CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND
OF THE STUDY

In every business
organization including Nigerian Bottling Company, the performance of the
employees is important in achieving organizational goals.

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.

Performance appraisal
is defined as a structural formal interview between subordinate and supervisor,
that usually takes the form of periodic interview (annually or semi-annually),
in which the work performance of the subordinate is examined and discussed,
with the view of identifying the weaknesses as strengths as well as
opportunities for improvement and development.

The essence of
performance for most organizations is delivering products and services that
meet or exceed customer expectations, thereby creating a competitive advantage
so that customers are retained and market share is increased (Sasson, Alvero
& Austin, 2006). Another view is that a performing business is one that
maximizes shareholder value, thus maximizing the difference between input costs
and revenue (Copeland, 1994). This is often a controversial statement since
organizations in Europe and Japan expect a balance between all the stakeholders
(Copeland, 1994:97), and is supported by the view of Neely, Adams and Kennerley
(2002) as part of their Performance Prism which includes all the stakeholders
and not only the shareholders.

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.

Without a good
product to sell, problems in an organization are bound to rise.

It is a structural
formal interview between subordinate and superior that usually takes the form
of periodic interview (annually or semi-annually) in which the work performance
of the subordinate is examined and discussed, with the view to identifying the
weakness and strength as well as opportunity for skills and development
(Decenzo and Robbins, 1995: 358).

Performance refers to
the degree of accomplishment of the task that makes an employee’s job. It reflects
how well employee is fulfilling the requirement of the job.

1.2 STATEMENT
OF THE PROBLEM

In Nigeria most of
the performance appraisal exercise/program is not well managed. Management of
organization tends to view it as a punitive measure. This makes it lose its
objectives and goals. Performance appraisal no longer seek to actualize its
objective of correcting deviations, hence increasing productivity and jettison
all hindrances that tends to hinder productivity. But it is being used as a
tool for subordination oppression, victimization and exploitation.

Most organizations in
the competitive market fail since their workers perform below standard for they
are not encouraged to work harder. Managers and employees are the life blood of
every business organization. If management does not invest much into the
welfare of their workers, problems are bound to rise leading to industrial
strike actions, low commitment to work, low morale and low productivity of
goods and services.

Attractive appraisal
systems are established by some business organizations to help motivate their
employees to strike hard to be recognized and rewarded. Once employees are
motivated, their performance reflects on productivity. Employees strive hard by
pooling together skills, knowledge and efforts to achieve maximum output. Hence
the essence of this paper is to find out the part played by performance
appraisal.

1.3 OBJECTIVES
OF THE STUDY

The aims of this
study are;

1.    
Investigate the effectiveness of performance appraisal technique in an
organization.

2.    
Examine the usefulness of performance appraisal programme

3.    
To examine the ways in which performance appraisal has impacted employees
performance

4.    
To examine the relationship between performance appraisal and employees’
productivity

5.    
To help managers review past performance and improve current performance.

1.4 RESEARCH
QUESTION

1.    
Does performance appraisal have positive impact on employees’ performance?

2.    
How often are employees appraised at the work place?

3.    
Is performance appraisal an ongoing process in the company?

4.    
Is feedback information received after performance appraisal?

5.    
Is performance appraisal helpful in identifying strengths and weaknesses?

1.5 RESEARCH
HYPOTHESES

HYPOTHESIS I

Ho: Performance
appraisal does not have impact on employees’ performance.

Hi: Performance
appraisal has impact on employees’ performance.

HYPOTHESIS II

Ho: There is no
significant relationship between performance appraisal and workers’
productivity.

Hi: There is a
significant relationship between performance appraisal and workers’
productivity.

1.6
SIGNIFICANCE OF THE STUDY

The findings of the
study will not only be beneficial to the personnel of the chosen organization
for the study, which is Nigerian Bottling Company Plc, Benin City, but also to
every individual. It will also help managers in other organizations in setting
goals and targets for employees to achieve through proper supervisory control
by line managers.

Aid in identifying
and improving the training and development needs of workers.

Assist in motivating
employees who contribute effectively to the attainment of organizational goals
and objectives.

Help managers to know
how to appraise the performance of their workers.

1.7 SCOPE OF
THE STUDY

This research work is
limited the impact of performance appraisal on workers performance and in turn
leading to organizational performance and productivity, using Nigerian Bottling
Company Plc, Benin City. This therefore means that the study area in which data
were obtained is Nigerian Bottling Company Plc, Benin City.

1.8 LIMITATION
OF THE STUDY

There is no gain
saying that there are no limitations in research work generally. Any
shortcoming that arises in this study is as a result of factors which are
beyond the researcher’s control.

