A PROJECT PROPOSAL ON

THE EFFECT OF PERFORMANCE APPRAISAL ON EMPLOYEE

FUTURE PERFORMENCE

(A STUDY OF FIRSTBANK NIGERIA)

BY

Olowu, Naimat Omobolanle

Matric No:

COURSE

BUSINESS RESEARCH METHODS

(BUS 804)

1.1 INTRODUCTION
Every organization performs its task with the help of resources as men, machine,
materials and money. Except manpower (employee) other resources are non-living
but manpower (employee) is a live and generating resource. Manpower utilizes
other resources and gives output. If manpower is not available then other resources
are useless and cannot produce anything. Out of all the factors of production
manpower has the highest priority and is the most significant factor of production
and plays a pivotal role in areas of productivity and quality.

It should also be noted that lack of attention to the other factors that are non-living
may result in reduction of profitability to some extent. But ignoring the employees
can prove to be disastrous. Performance appraisal is the process of obtaining,
analysing and recording information about the relative worth of an employee to the
organization.

Performance appraisal is an analysis of an employee's recent successes and

failures, personal strengths and weaknesses, and suitability for promotion or
further training. It is also the judgment of an employee’s performance in a job
based on considerations other than productivity alone. Performance' appraisal is a
formal structured system of measuring and evaluating an employee’s job related
behaviours and outcomes to discover how and why the employee is presently
performing on the job and how the employee can perform more effectively in the
future so that the employee organization and society all benefit.

Performance Appraisal has been considered as the most significant an

indispensable tool for an organization, for an organization, for the information it
provides is highly useful in making decisions regarding various personnel aspects
such as promotion and merit increases. Performance measures also link
information gathering and decision making processes which provide a basis for
judging the effectiveness of personnel sub-divisions such as recruiting, selection,
training and compensation.

1.2 STATEMENT OF THE PROBLEM

It is just high time for the organizations to be subjected to the rigors and
benefits of performance appraisal.There has been a general opinion that corporate
bodies have not been living up to expectations as regard appraising the
performance of employees most especially in the Nigerian context.

A lot of companies see performance appraisal as a financial burden. Simply

because there has not been clearly established the effect of performamce appraisal
on employee's future performance in form of productivity and commitment and
other benefits accruable from the adoption of performance appraisal techniques by
organizations particularly within the Nigerian context. It is this gap in literature
that constitute the problem of study in this research.
The essential element of an organisation is performance appraisal and thus,
performance appraisal systems are expected to heavily influence the future
performance of employees. The main thrust of this research is to investigate the
extent and effect of this influence with special focus on Abeokuta branch of
Firstbank Nigeria Plc.
1.3 PURPOSE AND OBJECTIVE OF THE STUDY

The objectives of this study will be to determine the following;

1. To ascertain the relationship that exists between performance appraisal and

employee's commitment to FirstBank.
2. To determine if performance appraisal influences employee's productivity in
FirstBank.
 3. To determine if improved performance appraisal will lead to improved
employees' performance in FirstBank.

1.4 RESEARCH QUESTIONS

In the light of the problem under consideration, the following research questions
will guide the researcher in this study:

1. Is there any significant relationship between performance appraisal and

employee's commitment to FirstBank?
2. Does performance appraisal influences employee's productivity in
FirstBank?
3. Does improved performance appraisal lead to improved employees'
performance in FirstBank?

1.5 RESEARCH HYPOTHESIS

The research questions will be answered based on the following hypothetical

statements.

Hypothesis 1

H1: There is no significant relationship between performance appraisal and

employee's commitment to FirstBank

Hypothesis 2

H2: Performance appraisal does not influence employee's productivity in

FirstBank.

Hypothesis 3
H3: lmproved performance appraisal does not lead to improved employees'
performance in FirstBank.

1.6 SIGNIFICANCE OF THE STUDY

For directors, managers and executive officers in business organizations, the study
helped discover the true essence of performance appraisal, its working principles
and how it can be used to improve employee's future performance both on short
and long term basis.

This study will offer solutions to ones raised issues about performance
appraisal and it is my believe that the result of these finding will go a long
way inhelping researchers in this area of study, it will also enhance the
understanding of the structure of performance appraisal and its analysis by the
users.

1.7 SCOPE AND LIMITATION OF STUDY

This study will be limited to the examination of howperformance appraisal affect

employee's future performance with consideration given to the Banking industry
and specifically FirstBank of Nigeria Plc.

