PERFORMANCE APPRAISALS AND CORPORATE SURVIVAL(A STUDY OF CISCON NIGERIA LIMITED PORT HARCOURT METROPOLIS)

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE SDUDY

In today’s competitive business world, it is understood that organizations can only compete with their rivals by innovating. Organizations can only innovate by managing their human resources well. The human resource system can become more effective by having a valid and accurate appraisal policy used for rating performances of the employees. Unfortunately, the number of organization using an effective performance appraisal policy is limited Yalcin, (2002).

Performance appraisal is a key in human resource management function which is viewed as a subset of performance management. Rao (2005) argues that performance appraisal is a method of evaluating the behavior of employees in the work place, this normally including both the quantitative and qualitative aspects of job performance. It helps to identify and overcome the problems faced by the employees in their work (Mackey & Johnson, 2000). Although it has many benefits for the organization, Nurse, (2005); states that performance appraisal have the equal probability of having a bad influence on the organization as well as on employee performance.

According to Kuvaas, (2006); performance appraisal or employee appraisal is a method by which the job performance of an employee is evaluated generally in terms of quality, quantity, cost and time typically by the immediate line manager or supervisor. A performance appraisal is a part of the process of guiding and managing career development in both private and public sectors. It involves the task of obtaining, analyzing and recording information about the relative worth of an employee to the organization.

Accurate appraisals are crucial for the evaluation of recruitment, selection, and training procedures that lead to improved performance. Appraisals can determine training needs and occasionally, counseling needs. They can also increase employee motivation through the feedback process and may provide an evaluation of working conditions, thus, improving employee productivity, by encouraging the strong areas and modifying the weak ones.

When effective, the appraisal process reinforces the individuals’ sense of personal worth and assists in developing his/her aspirations. According to Maud, (2001); Performance helps firms, industries and nations to achieve sustainable competitive advantage. Industry is a thrust area for countries in their quest for competitiveness. It must be noted that banks which have maintained the  momentum of  continuous growth, and profitability showed better ratio of manpower effectiveness. Each element has crucial sub-components which serve as building blocks for productivity, (Rao, 1994).

To thrive or survive, organizations need to continuously improve quality, attract more customers, and become more cost conscious.   In other words, firms need to better manage their performance appraisal and increase Employee performance.  Over the years, there are many practices, tools, techniques, systems, and philosophies that aim to help organizations to gain the competitive advantage of higher performance.

There has been a widespread use of performance appraisal in work organizations all over the world.   This widespread use of Performance Appraisal Systems (PAS) can be attributed to human resource specialists, academics and consultants who proclaim that performance appraisal is a critically needed tool for effective human resource management (Locker and Teel, 1997).

Formal performance appraisal has become a widespread instrument of human resource management. Surveys reported in the 1970s and 1980s already indicated that between 74 percent and 96 percent of U.S. organizations, and a comparable proportion of British firms had a formal performance appraisal in place. Large, complex organizations are especially likely to conduct formal appraisals (Berry, 2003). Not surprisingly, many   firms   in   Thailand   are   vigorously   implementing   Performance Management System (PMS) to help them better manage their employee’s performance and in turn, it affects organizational performance.  Since it is the key process through which work is accomplished, it is considered the “Achilles heel” of managing human capital (Pulakos, 2009). Therefore, it is very important to manage performance appraisal effectively.

Corporate survival has been the most interesting topics for organizations over the years. Organizations exist to survive in the midst of environmental factors that tend to encroach on business performance. Organizations attempt to maintain the existing state of affairs, but essentially the larger part of their efforts is tilted toward survival (Mindy, 1998).   The competition in the industry is getting stronger and firms are adopting different strategies to be competitive in the industry. Surviving is the global struggle to meet with increasing demand on firms in the market place has seen many researchers and academicians having a resort to pay attention to the individual employees in the organization since innovation in product and services are brought about by these individuals.

