EFFECT OF EMPLOYEE PERFORMANCE APPRAISAL AND MOTIVATION STRATEGY ON EMPLOYEES IN THE BANKING INDUSTRY

Introduction

1.0 Background To The Study

The relationship between appraisal and motivation is one of the main concerns of an organization’s management. For organizations to achieve their stated objectives and goals, employees must have appraised based on the basis of present or past performance, relative to the organization so as to motivate them through feedback and encourage them to perform above par or put in more efforts.

A performance appraisal is the process of assessing workers performance in comparison to certain predetermined organizational standards. Performance appraisal is a formal system of measuring, evaluating and influencing an employee’s job-related attributes, behaviours and outcomes.

In some organizations, appraisal results may be used to determine relative rewards in the firm − who should get merit pay increase, bonuses, or promotions. Similarly, appraisal results can be used to identify the poorer performers who may require some form of counseling, training, demotion, dismissal or decreases in pay of the poor performance.

Interestingly, performance appraisal is a very controversial managerial issue. Some researchers have expressed doubts about the validity and reliability of the process. On the other hand, there are advocates of performance appraisal who claim that it may well be the most critical of all Performance Appraisal and Motivation.

Motivational research conducted by theorists including Elton Mayo and Frederick Taylor, have recognized the power of recognition as an incentive performance appraisals provide employees with recognition for their work efforts. The appraisal system provides the supervisor with an opportunity to indicate to employees that the organization is interested in their performance and development. This recognition can have a positive motivational influence on the individual’s sense of worth, commitment and belonging.

Motivation is defined as a psychological process that gives behaviour purpose and direction. Motivation is seen as a very important aspect of an organization as it contributes to how well it performs. This ultimately has an effect on organizations’ corporate objective. This includes attainment of higher market share and profit maximization as a result of the employee of Permernace.

1.1 Background Of Wema Bank

Wema Bank Plc was formally known as Agbonmagbe Bank and was incorporated in 2nd May 1945 as a private limited liability company. It commenced business operations as a commercial bank in the same year. The Bank was converted to a public limited liability company in April 1987 and was subsequently listed on the floor of the Nigerian Stock Exchange inJANUARY 1990.

On February 5, 2001, the Central Bank of Nigeria granted a Universal Banking License to the Bank, thus allowing the Bank to undertake a wide range of financial services to its numerous customers across the country.

The Bank has witnessed tremendous growth and development in branch network, quality of service delivery and overall financial performance in the last two decades. The bank embarked on a process of corporate transformation that has resulted in the emergence of a restructured Wema Bank PIc, strategically positioned to fully optimize opportunities in the industry.

Wema Bank Plc is adequately capitalized, her shareholders’ funds is in excess of N25billion and her asset base is N165 billion. Presently, Odu’a Investment Company Limited holds 10% equity stake in the Bank, while private individual investors and staff of the Bank own the remaining 90%.

The authorized share capital of the Bank is N7,000,000,000.00 divided into 14,000,000,000 ordinary shares of SO kobo each.

With banking operations spanning sixty years, Wema Bank PIc is reputed to the longest surviving indigenous bank in Nigeria. Wema Bank Plc is a customer-focused bank and takes delight in learning the intricacies of her customers businesses and preferences, thus her byline “Together to greater heights”.

1.2 Statement Of The Problem

Most organization does not usually do employee performance appraisal and motivation and the few that does these do not use appropriate method of employee performance appraisal and motivation. The inappropriate methods used by such organizations do not allow both the employees and the organization to benefit well from the employee performance appraisal and motivation strategy used. This study tends to look at effective methods to use in appraising and motivating employee performance so that the employees can have an improved performance to cope with the changes in the banking industry using Wema Bank Plc as a case study.

1.3 Aim And Objectives Of The Study

The aim of the study is to determine the significance of employee performance appraisal and motivation on employees in the banking industry.

The objectives are:

1. To determine the significance of employee performance appraisal on employee performance.
2. To find out the relationship between motivation strategy and employee performance.
3. To examine the significance of performance appraisal on organizational performance.
4. To investigate the relationship between managerial appraisal skills and employee motivation.
5. To examine the relationship between employee training needs and performance appraisal.
6. To determine the skills required for appraising employee performance.
7. To provide plausible recommendations on how performance appraisal can be improved.
8. To investigate how needs and need satisfaction operate to influence such variable as performance.
9. To examine the behaviors of employees when the goals set before them are not realistic.
10. To check how performance appraisal is conducted in Wema Bank Plc.

