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THE USE OF PERFORMANCE APPRAISAL AND REWARD SYSTEM IN ENHANCING EMPLOYEE PERFORMANCE IN AN ORGANIZATION

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ABSTRACT

The study was carried out on the use of performance appraisal and reward system in enhancing employee performance. The study adopted a descriptive research design. The population of interest consists of all 300 employees of Nestlé Nigeria PLC. A sample size of 171 was selected using stratified sampling method. Data was collection using structured questionnaires. The data was analyzed using the Statistical Package for Social Sciences (SPSS) into frequency distribution, percentages and Pearson correlations. The data was presented using tables and charts. On the effect of performance appraisal and reward systems process on employee performance established that the system is important for employee motivation. Performance appraisal and reward systems system has helped improve job performance at work. The regular assessment of performance leads to employee motivation. The performance standards are quantified and pegged against an individual evaluation which is essential for employee motivation. Performance appraisal and reward systems rating can be considered as a technique that has a positive effect on work performance and employee motivation. The performance appraisal and reward systems identifies performance problems to improve employee productivity and motivation. On the effect of performance appraisers on employee performance established that the different raters can increase the accuracy of performance evaluation (can reduce bias) and increase employee’s perceptions of fairness. Customers can recognize the employees when they do a good job evaluation process that are important for employee’s motivation. Subordinate evaluations may give valuable information to improve on the employee’s motivation. The manager’s ability to address the skills gaps can have a significant impact on the employee’s motivation. The study concludes that performance appraisal and reward systems process on employee performance established that the system is important for employee motivation. Different raters can increase the accuracy of performance evaluation (can reduce bias) and increase employee’s perceptions. The manager’s ability to address the skills gaps can have a significant impact on the employee’s motivation. The study recommends that the performance appraisal and reward systems system is an important factor for employee motivation. Performance appraisal and reward systems system helps improve employee job performance and motivation at work. Different raters can be used to increase the accuracy of performance evaluation and increase employee’s perceptions of fairness that can increase staff motivation.

 

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

The human resource department is one of the most important departments in every company and firm. Every company adopts different departmental demarcations to suit their mission but in all of them, this department is always found almost as important, if not more important, than the public relations department. This is so as the background and welfare of the employees are as important as any other mission the company or establishment is poised towards.

 

The management of employees and the maintenance of their working spirit goes beyond the payment of salaries and the assignment of duties. The establishments rely on the employees for the attainment of whatever goal or target they have set for themselves which means that the maintaining of high performance and the spirit to meet the targets is also part of what is to be looked after by the employers; creating a conducive working environment and the incentive to go the extra mile beyond one’s job description.

Boice and Kleiner (2007) suggest that employee performance appraisal and reward systems is crucial for the motivation of the employees. Performance appraisal and reward systems refers to where a superior evaluates and judges the work performance of subordinates (Harter, Schmidt and Hayes, 2002). While the performance appraisal and reward systems system refers to the methods based upon the following techniques: Graphic rating scales; behaviourally anchored rating scales (BARS), behavioural observation scales (BOS); mixed standard rating scales and management by objectives (MBO) (Francis and Kleiner, 2004). The rating system of the employees is necessary as it helps to identify the people for the leading positions in the organization. Boice and Kleiner, (2007) reports that effective appraisal system helps to produce committed and motivated employees. According to Pitts (2005), one key strategy for organization success is the ability to motivate, attract and maintain a motivated-valuable workforce in today’s marketplace.

 

1.2 Statement of the Problem

Between creating an enabling environment for the employees and handing out incentives to them is the list of measures needed to boost the spirits of the employees. Without this extra nudge, the situation is usually one of apathy and the lack of the will to put extra effort past the agreed ones that are in their job description. However, often employers find that it is the extra efforts on the parts of the employees that make all the difference. So employers device systems are known as reward systems which “address these four areas: compensation, benefits, recognition and appreciation” (Entrepreneur Media). This is the research problem we are grappling with in the present work: to study the use of appraisals and reward systems in enhancing employee performance in an Organisation such as Nestlé Nigeria PLC.

 

1.3 General Objective

The general objective of the study was to determine the use of performance appraisal and reward systems and reward system in enhancing employee performance.

 

1.4 Specific Objectives

The study was guided by the following specific objectives:

1.4.1 To establish the extent to which performance appraisal and reward systems process affects employee motivation.

1.4.2 To determine the extent to which appraisers affect employee motivation.

1.4.3 To determine the challenges in appraising employee performance.

 

1.5 Significance of the Study   

The significance of this work goes beyond its immediate objective of studying and enumerating reward systems and performance appraisal and reward systems. It sheds light on the human resources myths that have grown moribund and proffers feasible and viable methods of incentives. This work is also important in terms of understanding the minds of the average corporate and public employees and showing the factors that affect them the most..

 

1.6 Scope of the Study

The manifestations and influences of performance appraisal and reward systems and reward systems discussed here only focus on Nestlé Nigeria PLC and attention is given more to the systems they adopt and how they have come to boost employee performance over time.

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