This research work like any other researches encountered various challenges. The
limitations of this study are as explained below.
i. Financial constraints: This is the one of the major problems in conducting a
research work. The research work would require articles, journals and other
relevant materials on the subject-matter which may not be adequately available due
to shortage of finance in getting the relevant materials on the internet, as well as
subscribing for needed journals and articles.
ii. Inadequate response: Another constraint envisaged is the lack of corporation
from the respondents. Some respondents may provide incorrect response so in
attempt to keep organizations’ secret while others may feel that the researcher was
attempting to pry on their secrets. Some may refuse to fill or return questionnaires.

1.8 HISTORICAL BACKGROUND OF FIRSTBANK

First Bank of Nigeria PLC is one of the oldest institutions in Nigeria, and was the
first bank to be established in West Africa. The bank was incorporated as a limited
liability company in March 1894, and commenced operations the same year as the
Bank for British West Africa (BBWA).

In its early years, the bank worked closely with the colonial government of British
West Africa by performing the traditional function of a colonial Bank in the West
African Sub-region. Consequently, the bank recorded an impressive growth by
opening its first branch office in Accra, Ghana in 1896 and a second branch in
Freetown, Sierra Leone two years later (1898). This marked the beginning of its
international banking operations.

In 2002, the bank established a subsidiary in the United Kingdom named First
Bank UK Limited, regulated by Financial Services Authorities (FSA). In this
respect, the bank is the first bank to own a banking subsidiary in the United
Kingdom. It also has a representative office in South Africa. Today, First Bank of
Nigeria Plc has diversified into a wide range of banking activities which include
commercial merchants and internet banking.

1.9 OPERATIONAL DEFINITION OF TERMS

Performance Appraisal:Performance Appraisal is the systematic, periodic and
impartial rating of an employee's excellence, in matters pertaining to his present
job and his potential for a better job.

Performance:The actual output of results of an organization as a measure against

its intended outputs or goals and objectives.

Employee Commitment: This is the sacrifices made by the employee and

employer to maintain a relationship.

Productivity: A measure of the efficacy of a person, machine, factory, system etc.

in converting inputs into useful output.

FirstBank: This is the organisation to be used as case study.

2.0 REVIEW OF RELEVANT LITERATURES

This segment of the study will be devoted to the review of some available
literatures on performance appraisal and employee's performance. Since the advent
of the industrial revolution, discussions of business have been the concern of
researchers, practitioners and policy makers. Performance appraisal as a concept
has received the attention of different authors who described it in different ways.
This chapter reviews literatures relevant to the research as well as previous
researches relevant to the topic. This will be done under three major segments:

2.1 Conceptual Issues About the Topic

The conceptual framework of this study, will point out the different definitions
proposed by different authors on performance appraisal and employee's
performance. It will start by describing the concept of Performance appraisal, the
different techniques used for performance appraisal, key elements of effective
performance management, approaches to performance appraisal according:
administrative approach and developmental approach, prerequisite for performance
appraisal system, sources of performance appraisal, performance appraisal process,
Traditional method of performance appraisal, modern methods of performance
appraisal.

The conceptual framework will also discuss the concept of Employee, the
performance measurement for an employee, variables of measuring performance,
Roles of Supervisors, Employees and Reviewers in Performance Appraisal.

2.2 THEORETICAL FRAMEWORK

The need to anchor the concept of performance appraisal on employees future

performance within the framework of certain theories cannot be overemphasized.
Different theories have been propounded to explain the concept of performance
appraisal. However, this study will examine the goal theory and the Control theory
with particular emphasis on the Nigerian business environment with the use of
Demotion, Termination, Redeployment, Transfer and Retrenchment.

2.3 EMPIRICAL FRAMEWORK

This segment will comprise of summary of findings of other researchers. Several

research studies have examined performance appraisal on employees’ future
performance, but their results vary widely. For example, from the findings of
(Mwema, N. W. & Gachunga, H. G., 2014) it was established that the appraisal of
the supervised staff in the organization was done quite often that is semi annually,
yearly, quarterly or even once in every 2years. The study established that
organization utilized targets, accomplishments, organization goals, time
management and efficiency for performance measure purposes.
Weiss, (2001) as cited in (Mwema, N. W. & Gachunga, H. G., 2014) indicated that
to be productive, the performance appraisal process must contain general three
steps: evaluation and job analysis, appraisal interview, and post-appraisal
interview. During the first step, both the appraiser and the appraise should prepare
for the interview by considering job performance, job responsibilities, and
employee career goals, goals for improving performance, and problems and
concerns about the job.

Kumar, (2014) identified a strong positive correlation between performance

appraisal and employee capability and organizational performance. It is also clear
that employee capability and organizational performance are predicted by
performance appraisal, hence it is clear that performance appraisal plays a major
role in the development of the workforce of the organization and retaining them in
the organization and also performance appraisal aids in the improved
organizational performance by motivating the employees and by solving al work
related issues of the employees.

