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EVALUATION OF PERFORMANCE APPRAISAL IN PRIVATE SECTOR MANUFACTURING COMPANY (A CASE STUDY OF JUHEL AND HADIS & DROMEDAS NIGERIA LIMITED)

CHAPTER ONE

INTRODUCTION

1.1            BACKGROUND OF THE STUDY

Appraising performance is very important and necessary in all aspects of life.  For any type of endeavour that one ventures into, one tries to appraise one’s activities in one way or the other.  In fact, it is imperative for progress to be accessed.  Take for instance a businessman, the amount of profit he takes is the measurement of performance.  The church on the hand, appraise itself by the rise and fall in the number of its congregation.  For the farmer, how well he had done is measured by the yield of his crops.  Also, in schools, students performances are evaluated through their tests or examination scares.  Even the government as a body assesses it performance through the budget.  During any budget speech, the president recalls on the precious year’s activities in terms of successes and failures.  For civil servants also, performance rating is carried out from time to time.

Recently, management of organizations are placing increased emphasis upon the need to develop and put into greater use of the knowledge skills and expertise of their workers at all levels.  As a result of this, the accountability for improving both the current performance and career potential of subordinates is assuming greater significance in the practice of management if the organization are to function well with formally defined roles and replaceable personnel, information must be available about the performance abilities and weakness of it measures.

In this turbulent working environment of ours therefore, the need for an understanding of performance appraisal sounds very obvious and unquestionable.

The forgoing observation is predicated upon the fact that some individuals perceive performance appraisal as an annual ritual having less meaning to them and the organization hence little or no importance is attached to the program.  Yet appraisals are certainly no joking matter to the managers and superiors who receive them if its importance is anything to go b erformance appraisal is the analysis of the employees past successes and failure and the assessment of their suitability for promotion or further training.  Appraisal of individual performance is also a fundamental human act.  Before the emergence of the great bureaucracies, which is predominant today, men watch one another, appraising each other’s behaviour in accordance with the interpretation of what they saw.

The performance appraisal process is provides an opportunity to fix the employees attention on the things that really matter.  If employees are informed of the organization’s goals and how their jobs fit these objectives, they have the ability to determine for themselves what is important and to set priorities among tasks of differing value to the overall organizational effort.

 By appraising individual’s performance areas of relative strengths can be identified and reinforced, while areas of shortcomings can be communicated to be reappraised and be encouraged to redirect their work habits in a manner that is conducive to better performance growth.  The aspect of any performance appraisal system involves its use as a basic for promoting or rewarding higher performance or far weeding out marginal or low performers.

 In many organizations, performance approach is viewed and conducted solely in terms of evaluative aspect thereby overlooking its use for facilitating growth and development in employees though training, coaching, counseling and feedback of appraisal information.  In others, it is even accorded a lesser role.

Performance appraisal system in some organizations have be characterized with non disclosure of appraisal results to the employees.  This apparent secrecy over performance appraisal result have to be in mind of supervisors and managers and potential tool for craking town at immediate subordinate with impunity.  Consequently, the proponents of the open reporting systems of appraisal have argued that the open appraisal system is desirable in order to protect the subordinate against the prejudices of their superiors that cannot be supported by facts.

Apart from the safe guarding against irrational and biased evaluation, the feedback of the performance rating results to the employees through open appraisal system has a motivational impact.  Without the feedback system, the formal appraisal technique might not be able to effectively enhance improvement in individual performance.

So performance appraisal in unavoidable for progress to be measured correctly and rewards appropriated rightfully.  The appraisal of workers in private sector is also very essential.

 1.2            STATEMENT OF THE PROBLEM

Since appraisal or evaluation is necessary for assessment, it is assumed that the private sector companies must be evaluating their employees.

A critical look at most organizations revealed that the most despised and avoided of all management tasks is that of performance appraisal.  In most organizations, performance appraisal is an animal ritual in which the manager evaluate the subordinates performance and the evaluation is used to determine how much of merit increase the subordinate will receive.  The manage is concerned that subsequent interaction de-motivating and that subsequent interaction with the subordinate will be difficult.  The subordinate knows that valued organizational rewards are riding on the outcome of the appraisal and trends to focus on the bottom line rather than the reason behind the bottom line.  This ritual has little to do with a manager’s primary responsibility to coach the counsel subordinate with a view to develop both their present and future potentials.

All organizations carryout some form of appraisal.  Those without formal schemes carry out informal ad hoc evaluations of their employees’ performance.  Every time there is a promotion or a need to redeploy someone, managers have to make judgments about how well people have performed.  The problem with this informal assessment is that they are usually secretive, based on insufficient information, open to bias and can be inaccurate.  Most importance of all is the fact that the employee is not a part of the process.  Informal assessment any objective criteria or guidelines on which to judge, performance will not be far.

