PERFORMANCE EVALUATION IN THE NIGERIAN BANKING INDUSTRY
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Transcript of PERFORMANCE EVALUATION IN THE NIGERIAN BANKING INDUSTRY
PERFORMANCE EVALUATION IN THE BANKING INDUSTRY:
CASE STUDY OF FIRST BANK NIGERIA LIMITED
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INTRODUCTION
Performance evaluation serve multiple purposes in organizations because
they monitor workforce progress and help determine if promotions,
terminations, transfers, and training/development are warranted (Grote
2002). Simply stated, performance appraisals can help fulfil whichever role
fits the organizational culture. According to Robbins (1997), managers can
use performance appraisals for personnel decisions. He states,
“performance appraisals help highlight areas where employee skills and
competencies are deficient but can be remedied with appropriate actions”
(1997, 219). Robbins maintains that when employees’ skills are deficient,
performance appraisals can be used by managers as a criterion against
which training and development programs are validated. In the area of
training and development, performance appraisals can also serve the role
of providing feedback to employees on how their organizations rate their
performance. Another important consideration is that performance
appraisal help incentivize employees towards reward-based allocations
(Robbins 1997).
Consequently, Nigeria’s working class which consists of those who have
little control over the pace and content of their work and do not supervise
others (Ololade 2001) remains uncertain about their future in the
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workplace. In this current economic crisis, “financial markets are volatile,
unemployment insurance claims have jumped to their highest levels, and
more jobs are disappearing” (Ajiri & Ololade 2006). As managers in
corporations seek new ways to remain profitable during this current
economic crisis, Foley-2 “employees who contribute directly to the top-line
and bottom-line will become more important” (Biswas & Mahes 2008, 2).
Unfortunately, the use of well-crafted employee performance appraisals
becomes increasingly important because they can help identify top
performers and layoff poor performing employees, which also helps reduce
costs during economic crises (Public Personnel Management 2000).
When employee performance was less than a standard established by a
company, a pay decrease would result: when employee performance
exceeded management’s expectations, a pay increase would result.
Performance appraisals initially ignored employee development. According
to Korede and Appiah (2006), either a reduction in pay or a raise motivates
employees to either improve or continue to perform well. They further
opined that accurate and efficient performance measurement not only
forms the basis of an accurate performance review but also gives way to
judging and measuring employee potential effectively; performance
appraisals not only place genuine concerns on the needs of individuals but
also help organizations to:
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Determine how the job of each employee can further the overall goals
of the organization;
Examine individuals to evaluate the employee’s strengths and
weaknesses;
Identify and reward good employees to be more assiduous, in order
to foster loyalty and motivate employees to continue to achieve;
Keep employee morale high through continuous feedback;
Remain aware of the needs of the workforce to ensure employee
retention and increase productivity and innovation;
Reduce the risk of complaints and litigation by ensuring that
employees feel fairly treated and are not surprised by management
decisions; and
Identify and deal with problem employees to either turn problem
employees into valuable, productive workers or lay the groundwork
for discipline and, if necessary, termination” (2005,1/5).
Statement of the problem
Organizational success depends on employee hard work and dedication. By
using performance appraisals, employers increase their chances of
identifying deficiencies that are potentially threatening to company-wide
success (Vance 2006). In addition, when employees cannot meet
organizational standards, employers can use performance appraisals to
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more easily terminate employees for substandard work that has been
documented (DelPo 2005). When performance standards are clearly
articulated by management, employees know what is expected of them,
what their role as a part of a group and organization is, what is considered
unacceptable performance, and how organizational standards should be
achieved (Robbins 1997).
Although critics such as Gary Roberts (2003), an associate professor at the
University of Memphis and authors Saul Gellerman and William Hodgson
(2008) argue that performance appraisals are ineffective, performance
appraisals are essential for managing employee progress and performance.
Coens and Jenkins (2000) maintain that instead of abolishing performance
appraisals, organizations can “begin an organization-wide initiative of
education which helps people understand why an appraisal fails and then
together work on strategies to replace the appraisal, looking for genuinely
new ways to actually deliver on the high hopes that were placed in the
appraisal” (2000, 19). In view of this, this study beams its searchlight on
the use, effect and popularity of Performance Appraisal in the Banking
industry, with a specific focus on Wema Bank of Nigeria PLC.
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Objectives of the study
The goal of the study is to analyse issues related to performance and
confirm that organizations should use employee performance appraisals to
achieve organizational goals and objectives, and to examine corporate
responsibility with regard to employee performance. Thus, the study will
comprise of the following objectives;
1. If Performance Evaluation is used as a training tool that grows and
develops managers and employees.
2. To evaluate the disposition of employees to the concept of
Performance Evaluation in the Banking industry
3. To identify the factors that could affect the quality of the
Performance Evaluation process
4. To identify the effect of Performance Evaluation on the growth and
development of employees, management, and the bank
Hypothesis
The following hypotheses were developed for the study;
Hypothesis 1: There is no significant relationship between Performance
Evaluation, and growth of the bank.
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Hypothesis 2: Performance evaluation does not reflect an objective
assessment of the employee.
Scope of the Study
Performance is not defined by one particular measure; rather it is an
action(s) that management defines (Vikesland 2006). “Measuring employee
performance is the basis of the performance appraisal processes and
performance management”. Thus, this study covers the performance
evaluation of employees in the Banking industry in Nigeria and how it
affects the growth and development of employees. It also focuses of the
quality and nature of the Performance Evaluation process.
Significance of the Study
When performance standards are clearly articulated by management,
employees know what is expected of them, what their role as a part of a
group and organization is, what is considered unacceptable performance,
and how organizational standards should be achieved (Robbins 1997).
This study will expound the benefits, strength and importance of
performance evaluation in an organisation, with particular reference to the
Banking industry. To this end it will therefore serve as a benchmark for
financial researchers to further evaluate the effect of employer-employee
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relationship, and how it ultimately impacts the performances and growth
of the banking industry in Nigeria.
Consequentially, it will aid the Government, policy makers and
stakeholders properly articulate critical areas in HR that needs to be
improved on so as to forge a stronger workforce.
Limitation of the study
Due to administrative constraints encountered during the course of the
work the study only covered management staff while non-management
employees were left out. Furthermore, at the time of the study, only the
male management staff were accessible for the interview/questionnaire
administration.
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