University of Ghana http://ugspace.ug.edu.gh UNIVERSITY OF GHANA PERFORMANCE APPRAISAL AND EMPLOYEE PERFORMANCE IN PUBLIC ORGANISATIONS: A CASE OF THE SOCIAL SECURITY AND NATIONAL INSURANCE TRUST, GHANA BY: PATRICIA AKOSUA SEFAKOR YIGAH (10598579) A LONG ESSAY SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF PUBLIC ADMINISTRATION (MPA) JUNE 2018 University of Ghana http://ugspace.ug.edu.gh DECLARATION I do hereby declare that this work is the result of my own research and has not been presented by anyone for any academic award in this or any other University. All references used in the work have been fully acknowledged. I bear sole responsibility for any shortcomings. …………………...………………………… ……………………………………… PATRICIA AKOSUA SEFAKOR YIGAH DATE (10598579) i University of Ghana http://ugspace.ug.edu.gh CERTIFICATION I hereby certify that this research was supervised in accordance with procedures laid down by the University. …………………………………………… ……………………………. PROF. JUSTICE NYIGMAH BAWOLE DATE (SUPERVISOR) ii University of Ghana http://ugspace.ug.edu.gh DEDICATION I dedicate this piece of work to my guardian, friend, and mentor, Mr. Francis Komla Ganyaglo Ho Technical University for his wonderful support throughout this programme. iii University of Ghana http://ugspace.ug.edu.gh ACKNOWLEDGEMENT I am greatly indebted to my supervisor, Prof. Justice Nyigmah Bawole for his mentorship, guidance and support throughout his supervision of this work. I am most grateful. My sincere gratitude also goes to Mr. Francis Komla Ganyaglo of Ho Technical University, Mr. Glory Bani of State Transport Corporation Ms. Janet Dunyo of Ho and Mr. Peter Doe Ahadzi of SSNIT and all my family and friends for their thoughtful contributions and inspiration. My profound appreciation goes to all the staff of SSNIT who despite their busy work schedule responded to my interviews and provided relevant information to the study during data collection stage. My sincere thanks to them all. iv University of Ghana http://ugspace.ug.edu.gh TABLE OF CONTENTS DECLARATION ....................................................................................................................... i CERTIFICATION ................................................................................................................... ii DEDICATION ........................................................................................................................ iii ACKNOWLEDGEMENT ...................................................................................................... iv LIST OF FIGURES ................................................................................................................ ix LIST OF TABLES ....................................................................................................................x LIST OF ABREVIATION ...................................................................................................... xi ABSTRACT............................................................................................................................ xii CHAPTER ONE .......................................................................................................................1 INTRODUCTION .....................................................................................................................1 1.1 Background of the Study ..................................................................................................1 1.2 Problem Statement ...........................................................................................................2 1.3 Purpose of the study .........................................................................................................4 1.4 Research Objectives .........................................................................................................4 1.4.1 General Objectives ........................................................................................................4 1.4.1 Specific Objectives .......................................................................................................4 1.5 Research Questions ..........................................................................................................5 1.6 Significance of the Study ..................................................................................................5 1.7 Scope and Limitations of the Study ..................................................................................6 1.8 Organization of the Study .................................................................................................6 CHAPTER TWO ......................................................................................................................8 LITERATURE REVIEW .........................................................................................................8 2.1 Introduction ......................................................................................................................8 v University of Ghana http://ugspace.ug.edu.gh 2.2 Employee Performance .....................................................................................................8 2.3 Performance Appraisal .....................................................................................................9 2.3.1 The Performance Appraisal System ............................................................................. 10 2.3.2 The Effect of Performance Appraisal on Employee Effectiveness ............................... 12 2.3.3 Challenges in Implementing Performance Appraisal ................................................... 14 2.4 Conceptualizing Public Organisation and Management .................................................. 15 2.4.1 Public sector performance measurement...................................................................... 15 2.4.2 Performance appraisal in public organisation .............................................................. 16 2.5 Theoretical Framework ................................................................................................... 17 2.5.1 Goal Setting Theory .................................................................................................... 18 2.5.2 Expectancy Theory ..................................................................................................... 19 2.6 Conclusion and Research Gap ........................................................................................ 20 CHAPTER THREE ................................................................................................................ 21 METHODOLOGY .................................................................................................................. 