The Effect of Performance Appraisal on Employee Retention in Nigeria

The Effect of Performance Appraisal on Employee Retention in Nigeria: A Case Study of First Bank of Nigeria Limited

Project Abstract

The study investigated the effect of performance appraisal on employee retention: a case study of First Bank Nigeria Ltd. Both primary and secondary sources of data were used for data collection. Data were analyzed using frequency tables and simple percentages. Spearman rank correlation coefficient was adopted to test the formulated hypotheses. The study found that there is positive significant relationship between training and career development performance appraisal and employee retention; and there is also positive and significant relationship between objective/fair performance appraisal and employee retention. The study, therefore, concluded that performance appraisal has positive effect on employee retention. It was recommended, among others, that banking firms should integrate job training and career development into their organizational practices.

CHAPTER ONE

INTRODUCTION

1.1 Background of Study

In every business organization, the performance of the employees is important in achieving organizational goals. The success of every business organization can therefore be attributed to performance appraisal. Performance appraisal is one of the basic tools that make workers to be very effective and active at work. A critical look out on this may bring about the need for motivation, allowances, development, training and good human relationship in an organization.

The output of every organization depends on how well and how much the performance of the employee is appraised and evaluated. Productivity can therefore be defined as “quality or volume of the major product or services that an organization provides”. In short, productivity is what comes out of production. Managers of every business organization are charged with the responsibility to motivate their employees to achieve organizational goals. The efficiency and effectiveness of any work place whether the private or the public sector, largely depend on the caliber of the workforce. The availability of competent and effective labour force does not just happen by chance or accident but through an articulated recruitment exercise (Peretomode and Peretomode, 2001) and performance appraisal.

The whole essence of the management activities of an organization culminates into the system of performance appraisal adopted in that organization. This, in turn, reflects the extent of the individual contributions and commitment of the employees in different hierarchical levels toward the achievement of organizational objectives. It goes without saying that an effective performance appraisal system can lead an organization to take strides towards success and growth by leaps and bounds. Conversely, an ineffective performance appraisal system can seal the fate of an organization by creating chaos and confusion from top to bottom in the administrative hierarchy. As a consequence the chances of success and growth of that organization are doomed.

The Nigerian economy has been plunged into a state of economic decline since the early 1980’s, following the introduction of Structural Adjustment Programme (SAP), by Babangida’s Administration. Since then, productivity improvement has become a major challenge facing all work and business organizations and the Nigerian economy as whole. It has therefore become imperative for government and all stakeholders to evolve adequate measures that would improve productivity in Nigeria. It is on account of this, that most, if not all of the past leaders, have tried in one way or the other to carry out at least one reform measure in the public sector in order to enhance employee performance and productivity.

The nonchalant attitudes of public sector workers towards their duties and responsibilities have become a matter of great concern to the government at all levels and other well meaning Nigerians. There has been a persistent public outcry in the mass media indicting public sector employees for their negative attitude to work which has lead to low productivity and declining revenue.

Igbokwe-Ibeto (2011) observed that “people do not take their work seriously in many instances because people do not like what they are doing”. This nonchalant attitude to work is independent of geo-political zones, rural-urban residence, religious affiliation, sex or age. This opinion if properly examined suggest that in many cases, they see themselves as birds of passage, such notion and feeling is even worsened by the fact that performance appraisal and productivity management is not taken serious in most organizations.

A segment of Nigerian scholars such as, Okoro (2003), Oko (2004) and Arhuidese (2006)well tutored in Nigerian history have traced the genesis of the negative attitude to work prevalent among Nigerian to the event of colonial era. They argued that during the struggle and fight against colonialism, many nationalist using various approaches and strategies tended to give the impression that government as an institution and its agencies should be impoverished and vandalized. The public sector for example, was seen as a “white man’s job” and anything done to frustrate its operations is well intended. The notion, they argued have spread into all spheres of work in the present day Nigeria.