1.4 Research Questions

This aspect answer salient questions that will bring into focus issues that need and required adequate answers to justify the objective of the study. They are:

1. Does performance appraisal method have any effect on employee performance?
2. Does motivation strategy have any effect on employee performance?
3. Is there any significant effect of performance appraisal on organization Performance?
4. Can poor managerial skill on performance appraisal affect employee Motivation?
5. Can employee training needs be detected through performance appraisal?

1.5 Statement Of Hypotheses

Hypothesis 1

• Ho; There is no significant relationship between the organizational performance appraisal method and employee performance.
• HI; There is significant relationship between the organizational performance appraisal method and employee performance.

Hypothesis 1

• Ho; There is no significant relationship between employee motivation and employee performance.
• HI; There is significant relationship between employee motivation and employee performance

Hypothesis 3

• Ho; There is no significant relationship between employee performance appraisal and organizational performance.
• HI; There is significant relationship between employee performance appraisal and organizational performance.

Hypothesis 4

• Ho; There is no significant relationship between managerial appraisal skills and employee motivation.
• HI; There is significant relationship between managerial appraisal skills and employee motivation

Hypothesis 5

• Ho; There is no significant relationship between employee performance appraisal and employee training.
• HI; There is significant relationship between employee performance appraisal and employee training.

Where Ho is the full hypothesis and HI is the alternative hypothesis.

1.6 Significance Of The Study

Performance appraisals and motivation are seen as a very vital aspect of the organization between they have psychological effect on employee performance which definitely contributes to the organization performance. This ultimately has an effect on the organization’s corporate objectives which include the attainment of higher market shares and profit maximization as a result of individual performance.

Motivation is worth analyzing because it seems to be a very complex and confusing concept because people have different attitude and goal. Therefore, appropriate motivation should be given to individual employees.

Frequently, performance appraisals are not objectively conducted. This often leads to bad result, employee dissatisfaction, lack of employee motivation, unhealthy organization, inter-alia.

The result of appraisal will provide the management the information needed whether to train, develop, praise, motivate through competence (promotion), or recognize the appraisee’s effort.

Hence, performance appraisal will allow managers to make good judgements that will be helpful to both the organization and the employees.

1.7 Scope Of Study

The research topic is restricted to the financial industry. The case study as discussed in the company background is Wema Bank and six of its branches in Lagos and Ibadan will be used for gathering responses from her employees. The participants are limited to white collar employees in the branches selected.

1.9 Definition Of Terms

The terms in this study may be stated in technical terms and therefore needs to be defined:

Appraisal

Appraisal means evaluating an employee’s current or past performance relative to the person’s performance standards. It is a formalized system and systematic assessment of an individual’s potential and identification of training needs.

Appraiser / Evaluator

Is a person who examines how well an employee is doing or has performed in his or her job.

Appraisee / Evaluatee

Is an employee whose performance is being Examined .

Employee

Is a person who has entered into an agreement or works under a contract with an employer whether the contract is for manual labor or clerical work or is expressed or implied or oral or written in a contract of service to execute any work or task.

Employer

An employer is a person who enters into a contract of employment to employ a person as a worker either for himself or for another person.

Management

Is a body that runs the activities of an organization

Organization

This is a unit where a person can put in his performance to get satisfaction in any area and to seek the accomplishment of stated goals and objectives. It is the coming together of people to achieve positive result or reward.

Motivation

It is a driving force that stimulate an individual i.e a worker into an action he or she would not have exhibited in other to achieve organizational objectives.

Performance

This is the action that people put into their jobs. It is an effort an employee put into whatever he or she might be doing and the efforts are determined by his or her abilities which later bring about a positive or negative reward.

Productivity

Is reaching the highest level of performance with the least expenditure of resources. It is the output resulting from a given resources input at a given time.

Employee Training

Employee training is an organizational effort aimed at helping an employee to acquire basic skills required for the efficient execution of the function for which he is hired.

Employee Development

It deals with the activities undertaken to expose an employee to perform additional duties and assume positions of importance in the organizational hierarchy.

Reward

It is the compensation given to an employee in exchange for

Promotion

Is a movement to a higher or more important ranks or position.

1.9 Organisation Of The Study

The study contains five chapters:

Chapter 1; Includes the introduction, brief, history of the bank, statement of the problem, objective s of the study, research questions, statement of hypo theses, scope of the study, significance of the study, definition of terms and the organization of the study.

Chapter 2; Contains the review of relevant literatures and relevance of theories.

Chapter 3; Comprises the restatement of research questions and hypotheses, research design, population of study, sample and sampling procedures, data collection instrument, data collection procedure for data analysis and limitation of the methodology.