21 3.1 Introduction .................................................................................................................... 21 3.2 Research Approach ......................................................................................................... 21 3.3 Research Design ............................................................................................................. 21 3.4 Population ...................................................................................................................... 22 3.5 Sampling Technique ....................................................................................................... 22 3.6 Sample Size .................................................................................................................... 23 3.7 Sources of Data .............................................................................................................. 24 3.8 Data Collection Instruments ........................................................................................... 24 3.9 Data Collection Procedure .............................................................................................. 25 3.10 Data Analysis ................................................................................................................. 25 CHAPTER FOUR ................................................................................................................... 27 vi University of Ghana http://ugspace.ug.edu.gh DISCUSSION OF STUDY FINDINGS .................................................................................. 27 4.0 Introduction .................................................................................................................... 27 4.1 Brief profile of case study organization........................................................................... 27 4.2 Performance appraisal system ......................................................................................... 29 4.2.1 Knowledge of the performance appraisal system ......................................................... 29 4.2.2 The nature of performance appraisal ........................................................................... 30 4.2.3 Fairness and clarity of the process ............................................................................... 33 4.2.4 Managing employee grievances .................................................................................. 34 4.3 Effect of performance appraisal on employee performance ............................................. 36 4.3.1 Client Satisfaction ....................................................................................................... 37 4.3.2 Increased Internally Generated Funds .......................................................................... 39 4.3.3 Market Share............................................................................................................... 40 4.3.4 Reward and sanctions .................................................................................................. 41 4.3.5 Staff Training and Career Development ...................................................................... 42 4.4 Challenges to the Implementation of Performance Appraisal System .............................. 44 4.4.1 Network Connectivity and User Challenges ................................................................ 44 4.4.2 Socio-Cultural Variables ............................................................................................. 45 4.4.3 Administrative Challenges .......................................................................................... 46 4.5 Summary ........................................................................................................................ 48 4.6 Conclusion ..................................................................................................................... 49 CHAPTER FIVE..................................................................................................................... 51 SUMMARY, CONCLUSION AND RECOMMENDATION ................................................ 51 5.0 Introduction .................................................................................................................... 51 5.1 Summary of the Study .................................................................................................... 51 5.2 Conclusion ..................................................................................................................... 52 vii University of Ghana http://ugspace.ug.edu.gh 5.3 Recommendations .......................................................................................................... 53 REFERENCES: ...................................................................................................................... 55 APPENDICES ......................................................................................................................... 60 viii University of Ghana http://ugspace.ug.edu.gh LIST OF FIGURES Figure 1: Conceptual framework of performance appraisal and employee performance ………… 11 ix University of Ghana http://ugspace.ug.edu.gh LIST OF TABLES Table 3.1: Distribution Schedule ……………………………………………………………………………………………….…… 23 x University of Ghana http://ugspace.ug.edu.gh LIST OF ABREVIATION PA - Performance Appraisal SSNIT - Social Security and National Insurance Trust KTDA - Kenya Tea Development Agency NPM - New Public Management GST - Goal Setting Theory SIC - State Insurance Corporation OPMS - Oracle Performance Management System xi University of Ghana http://ugspace.ug.edu.gh ABSTRACT Performance appraisal is a formal, structured system of measuring and evaluating an employee‟s job, related behaviors and outcomes to discover how and why the employee is presently performing on the job. It presents the organization with how the employee can perform more effectively in the future so that the employee, organization and society all benefit. This makes it an essential tool for enhancing organizational performance. Although performance appraisal has extensively been studied in both, private and public sector organizations, there is limited knowledge on how this tool is applied to enhance organizational performance in public organizations that are engaged in the provision of social services. This study attempts to respond to this gap with a case study from the Social Security and National Insurance Trust (SSNIT) of Ghana. Employing a qualitative case study design, this research interviews 12 staff made up of Human Resource Officials, Departmental Heads and other mid