However, in the review of past studies, despite the level of work that has been done, only few studies try to discuss some specific aspects of performance appraisal that can affect survival of organizations.  This has necessitated  more  work  to  be  done  on  the  extent  to  which performance appraisal affects corporate survival especially in selected Gas companies in Port Harcourt. Given this knowledge breach, our point of departure from previous studies are to empirically establish the relationship between performance appraisal and corporate survival.

1.2 STATEMENT OF PROBLEMS

This brings us to those problems that are associated with conducting performance appraisals. The process usually starts at the middle management level where it is the job of a middle manager to appraise his subordinates or employees who are under him.  In fact every successive hierarchical level, the superiors are asked to evaluate the employees who are working under them. This can give rise to many issues that make performance appraisals an unpleasant task. As a result, many managers view the process of appraisal as time consuming and burdensome. To begin with performance appraisals can cause friction, resentment and the consequent low morale. Since appraisals are rather subjective in nature, they can also be disputed in case of negative ones.

The performance appraisal systems tend to have several problems. Raters‟ evaluations are often subjectively biased by their cognitive and motivational states (DeNisi & Williams, 1988), and supervisors   often   apply different   standards   with   different   employees   which   results   in inconsistent, unreliable, and invalid evaluations (Folger 1992). In order to create better systems, researchers have traditionally focused on validity and reliability (Bretz   1992) by designing newer “forms” of performance appraisals (e.g., behavioural-based systems that better define specific essential job functions of employees or 360-degree feedback mechanisms that allow for cross-validation via multiple raters).  However, despite these recent advances in evaluation design, critics continue to argue that performance appraisal systems are not consistently effective (Atkins & Wood, 2002; DeNisi & Kluger, 2000).This study sought to examine performance appraisal and organizational survival.

The main problems identified are as follows:

1. Poor feedback system.
2. Employee are not rated properly in this oil and gas firms.

iii.    Delayed in the ranking system of Ciscon Nigeria Limited.

1. Appraisals in Ciscon Nigeria Limited is not based on Job Behaviours.

1.3 OBJECTIVES OF THE STUDY

The main objective of the study is to examine performance appraisal and corporate survival. The specific objectives are as follows:

1. To examine the relationship between 360-degree feedback and corporate survival.
2. To examine the relationship between rating and corporate survival.

iii. To examine the relationship between ranking and corporate survival.

1. To examine the relationship between critical incident method and corporate survival.

 1.4 RESEARCH QUESTIONS

The following research questions will be used to guide the study.

1. Is there any relationship between 360-degree feedback and corporate survival?
2. To what extent does rating influence corporate survival?

iii. Is there relationship between ranking and corporate survival?

1. What is the relationship between critical incident method and corporate survival?

1.5 SIGNIFICANCE OF THE STUDY

This study is significant in the following ways;

Firstly, it will assist the organization to continually plan for the good of their employee’s and also make use of skilled manpower for the good of the organization.

Others who will benefit from this study include, managers, business organizations, higher institutions and the society in general.

1.6 SCOPE OF THE STUDY

The study is intended to empirically examine the relationship between performance appraisal and corporate performance. The study limits scope to some selected Gas Companies in Port Harcourt Metropolis, Rivers State with special reference to Ciscon Nigeria Limited.

1.7 LIMITATION OF THE STUDY

In carrying out an investigation of this native the researcher must of necessity be faced the following constraint.

Firstly, the time constraint’s the time frame provision for this study was short.

Secondly, financial constraints. Usually, a study of this nature involved some level of expenditure therefore, finance was also a limiting factor.

Thirdly, poor response from the respondent and inability to access the entire population of the study. In the next segment significance of the study will be discussed. Lastly, poor measurement instrument.

1.8 DEFINITION OF TERMS

APPRAISALS:       An act of assessing something or someone.

CORPORATION: It is a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.

EMPLOYEE:  A person employed for wages or salary, especially at non-executive level.

JOB PERFORMANCE: Assesses whether a person performs a job well.

JOB: A paid position of regular employment.

PERFORMANCE APPRAISALS: It is a method by which the job performance of an employee is documented and evaluated.

PERFORMANCE: An act of presenting a play, concert, or other form of entertainment.

SURVIVAL: It is the act of surviving; to stay living.