employees' perceptions of performance appraisal and its effect on job satisfaction

93 Pages·2014·0.68 MB·English

AN EVALUATION OF EMPLOYEES SATISFACTION WITH
PERFORMANCE APPRAISAL SYSTEM: A CASE STUDY OF VODAFONE
GHANA (KUMASI-ADUM AND ACCRA-HEAD OFFICE)

By
Pearl Frimpomaa

A thesis submitted to the department of Managerial Science, Kwame Nkrumah
University of Science and Technology in partial fulfillment for the degree of

MASTERS OF BUSINESS ADMINISTRATION
(HUMAN RESOURCE MANAGEMENT OPTION)

School of Business, KNUST
College of Arts and Social Sciences

July 2014
1
DECLARATION
I hereby declare that this submission is my own work towards the MBA and that to the best
of my knowledge, it contains no material which has been accepted for the award of any other
degree of the University, except where due acknowledgement has been made in the text.

Pearl Frimpomaa ……………………………... …………………
PG7603112 Signature Date

Certified by:
Mrs. Rosemary Boateng- Coffie ……………………………... …………………
Supervisor Signature Date

Certified by:
Mr J.K. Turkson ……………………………... …………………
(Head‟s of Dept.) Signature Date

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DEDICATION
The main source behind this attempt was the inspiring wishes of my late granny who
nurtured this dream but could not live long to witness its accomplishment. This work is the
highest formal educational achievement for me. I dedicate this work to my late grandmother
Madam Mercy Danso. May her soul rest in perfect peace.

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ACKNOWLEDGEMENT
My first thanks and praise go to the Almighty God, the sustainer of the universe, the most
kind and merciful, without his blessings and protection nothing would have been possible. I
thank him for the wisdom and strength that he provided me to complete this work. This
dissertation is a culmination of extensive study, but not a solitary effort. There are numerous
individuals who have provided me with support and encouragement in the form of precious
ideas and required guidelines. I wish to express my deepest gratitude to Mrs. Rosemary
Boateng-Coffie (Supervisor) who provided me scholarly guidance, expert opinion,
encouragement and inspiration to complete this study. Her proactive directions inspired me
greatly to this height.
I wish to express my grateful sentiments and appreciation to my father, Mr. Charles Asante
who has been with me and urged me on and also supported me through encouragement and
in cash. To Kwadwo Adjei-Barwuah, I appreciate everything you have done for me for this
work to be a success and all staff of Vodafone Ghana (Adum and Accra-Head Office). Also,
to Mr. George Ayisi Boateng, my family; Ms. Shiela Amoako, Mrs. Irene Asante, Liela,
Sandra, Helmy and Claudia, your prayers, inspirations and advice brought me this far. May
God richly bless and replenish whatever you lost just for me to make this work a success.
God bless you all.
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ABSTRACT
Performance appraisal seems to be one of the most important tools in Human Resource
Management. Organizations design appraisal systems to assess and enhance employees
performance, develop their competence and distribute rewards. Because of this, it is now
viewed as a mechanism for developing and motivating people hence the general consensus
among performance appraisal researchers and practitioners that assessment of appraisal
reactions is important. For instance, it is frequently argued that in order for performance
appraisal to positively influence employee behavior and future development, employees must
experience positive appraisal reactions. The key to experience this positive reaction is an
answer to the question ' are employees satisfied with the performance appraisal system?'. The
purpose of this paper is to evaluate employee satisfaction as the most important reactions
with performance appraisal systems. The aim is to analyze findings in the light of existing
literature theories. The knowledge from the theoretical part of this paper combined with the
results of the research can be useful for managers/ supervisors who deal with employees and
for HR professionals who make decisions based on appraisal results.
The research was based on the questionnaires distributed to the sample of 120 respondents
from Vodafone Ghana (Accra - Head Office and Kumasi - Adum). The respondents were
asked both open ended questions which they provided their own answers to and closed ended
questions which they provided answers based on the researchers options.
With the use of the SPSS software, the data analyzed showed that employees clearly
understood the criteria used for appraisal assessment and employees were invited for
discussions about their performance before they append their signatures on the assessment
sheet. The findings from the study also suggested that the appraisers may not have direct or
adequate knowledge of the job specification of employees in other to give a profound
assessment and also the type of appraisal system in place gave the appraiser a greater
influence over the final results. It was therefore recommended that management should
employ well positioned appraisers who have adequate knowledge of the job or better still
have some training for appraisers before they carry out the appraisal exercise. Management
was also advised to have a review process or committee for employees who were not
satisfied with their results to seek redress.
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TABLE OF CONTENTS
DECLARATION ........................................................................................................................ i
DEDICATION ........................................................................................................................... ii
ACKNOWLEDGEMENT ....................................................................................................... iii
ABSTRACT .............................................................................................................................. iv
TABLE OF CONTENTS ........................................................................................................... v
LIST OF TABLES .................................................................................................................... ix
LIST OF FIGURES ................................................................................................................... x

CHAPTER ONE ........................................................................................................................ 1
1.0 INTRODUCTION ............................................................................................................... 1
1.1 Background of the Study ..................................................................................................... 2
1.2 Problem Statement ............................................................................................................... 3
1.3 Objectives of the study......................................................................................................... 4
1.3.1 General objective .............................................................................................................. 4
1.3.2 Specific objectives ............................................................................................................ 4
1.4 Research questions ............................................................................................................... 5
1.5 Significance of the study ...................................................................................................... 5
1.6 Brief methodology ............................................................................................................... 6
1.7 Scope of the study ................................................................................................................ 6
1.8 Limitation of the study ......................................................................................................... 6