and lower level officers of SSNIT using the purposive sampling technique. From a thematic content analysis, this research found an online-based „management by objective‟ performance appraisal system called the Oracle Performance Management System, which management use to set performance targets from the national level. These targets help the appraisers to easily determine areas of success or failure of employees‟ performance. The study established five key performance indicators: satisfaction, information-based rewards and sanctions, improved internally generated funds, and employee training strategic plan and talent development as peculiar to a service oriented public organization like the SSNIT. However, these variables were critically challenged by administrative laxities, internet-network connectivity problems, and socio-cultural variables. The study makes specific relevant recommendations to improve the effectiveness in the current system towards achieving the primary goal of enhancing organizational performance. xii University of Ghana http://ugspace.ug.edu.gh CHAPTER ONE INTRODUCTION 1.1 Background of the Study Performance “appraisal is a formal, structured system of measuring and evaluating an employee‟s job, related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization and society all benefit (Levy & Williams, 2004). Performance Appraisal (PA) is a part of the process of guiding and” managing career development in both private and public sectors. Organizations and human resources practitioners have viewed the practice as an effective tool for human resources management. The practice involves the task of obtaining, analyzing and recording information about the relative worth of an employee to the organization (Akinbowale, Lourens and Jinabhai, 2013). “Performance appraisal has increasingly become part of a more strategic approach to integrating human resource activities and business policies and is now seen as a generic term covering a variety of activities through which organizations seek to assess employees and develop their competence, enhance performance and distribute rewards” (Kimutai and Wanjala, 2015). The quest of every organization is to develop, motivate and increase the performance of their employees through a variety of ways including the use of performance appraisal (Gungor, 2011). Similarly, organizations in recent times “seek to determine the reasonable balance between employee productivity and performance of the organization. Reward and recognition programs serve as the most contingent factors that can ensure a number of organizations realize the productivity of their employees” (Molle, Mulongo and Razia, 2017). This may be attributed to 1 University of Ghana http://ugspace.ug.edu.gh the fact that employee performance is strongly associated with organizational performance. Thus, an effective and efficient employee performance will positively influence organizational performance (Zhang, 2012). According to Molle, Mulongo and Razia (2017), human resources are the most valuable assets in an organization and as such when effectively managed, can contribute significantly to employee performance. In addition, PA provides feedback to employees and thereby serves as a vehicle for personal and career development (Adofo, 2011). However, “performance appraisal has positive and negative impacts. Thus, employees who receive a good score on their appraisal are generally motivated to perform well and maintain their performance. Positive feedback on appraisals gives employees a feeling of worth and value, especially when accompanied by salary increases (Rudman, 2003). Likewise if a supervisor gives an employee a poor score on his/her appraisal, the employee may feel a loss of motivation in the workplace. Consequently, this can impact on the employee‟s performance (Cook and Crossman, 2004: Rudman 2003). This study seeks to investigate the effect of performance appraisal on employee performance.” 1.2 Problem Statement Performance appraisal is regarded as essential to employee effectiveness and as such, managers are reluctant to abandon performance appraisal since they still regard as an essential tool of HR management (Meyer, 1991). Although performance evaluation is important for organizations and employees, a number of challenges characterizes the system of assessment. This includes lack of supervision, in terms of timely completion of appraisal, inadequate training on conducting performance appraisal, as well as lack of management support for the appraisal process (Flaniken, 2009). In the same vein, Sualihu (2014) indicates that performance appraisal 2 University of Ghana http://ugspace.ug.edu.gh is time consuming, requires a lot more resources and usually has low feedback rates. This suggests that to ensure effective performance appraisal, there is the need to make sure of regular feedback, timely completion of performance appraisal, fairness in the appraisal process, effective supervision and provision of resources (Sualihu, 2014). In view of this, the study will look at the impact of performance appraisal on employee performance at a national pensions and insurance trust. This study acknowledges the fact that performance appraisal has extensively been studied in both private and public sector organizations (Wright et al., 2017). However, there appears to be very limited knowledge on the emerging public sector economies (Sosu, 2016; Tutu, 2012). For example, Sosu (2016) conducted a study on the importance of performance management on the effectiveness of employees at Ada East District Assembly of Ghana using a qualitative research method. Tutu (2012) on the other hand focused on the relationship between performance appraisal and employee performance in developing countries using a qualitative research method. These studies performance appraisal no longer seeks to actualize its objective of correcting deviations, but rather, some management officials tends to view it as a disciplinary measure. Thus, it is being used as a tool for subordination, oppression, victimization and exploitation. This makes it lose its objectives and focus. In both cases, however, poor data storage and management systems and access to secondary data posed a research limitation, which makes their findings inconclusive. How is performance appraised in local and central government organizations involved in the provision of social services, particularly the provision of persons and national insurance services? How does outcomes inform future performance of employees? And what challenges confronts the process? Although the literature of performance appraisal abound, knowledge on 3 University of Ghana http://ugspace.ug.edu.gh public sector of emerging economies in their service sector appear limited. This very study attempts to contribute to bridging the literature gap identified. 