 Experience have also shown that a lot of managers do not see the need to assess and evaluate regularly and accurately the performance of their employees in order to make them strive for poor pay, redundancy, unemployment, high labour turn-over and ineffectiveness of employees in discharging the duties.

Appraisal exercise is still a difficult approach to be put into a successful practice by various organizations while many organizations give lip service to this approach, a few of them have taken the advantage of the systematic/appropriate approach.

A systematic performance appraisal will enhance development provided the individual being evaluated is informed about how he is progressing and the areas where improvement could be made.

So, the problem of this study is to find out to what extent Juhel. Nigerialimited and Hades & Dromedas companies appraise their employees and the method they adopt.  Also the study is carried out to ascertain how far the companies have adopted the new reporting system.

 1.3            PURPOSE OF THE STUDY

The objectives of this study are:-

(a)   To investigate to what extent Juhel, Hardes & Dromedas companies appraise their employees.

(b)  To discover the types of reporting system being used by these companies.

(c) To determine how efficient the method they are using is.

(d) To find out the objective assessment of employees performance and equity in recording employees.

 1.4      SCOPE OF THE STUDY

In carrying out this research, two firms were selected for study.  Juhel and Hardes and Dromedas Nigeria Ltd.  The two firms are located inEnugu.

 1.5     LIMITATION OF THE STUDY

This study on performance appraisal in the private sector covered two categories of manufacturing industries withinEnuguState.  There categories are being drug based industries and antiseptic manufacturing industry.

 This project focuses on the staff of Juhel Nigeria Ltd and Hadis and Dromedas Nig Ltd.  It covered both senior, junior and management staff of the organizations.

 1.6    RESEARCH QUESTIONS/HYPOTHESIS

(a)  To what extent is the method being used by private sector companies an efficient method of appraisal?

(b)   Based on the determination of such, what problems are passed by time particular method?

(c)  How is the private sector coping with these problems?

(d)  Do the performance appraisal system in private sector in any way contribute to the employees development?

(e) Do performance appraisal system have any direct relationship in boosting employees morale and career development.

 1.7    RESEARCH HYPOTHESIS

Following the research question and research objectives, the formulated are as follows:

H0:    Juhel, Hadis & Dromedas companies do not pay attention to performance appraisal.

Hi:     Juhel, Hadis & Dromedas companies pay attention to performance appraisal.

H0:    Employees in the Juhel/Hadis companies do not pay attention to open reporting system compare to confidential reporting system.

Hi:     Employees in the Juhel/Hadis companies pay more attention to open reporting system.

H0:    Juhel/Hadis companies that adopt the confidential reporting system do not make it completely confidential.

Hi:     Juhel/Hadis companies that adopt the confidential reporting system make it completely confidential.

 1.8  NEED FOR THE STUDY

The need for this study lies in the fact that the type of appraisal used by private sector companies will be discovered.  Also companies that do not appraise their employees at all will be exposed to such an idea.

Moreover, since it is a known fact that most private sector companies performance better than the public companies, how far the appraisal method used relate to their performance will be known by the general public.

 The study besides serving as an interest to private sector companies on what the private sector companies to in achieving their goals especially profit wise.  Also to student that wants to carry out further research.

 1.9   DEFINITION OF TERMS

Appraisal -     This is the quantity and quality of work accomplished by an individual, group or organization. 

Appraisa -   This refers to the superior officer who appraises

the subordinate during the performance evaluation exercise.

Appraisal   -        This is the employee being evaluated. 

Performance  -        This refers to the execution of action and

fulfillment of aims which is measurable by a standard the productivity and the organizational maintenance of goals or status quo, the extent to which the workers role contribute to the achievement of organization goal. 

Attitude                -        This is individual responses evolved by particular

stimuli, tend to fall into relatively stable and consistent patterns, which may conveniently be described as attitudes.

Feedback -        A controllable system may be regulated (i.e it output may be brought to any desired value) by the provision of an adjustment to the input. 

Subordinate    -        This shall refers to an employee who is lower in

rank or position to an superior in an organization.  In other works he is a junior employee to his senior. 

Motivation   -        This refers to the way urges, aspirations, drives

and needs of human being direct or control or explain their behaviour.  It may be keeners for a particular pattern of behaviour. 

Private enterprise -        These are business units that are owned and

managed by private individuals.  These forms of business cannot said to belong to private sector.  1

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