Some Nigerian scholars such as, , Mustafa (2006), Nwachukwu (2008) and Fatile (2010), emphasized the issue of poor performance appraisal and motivation at work as the some of the causes of this national slide. They argued that poor performance and low productivity is a direct consequence of inadequate motivation and performance appraisal. In line with this proposition, Enyinta, (2001) noted that, “there is general apathy on the side of the employers of labour to reward a worker who is conscientious and dedicated to his duties”. Workers more often than not go on strike resulting to loss of man-hours before they get their due rights.

Afam (2003) contributing to the above subject matter, believes that the Nigerian worker has become a pawn in the hands of exploitative capitalist. He went further to observe that workers are subjected to all kinds of ill treatments like reduction in ranks, removal of fringe benefits, pay cuts, late payment of salaries and wages and the prevalent retrenchment with or without benefits. He concluded by saying that a situation where a worker is not adequately rewarded for the cake he has painstakingly toiled to bake, is disheartening and left much to be desired, as it amounts to killing the goose that lays the golden egg.

1.2 Statement of the Problem

For a research work to get underway, some difficulties must be felt in a practical and theoretical situation. In other words, there must be a felt difficulty succeeded by efforts to find solutions to the problem. Efficiency and effectiveness in the Nigerian public sector has been a subject of controversy and debate by all and sundry. Inefficiency, ineffectiveness, red-tapism and low productivity are all common features of public sector. It is in line with this that Umo (2003), after examining the attitude to work of Nigerians concluded that Nigeria’s ambition for rapid industrialization, economic prosperity, social and political stability will singularly and collectively be frustrated if the current poor work attitude of Nigerian public sector is not urgently and positively improved”. The above opinion if properly analyzed, shows that improved or positive attitude to work in the Nigerian is an antidote for industrialization and economic stability and development in Nigeria. Performance appraisal as an important human resource (HR) strategy for achieving better employee performance and productivity is hardly taken serious by many organizations’ and most especially the Nigerian public sector. In fact, public sectors Managers see performance appraisal as a ritual and an academic exercise.

This prevailing anomaly in the public sector has provoked a series of studies geared towards ameliorating the ugly situation which scholars have attributed to the familiar challenges of the Nigerian federation. These problems according to Mukoro (2005) citing Fajemirokun, Briggs (2007) Igbokwe-Ibeto (2011), and Tonwe and Oghator (2009) comprises ethnicity, religious strife, corruption, colonial history, governance/leadership style, the military involvement in politics, dishonest performance appraisal and federal character principles. A number of reasons have been identified as being responsible for this ugly situation and a number of solutions have also been suggested, but the problem remained endemic and persistent in the Nigerian public sector. Their performances are still below expectation, their productivity is far below average, efficiency and effectiveness is virtually nil.

This study therefore, aims to further interrogate this catalogue of problems by having a look at performance appraisal in the Nigerian public sector so as to determine its effectiveness or otherwise using the Central Bank of Nigeria (FBN) Enugu Zonal office as a case study.

REFERENCES

Adu, A.L. (1995). The Civil Service in African State, London: Allen and Urwin Ltd.

Afam, E.F. (2003). “Nigerian Worker: A Sacrificial Lamb”, in Business Times, Wednesday, January 12, P. 7

Arhuidese, J.E. (2003). “Target Setting and Performance Measurement for Public and Private Sector”, Global Forum for Manpower Development-Developing Human Resources Skills Held for FBN Directors in Jos pp 1-11.

Arhuidese, J.E. (2002). Public Personnel Management, Monograph Series, Ekpoma: Department of Public Administration, Ambrose Alli University, Ekpoma.

Armstrong, M. (2006). A Handbook of Human Resource Management Practice, 10th edition, London: Kogan Page.

Armstrong, M and Murlis, H. (2006). Reward Management, 4th edition, London: Kogan Page.

Armstrong, M. (2009). A Handbook of Human Resource Management Practice, 11th edition, London: Kogan Page.