Therefore, it will be
of more importance to highlight certain militating factors that tend to narrow
or limit my scope of study. This project research would have been easier if not
for these limitating factors:

1.     Time factor: time
was not on the researchers to consult various sectors of the economy to review
employees or given out questionnaire to various institutions on the effect of
government revenue policies.As we all know, time is never our friend. The time
scheduled for the completion of this research thesis was too short. As a
result, generating information/data was strenuous as it coincides with final
year examination period, which needed attention.

2.     Finance: this
is another barrier that limited the researcher’s work.

1.9 DEFINITION
OF TERMS

Appraisal: A
formal assessment, typically in an interview, of the performance of an employee
over a particular period.

Human
recourses: These are human beings used in
the production process. They could still be called employees or provide of
labour.

Compensation:   
This is the reward or payment gain to the provider of labour.  A labourer
disserves his wages.  Compensation could also be retired to as
remuneration.

Separation: This
is a process whereby an employee is returned to the wider society from where he
was taken from, probably as a result of old age, non-performance or misconduct

Job
evaluation:   This is the systematic
method of appraising the work of each job in relation to other jobs in the
organization.

Equity: A
stock or any other security representing an ownership interest. On a company’s
balance sheet, the amount of the funds contributed by the owners (the
stockholders) plus the retained earnings (or losses). Also referred to as
“shareholders’ equity”.

Effectiveness: Effectiveness is
the capability of producing a desired result. When something is deemed
effective, it means it has an intended or expected outcome, or produces a deep,
vivid impression.

Efficiency: 
A level of performance that describes a process that uses the lowest amount of
inputs to create the greatest amount of outputs. Efficiency relates to the use
of all inputs in producing any given output, including personal time and
energy. 

Employee:
These are workers employed to perform jobs in an organization under an
obligation, which they expect income as exchange for effort contribution to the
growth of the organization.

Employers:
They are the employer of labour, who might therefore be said the controller of
the activities of the establishment.

Exploitation:
The process of being able to use a company’s natural resources such as adverts,
covering of event, publicity of event for the attainment of profit
maximization.

Management:
Is the effectiveness and optimum used of human and material resources to
achieve a goal.

Responsibility:
Is a person who is reliable and able to carryout various duties imposed on
him/her by the establishment.

Strength:
These are factors in the environment that place the organization at a
advantages over its competitors

Selection:
Is the process of identifying the most suitable applicant and persuades him/her
for employment.

Training: Training is
the acquisition of knowledge, skills, and  competencies as
a result of the teaching of vocational or practical skills and
knowledge that relate to specific useful competencies. Training has specific
goals of improving one’s capability, capacity,
productivity and performance.

Weakness:
This is the low level of performance in an establishment which hinders its
growth.

Evaluation:        
Evaluation is a systematic determination of a subject’s merit,
worth and significance, using criteria governed by a set of standards. It
can assist an organization, program, project or any other intervention or
initiative to assess any aim, realizable concept/proposal, or any alternative,
to help in decision-making; or to ascertain the degree of achievement or value
in regard to the aim and  objectives  and results of any such action
that has been completed. The primary purpose of evaluation, in addition to
gaining insight into prior or existing initiatives, is to enable
reflection and assist in the identification of future change.

1.10 HISTORICAL PROFILE OF NIGERIAN
BOTTLING COMPANY (NBC)

The Nigerian Bottling
Company Ltd is one of the biggest companies in the non-alcoholic beverage
industry in the country and is the sole franchise bottler of The Coca-Cola
Company in Nigeria.

The company serves
approximately 160 million people by producing and distributing a unique
portfolio of quality brands, bringing passion to marketplace implementation,
and demonstrating leadership in corporate social responsibility.

NBC Ltd started
operations in Nigeria in 1951. Based in the city of Lagos, they operate 13
bottling plants across the country. In addition, they channel products through
59 warehouses and distribution centers.

The company employs
about 4,800 people and indirectly supports the jobs of up to more than a
million more in our value chain.

The company aims to
be our customers’ most preferred supplier, and conduct programmes to support
more than 450,000 customers who sell our products to consumers.

The company is part
of the Coca-Cola Hellenic Group, one of the largest bottlers of the Coca-Cola
Company’s products in the world, and the biggest in Europe. Coca-Cola Hellenic
operations span 28 countries, serving more than 570 million people. The company
is headquartered in Athens and listed on the Athens, New York, and London stock
exchanges.

The company produces,
sells and distributes a wide range of beverages, most of which are trademark
products of the Coca-Cola Company. The company product’s portfolio consists of:

•       
Leading brands Coca-Cola, Coca-Cola light, Fanta and Sprite

•       
Local brands such as Schweppes, Five Alive, Limca and Eva

The company continuously
reviews opportunities to expand our product portfolio in order to offer
consumers in Nigeria an increasing range of choices. Every measure is taken to
ensure that The company’s products are of the highest quality.

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