prasad (2005) describes performance appraisal as the process of assessing the performance of the employee on their job putting into consideration what the job entails, and is based on the confluence of agreed objectives, knowledge, expertise and competency, performance improvements and strategies for personal development of performers. Performance appraisal contributes to the development of performance culture in an organization by signifying the importance of high performance. Mahapatro (2010) states that performance appraisal helps decision making concerning retention in employment, job promotion, job transfer, payment of bonuses, and pay rises, and enhance communication at all levels of employees. Yoder (2003) states that performance appraisal as a communication tool shows skills, knowledge and attitude needed for various jobs. Using appraisal the organization can know the attitudes and behaviours that they want their employees to have at their different levels of work.

Rao (1985) opines that a properly designed performance appraisal system is critical as it helps employees in understanding their strong and weak areas, regarding their roles and responsibilities in the organization. Particularly, setting out personal goals aligning them with organization objectives has been embraced in most of organizations. According to Mullins (2010) performance appraisal is a process applied in businesses to assess characters and contributions of employees in their teams. He argues that appraisal of performance serves two purposes; evaluative purpose and developmental purpose. Williams (1998) describes performance

appraisal as a systematic evaluation of the staff by their supervisor in terms of the job performance as prescribed by the job description, specification and working environment and it is usually carried against agreed criteria or conditions of evaluation.

1.1.2     Employee Motivation

Motivation is a basic psychological process and it is a power that gives energy, direction and upholds behaviour (Luthans, 2011). Motivation can be referred broadly as individuals’ goals, ways of choosing their goals and individuals trying to change their behaviour to suit those goals, and is concerns strength and direction of behaviour and aspects influencing employees to act or behave in particular manner (Armstrong, 2012). He argues that there is motivation in employees when they anticipate that their actions will lead to them attaining their goals and hence a valued reward to satisfy needs and wants. High performance is achieved when employees are highly motivated and have a personal choice to make unrestricted effort. Locke & Lotham (2004) refer to factors within an employee that lead to acting in a certain way and to factors from without that can entice one to act, as motivation. They point out that employee behaviour is directly influenced by leadership and management of the organization as it depends on how they will direct it towards given organizational goals.

According to Newstrom (2011) motivation is the result of a set of internal and external forces that cause an employee to choose suitable course of action and hold on certain behaviours. These behaviours will in turn be focused at achieving organizational goals. Motivation also requires learning and understanding employee drives and needs, since its origin is from within an individual. Chartered Management Institute (2005) states that motivation is the formation of incentives, stimuli and working environment that enable people to perform to the best of their ability. The spirit of motivation is to provide employees with what they really desire most from

their job.

1.1.3     Kenyan Civil Service

The Kenyan Government introduced performance appraisal in the civil service as a way of ensuring that service delivery improved. When it began way back around 2004, only a few number of State Corporations participated but now performance appraisal is being put into practice in most of the Ministries, Departments and Agencies (MDAs). The benefits of performance appraisal encouraged the decision for it to cover all MDAs due to improved administrative decisions, financial performance and improved service delivery. To ensure its success, Ministries had to work towards set targets, come up with service charters and compare their performances with other best performances worldwide. The results of the efforts were considerable that Ministries won international recognition in several African countries that were willing to learn from the practice in Kenyan Government (GoK, 2010).

In Kenya, performance appraisal is freely negotiated between the supervisor and the employee as is the case of performance contacting where the government and different ministries freely negotiate on the targets to be achieved. Performance appraisal process is started after performance contracting is done where agreements between Government and different ministries, departments and agencies specify the objectives, obligations and responsibilities of the two parties involved. The contract stipulates the expected results to be attained by the contracted party and the commitment of the Government as the contracting party. In this case the Government owns and manages the contracted party. All this is done to enable the Government to gain and be able to deliver its mandate to the citizens. Performance contacting is also used to organize and define tasks to be performed by management and also ensuring that they are achievable. It also helps in coming up with what is to be done and how to do it. The outcomes that are expected after introduction of the performance contracting include improvement of services delivered; enhanced effectiveness and efficiency; and uptake of a performance oriented culture in the civil service; measured performance; and connecting performance, sanctions and rewards (GoK, 2012).