Researches from Schraeder, Becton & Portis, 2007; Mone & London, (2010);
Macey, Schneider, Barbera & Young (2009) also identified that the method of
personnel appraisal also go a long way in determining the success and competitive
positioning of an organization.

3.0 RESEARCH METHODS

This segment of the study aims at providing a brief description of the procedures
and instruments adopted in collecting and analyzing data. It provides an insight
into how the data collected were interpreted. It also contains the sampling
techniques and sampling subjects of the field work.
3.1 RESEARCH DESIGN

In order to critically examine and determine the effect of performance appraisal on

employee future performance of Firstbank, the survey research method will be
adopted. This is because it represents a good source of information from the
employee concerning their opinion. Babbie (1983) states that survey are the
excellent vehicles for measuring behaviour in a large population.

Wimmeret’al (1987) says survey involves drawing up set of questions on various

subjects to which selected members of the population is expected to react.

Sobowale (1983) said that survey method is the best method available to social
scientist interested in collecting original data for describing population too large to
observe directly.

3.2 THE STUDY POPULATION

Population is the set of all objects (units) or observation about which conclusion is
to be drawn. A population is also an aggregate of all element that share common
characteristics (Osuagwu, 2006).

According to Asika (2000), population is made up of all conceivable element

subject or observations relating to a particular phenomenon of interest of the
researcher.

The population of this study covered the entire staff of Abeokuta branch of
FirstBank Nigeria Plc. The staff strength of Abeokuta branch is 200 in total.

3.3 SAMPLE SIZE AND SAMPLING TECHNIQUES

The purposive non-probability sampling technique was employed in getting the
population sample. This technique involves the selecting of respondents on the
basis of specific characteristics or qualities and eliminating those who fail to meet
the criteria.
Out of the population of this study, 100 respondents was selected from the staffs of
Abeokuta branch of FirstBank Nigeria Plc. This is because the staffs are in good
position to relate the effect of performance appraisal on overall future perrormance
of employees. Response obtained from the total sample will be used for
generalization on the total population of the study.

3.4 Research Instrument Specification

The main research instrument that will be used for this research work is a
structured questionnaire. The questionnaire was divided into two sections – section
A and B.

Section A consist of questions relating to the personal data of the respondents.

Section B contain structured questions based on the Likert Scale i.e.

Strongly Agree (SA) = 5

Agree (A) = 4

Undecided (U) = 3

Disagree (D) = 2

Strongly Disagree (SD) = 1

This questions was drawn from the research hypothesis of this study, and elicit the
views and opinions of the respondents on the topic of study.
3.5 Reliability of Instrument

Reliability is described as the consistency between independent measurements of

the phenomenon. The reliability of the data obtained from the administration of the
questionnaire is being checked using the Cronbach’s alpha statistic through the use
of an analytical software package: Statistical Package for Social Sciences (SPSS,
version 20). Cronbach’s alpha determines the internal consistency or average
correlation of items in a survey instrument to gauge its reliability, that is, how
closely related a set of items are as a group.

3.6 Validity of Instrument

The Validation of the questionnaire will be done by my supervisor and a pre-test

will be conducted on a few respondents who are not part of the sample size to
determine if the questionnaire is good enough to generate objectives of the study or
if there is need for amendments.

3.07 METHOD OF DATA PRESENTATION AND ANALYSIS

The Regression coefficient method and the correlation coefficient method will be
used in analyzing the gathered data and to test the research hypotheses through the
use of an analytical software package: Statistical Package for Social Sciences
(SPSS, version 20). The Regression coefficient is concerned with establishing the
relationship that exist between the dependent and independent variable.
REFERENCES

Asika, N. (2000). Research methodology in the behavioural sciences. Lagos:

Longman Nigeria.

Asika, N. (2004). Research methodology in the behavioural sciences (7thed.).

Lagos: Longman Nigeria.

Macey, W. H., Schneider, B., Barbera, K. M., & Young, S. A. (2009). Employee
engagement: tools for analysis, practice, and competitive advantage.
Malden, WA: Wiley-Blackwell

Mwema, N. W. & Gachunga, H. G. (2014). The influence of performance appraisal

on employee productivity in organizations: A case study of selected WHO
offices in East Africa. International Journal of Social Sciences and
Entrepreneurship, 1 (11), 324-337

Osuagwu, L. (2002). Marketing: principles and management. Lagos: Grey

Resources Limited.

Schraeder, M. Becton, J., & Portis, R. (2007). A critical examination of

performance appraisals. The Journal for Quality and Participation, 21(1),
20-25.