CHAPTER TWO ....................................................................................................................... 8
LITERATURE REVIEW .......................................................................................................... 8
2.0 Introduction .......................................................................................................................... 8
2.1 The Concept of Performance Appraisal ............................................................................... 8
2.2 History of Performance Appraisal ..................................................................................... 10
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2.3 Objectives of Performance Appraisal ................................................................................ 12
2.4 Types of Appraisal ............................................................................................................. 16
2.4.1 Managerial / Supervisor Appraisal ................................................................................. 16
2.4.2 Self – Appraisal............................................................................................................... 16
2.4.3 Subordinate Appraisal ..................................................................................................... 17
2.4.4 Peer Appraisal ................................................................................................................. 17
2.4.5 Team Appraisal ............................................................................................................... 17
2.4.6 Customer Appraisal ........................................................................................................ 17
2.4.7 360 Appraisal .................................................................................................................. 18
2.5 Benefits of Performance Appraisal .................................................................................... 18
2.6 Performance Appraisal Process ......................................................................................... 21
2.7 Methods of Performance Appraisal ................................................................................... 23
2.7.1. Ranking Method : .......................................................................................................... 24
2.7.2 Graphic Rating Scales: .................................................................................................... 24
2.7.3 Critical Incident Method: ................................................................................................ 24
2.7.4. Narrative Essays: ........................................................................................................... 25
2.7.5 Management by Objectives: ........................................................................................... 25
2.7.7 Human Resource Accounting: ........................................................................................ 26
2.7.8. Assessment Centers: ...................................................................................................... 26
2.7.9. 360 Degree: .................................................................................................................... 27
2.7.10 720 Degree: ................................................................................................................... 27
2.8 Problems in Performance Appraisal .................................................................................. 28
2.8.1 System Design and Operating Problems......................................................................... 28
2.8.2 Rater Problems ................................................................................................................ 28
2.8.2.1 Leniency error .............................................................................................................. 29
2.8.2.2 Central tendency error .................................................................................................. 29
2.8.2.3 Recency of events error ............................................................................................... 29
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2.8.2.4 The halo effect ............................................................................................................. 29
2.8.3 Employee Problems ........................................................................................................ 30
2.9 Performance Appraisal Biases and Errors ......................................................................... 30
2.9.1 First Impression (primacy effect): .................................................................................. 31
2.9.2 Halo Effect ......................................................................................................................31
2.9.3 Horn Effect: .................................................................................................................... 31
2.9.4 Excessive Stiffness or Lenience: .................................................................................... 31
2.9.5 Central Tendency: ........................................................................................................... 31
2.9.7 Spillover Effect ............................................................................................................... 32
2.9.8 Recency Effect: ............................................................................................................... 32
2.10 Feedbacks in performance appraisal system .................................................................... 32
2.11 Types of feedback ............................................................................................................ 34
2.11.1 Team Process Performance Dimension ........................................................................ 35
2.11.2 Task Outcome Performance Dimension ....................................................................... 35
2.12 Sources of Performance Appraisal and Its Feedback Effect on Employees. ................... 35
2.13 Factors that may affect the Feedback Process ................................................................. 36
2.14 Employees attitude towards the content of performance appraisal ................................. 38
2.15 Performance Appraisal System and Performance Improvement ..................................... 40
2.16 Conclusion ....................................................................................................................... 41

CHAPTER THREE ................................................................................................................. 42
RESEARCH METHODOLOGY AND ORGANISATIONAL PROFILE ............................. 42
3.0 Introduction ........................................................................................................................ 42
3.1 Research Design................................................................................................................. 42
3.2 Sources of data ................................................................................................................... 43
3.2.1 Primary Data ................................................................................................................... 43
3.2.2 Secondary Data ............................................................................................................... 43
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3.3. Population ......................................................................................................................... 43
3.4 Sample and sample technique ............................................................................................ 44
3.5 Data Collection Instrument ................................................................................................ 45
3.6 Data Presentation and Analysis ......................................................................................... 48
3.7 Data Processing .................................................................................................................. 48
3.8 Pilot Study .......................................................................................................................... 48
3.9 Organizational profile ........................................................................................................ 49
3.10 Summary of methodology................................................................................................ 50

CHAPTER FOUR .................................................................................................................... 51
DATA ANALYSIS AND PRESENTATION ......................................................................... 51
4.0 INTRODUCTION ............................................................................................................. 51

CHAPTER FIVE ..................................................................................................................... 61
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS .................... 61
5.0 INTRODUCTION ............................................................................................................. 61
5.1 SUMMARY OF MAIN FINDINGS ................................................................................. 61
5.1.1 Assessment of the Performance Appraisal System adopted by organizations ............... 61
5.1.2 Perception of employees towards Performance Appraisal System ................................. 62
5.1.3 Satisfaction level of employees towards performance appraisal system ........................ 63
5.2 CONCLUSION .................................................................................................................. 64
5.3 RECOMMENDATIONS ................................................................................................... 64

REFERENCES ........................................................................................................................ 66
APPENDICES ......................................................................................................................... 75

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LIST OF TABLES
Table 1: Population of employees at Vodafone Ghana. .............................................. 44
Table 2: Number of employees .................................................................................... 44
Table 1: Sample size .................................................................................................... 45
Table 2: Sampled data .................................................................................................. 45
Table 4.1: Age and Service Characteristics of the Respondents ................................. 52
Table 4.2: Assessment of the Performance Appraisal System adopted by organizations
...................................................................................................................................... 55
Table 4.3: Perception of employees towards Performance Appraisal System ............ 57
Table 4.4: Satisfaction level of employees towards performance appraisal system .... 59

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