1.2 Research Problem

For an employee to have motivation to perform, to develop personal capabilities, and improve their future performance this is influenced by continuous feedback on their performance (Invancevich, 2008). People are motivated when they expect a certain course of action will likely lead to attainment of a goal and thus a valued reward – one that satisfies their needs and wants (Armstrong, 2009). Only when employees are motivated towards appropriate goals that there is likelihood or organizational success is enhanced. Since productivity is influenced by employee motivation level, organizations and particularly their line managers have to realize what inspires employees to reach the highest level of their performance (Beardwell and Claydon, 2007). Organizations with best systems of performance appraisal usually show higher growth, higher return per employee, less attrition rate and stable platform for new challenges (Debemitra, 2008). Aquinis and Kraiger (2009) argue that implementation of a well-designed performance appraisal system can strength an organization in several ways such as employee retention, commitment, increase in employee self efficacy and competitiveness hence increased satisfaction (in areas of recognition and experiencing growth).

 

Performance appraisal acts an important factor of the function of overall human resource management in the State Corporations, ministries and County Governments.

On the whole performance appraisal process is supposed to manage and improve performance of the Civil Service and County Governments by enabling participation of staff where you involve them in planning, delivery and assessment of job performance (Government of Kenya, 2007). The Government through public service commission has set performance appraisal guidelines as part of performance contracting and results based management. The Kenyan government acknowledges that for many years there has been poor performance in the civil service. (GOK,2008).  The civil service is faced with the challenge of poor and deteriorating performance, which acts as a stumbling block to realization of sustainable economic growth. The civil service has consistently performed below expectations due to: poor management and leadership; funds and human resource mismanagement; excess staff; work duplication; poor staff performance; government bureaucracy and excess political interference. This leads to weak economies, poor services; poor and weak infrastructures amongst other economic problems like brain drain (GOK, 2007).

 

Several studies have been done in relation to the effect of performance appraisal on employee motivation. Chaponda (2014) conducted a case study on the effect of performance appraisal on employee motivation in Slum based Non-governmental Organization situated in Nairobi. The study established that performance appraisal is important in employee motivation and has helped improve job performance since it identifies performance appraisal problems and how to improve employee productivity and motivation. Njeru (2013) conducted a descriptive research study on the role of performance appraisal on performance of job in the public sector at Kirinyaga Central District. The study established that majority of civil servants set goals and attains them while a few received feedback on their performance. Kamiti (2014) did a descriptive study on the effect of performance appraisal on civil servants at Directorate of Tourism. The study revealed that performance appraisal acts as important factor that contributes to the employees’ motivation. The more transparent and objective performance appraisal is in the government offices, the higher would be the motivation of employees.

 

Many of these studies that have been done on the effect of performance appraisal on employee motivation within civil service have failed to explain how performance appraisal affects employee motivation in the civil service. This study therefore aims at bridging the existing knowledge gaps by endeavouring to provide an answer to the question; what is the effect of performance appraisal on employee motivation at the Umunneochi LGA?

 

1.3 Research Objective

To establish the effect of performance appraisal on employee motivation at Umunneochi LGA.

1.4 Value of the Study

Scholars and Academicians will find the research useful because it will contribute to knowledge and also identify the gap that the study might have left and stimulate further research on performance appraisal and employee motivation.  The study will also help future academic researchers’ who are aspiring to conduct a performance appraisal study in government through using the findings and recommendation as a reference in adding value to the field of human resource management.  Policy makers and practitioners will benefit from the study as it will help them in generating new performance guidelines and also in successful implementation of performance appraisal. State corporations will find the study useful since it will provide an insight to challenges faced by employees in analyzing their goals and organizational policies related to performance management. The management of different Government Ministries, Departments and County Governments will benefit from the study since it will help them make informed decisions with regard to performance appraisal and how to motivate employees who perform better. The study will also benefit human resource practice in the sense that the findings will improve the knowledge on the construct. The human resource practitioners will also use the findings for development of employees’ capacity to meet and surpass expected performance and to achieve their full potential for their benefit and the organizations they work for.

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