This study explored the effect of performance management on employee performance. The general objective of the study was to determine the effect of performance management practices on employee productivity with a focus on Nigeria Flour Mill. This study used the descriptive research design. The study adopted a quantitative approach on the effects of performance management practices on employee productivity. The dependent variables included performance appraisals, reward systems and performance feedback, and the implications on employee productivity as the independent variable. The target population comprised of 108 Nigeria Flour Mill employees in Lagos, Kaduna and Kano branches in Nigeria. Stratified sampling was used to divide the population into two strata. Descriptive statistics was utilized as a data analysis tool. The demographic profiles of the respondents were analyzed using percentages and frequencies. Inferential statistics such as correlation and regression analysis established the relationship between dependent and independent variables. The study concluded that effective performance management practices gives employees opportunity to express their ideas and expectations for meeting the strategic goals of the company. Performance management practices could be an effective source of management information and renewal. The use of reward system has been an essential factor in any company’s ability to meet its goals. Effective feedback on performance measurement may translate to improved employee productivity. Feedback enables the employees to be made aware of what exactly is expected from them. The study recommends that the performance management practices should be optimized to improve employee performance. Performance reviews should be focused on the contributions of the individual employees to meet the organizational objectives.
1.1 Background of the Study
Organizations are run and steered by people. It is through people that goals are set and objectives are accomplished. The performance of an organization is thus dependent upon the sum total of performance of its members. The success of an organization will therefore depend on its ability to measure accurately the performance of its members and use it objectively to optimize them as a vital resource (Biswajeet, 2009).
In the present highly competitive environment, organizations have to ensure peak performance of their employees continuously in order to compete and survive at the market place effectively (Prasad, 2005). Performance of an individual can be defined as the record of outcomes produced as specified job functions or activities during a specified time period (Bernardin, 2007). It can also be seen as a set of outcomes achieved during a certain period of time and does not refer to the traits, personal characteristics, or competencies of the performer.
Performance management on the other hand can be defined as a systematic process for improving organizational performance by developing the performance of individuals and teams (Armstrong, 2012). According to Briscoe and Claus (2008) performance management is the system through which organizations set work goals, determine performance standards, assign and evaluate work, provide performance feedback, determine training and development needs and distribute rewards. Performance management is a process involving performance planning, performance managing, performance appraisal, performance rewarding and performance development (Deb, 2009). Performance appraisal can be defined as the formal assessment and rating of individuals by their managers (Armstrong, 2012).
Performance appraisal as an element of performance management is often carried out to reveal individual employee’s contribution to the overall organizational objectives. To drive this notion home Biswajeet (2009) asserted that people do not learn unless they are given feedback on the results of their actions. For corrective actions to take place feedback must be provided regularly and it should register both successes and failures. The purpose of appraisal at Nigeria Flour Mill is for annual performance review done once every financial year (Nigeria Flour Mill, 2015).
1.2 Problem Statement
The process of managing the performance of employees in an organization is often vague, the areas of performance for which an individual is responsible are often unclear and evaluations are often not based on actual performance but on the perceptions and judgment of an employee’s immediate boss. Therefore, an ill-conceived and ill-considered performance management system could create tensions in the organization.
The process of measuring and subsequently actively managing organizational and employee performance in order to improve organizational effectiveness is currently seen as critical to the onward survival and development of organizations (Inyang, 2008). It may be positively dangerous simply to copy schemes used in other organizations, and worse still to copy methods simply because it is the managerial fashion (Agarwal, Angst and Magni, 2009). It is on this background that this research seeks to examine the effect of performance management on employee performance with a special reference to Nigeria Flour Mills PLC.
1.3 General Objective
The primary aim of the study is to examine the effect of performance management on employee performance.
1.4 Specific Objectives
The study was guided by the following research objectives:
1.4.1 To investigate the influence of performance appraisals on employee productivity in Nigeria Flour Mill.
1.4.2 To determine the influence of reward systems on employee productivity in Nigeria Flour Mill.
1.4.3 To examine the influence of performance feedback on employee productivity in Nigeria Flour Mill.
1.5 Significance of the Study
This study would contribute to the wealth of knowledge by focusing on an organization within Nigeria. The results of this study will be useful to the following stakeholders:
1.5.1 Academicians and Researchers
This study will add to the body of knowledge on performance management and particularly as regards the Nigerian case. The information on the subject of performance management and productivity is scanty and many sources do not offer current information therefore this research will play a crucial role in providing current information.
1.5.2 Policy Regulators
Policymakers and stakeholders in the human resource management function such as government and employer organizations such as Federation of Nigeria Employers (FKE) can use the findings of this research to formulate policies and procedures and devise best in class methods of increasing employee productivity from the findings of this case study. The findings can also be used in formulating performance management systems. The study will provide the human resource departments with an assessment of the performance management tools and provide a basis for improvement and also provide constructive feedback on how best to attain organization goals and objectives.
1.6 Scope of the Study
The study focused on the effect of performance management practices at Nigeria Flour Mill on the employee’s productivity. It specifically sought to determine the effects of performance appraisal, performance reward and performance feedback on employee’s productivity. The geographical boundary of the research was three Nigeria Flour Mill stations in Lagos, Kaduna, and Kano. The study focused on the management and non-management staff of the three regions. A census of 108 employees was used for the investigations. The study was conducted between June to August 2015.
1.7 Definition of Terms
1.7.1 Employee Performance
Employee performance refers to their output at a minimal cost from the use of their technical skills, raw materials in carrying out work responsibilities. In this case, employee performance is directly linked with appraisal, rewards and feedback (Mwanje, 2010).
1.7.2 Employee Productivity
Productivity can be defined as “quality or volume of the major product or services that an organization provides” (Moorhead & Griffin, 2012).
This refers to the information reflecting past performance and results and given by the manager to the employee (Solmon & Podgursky, 2010).
1.7.4 Performance Appraisal
Performance appraisal is where a superior evaluates and judges the work performance of subordinates (Harter, Schmidt & Hayes, 2012).
1.7.5 Performance Management
Performance management practice is a systematic way of communicating to employees on what they are expected to do and what the performance and productivity parameters (Marsor, 2011).
1.7.6 Performance Management Practice
Performance management practice as a systematic way of communicating to employees on what they are expected to do and what the performance and productivity parameters are (Marsor, 2011).
1.8 Chapter Summary
Chapter one provides the back of the study in relation to the performance management practices. The section is broken down into other sections such as problem statement, general objectives, specific objectives, importance of the study, scope of the study and ends with the definition of terms. Chapter two is on the review of the literature in regards to the raised research objective. Chapter three outlines the research methodology and the steps of how the study was carried out. Chapter four presents the outcome of the research findings. Chapter five is on the research summary, discussion, conclusion and recommendations in regards the findings of the study.
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