1.3 Purpose of the study Performance appraisal is essential because it is a significant tool for identifying whether employees are working optimally or are underperforming both in the public sector organizations and to what extent is their performance from organizational goals and objectives. The main aim of the study is to examine the effect of performance appraisal on the performance of employees in a national pensions and insurance service organization. To achieve this aim, the study consequently examines the performance appraisal system being used at Social Security and National Insurance Trust (SSNIT), determined the effect of performance appraisal on employee effectiveness at SSNIT and identified the challenges to the implementation of performance appraisal at SSNIT. 1.4 Research Objectives 1.4.1 General Objectives The main objective of this study is to examine the effect of performance appraisal on the performance of employees at Social Security and National Insurance Trust (SSNIT) of Ghana. 1.4.1 Specific Objectives The following specific objectives are addressed by the study: i. To determine the performance appraisal system being used at SSNIT ii. To “determine the effect of performance appraisal on employee” effectiveness in SSNIT 4 University of Ghana http://ugspace.ug.edu.gh iii. To determine the challenges to the implementation of performance appraisal in SSNIT 1.5 Research Questions This study attempts to answer the following research questions: i. What is the performance appraisal method or system used at SSNIT? ii. What is the effect of performance appraisal on employee‟s effectiveness in SSNIT? iii. What are the challenges to the implementation of performance appraisal in SSNIT? 1.6 Significance of the Study Performance appraisal is necessary for an effective public personnel management and strategy as well as employee development in public sector organizations. Thus, the study will inform public policies on public personnel management and practices towards an enhanced national pensions and an insurance service delivery by SSNIT. Other stakeholders may also find the research findings helpful and inform their decisions towards effective performance appraisal methods that will elicit improved performance of their employees, which will in turn improve productivity and growth for the organizations. Similarly, the results of the study bring to bare the challenges associated with the implementation of performance appraisal in the public sector so that management can take steps to mitigate them. The study will also contribute to the existing body of knowledge on performance appraisal in emerging public sector economies particularly with the narrative from the Ghanaian context. The study will further serve as a reference source for other students and researchers who wish to conduct further research on this topic. 5 University of Ghana http://ugspace.ug.edu.gh 1.7 Scope and Limitations of the Study This study does not claim to be exhaustive. It is limited to performance appraisal in Ghana public sectors. Although, there are many public institutions in Ghana that could have been added to the study to make a better generalization, resource: budget and time constraints confined this study to Social Security and National Insurance Trust (SSNIT). Thus, some personal and financial challenges posed major hindrances to the course of this study. Time factor can also presented great challenge to the research. In addition, there are several branches of SSNIT but the study focused on two branches in Greater Accra. In the course of information gathering, the researcher encountered many problems including the reluctance of workers to provide clear and precise answers/information touching seemingly sensitive issues. Further, the study limits its sample 12 respondents out of the about 120 staff population at two main branches, from which findings were generalized. In the midst of these limitations, however, the researcher employed all necessary, effective and efficient means to arrive at reliable findings for informed decision- making on public sector performance appraisal. 1.8 Organization of the Study The research comprises five chapters. The first chapter presents the introduction to this research work. It includes the background of the study, problem statement, and purpose of the study, research objectives and research questions, significance of the study, scope and limitation, and the chapter disposition. The second chapter is the literature review. It deals with a review of the various existing boding of knowledge on the literature of performance appraisal and public management that are relevant to this study. Chapter three is the methodology. This chapter includes the research approach and design, background of case study organization, population 6 University of Ghana http://ugspace.ug.edu.gh (unit of analysis), sampling technique and size, data collection instruments and procedures as well as the data management and analysis procedure. The fourth chapter presents the results and discussion. It focuses on the analyses and presentation of the data obtained. The fifth chapter will focus the summary, conclusion and recommendations for this study. 7 University of Ghana http://ugspace.ug.edu.gh CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter presents a review of various existing boding of knowledge on the literature of performance appraisal and public performance management that are relevant to this study. Such information will be essential to inform the ready about prior knowledge on the subjective understanding and discussion of the findings in the subsequent chapters. Conceptual issues discussed here include employee performance and performance appraisal, performance appraisal system, and a conceptualization of public organization and management. This study also focuses on public sector performance measurement and related performance appraisal systems. Challenges confronting public sector performance appraisal systems are also reviewed. These consist of secondary data gathered from books, credible peer reviewed journals, institutional and evaluation reports among other sources. The chapter consists of definition of terms, theoretical and empirical review, and conceptual and analytical framework for the study. 2.2 Employee Performance An organization‟s sole aim is profitability thus every member of the organization is expected to put in their quota to achieve that aim. “An effective employee is a combination of a good skill set and a productive work environment” yet some organizations find themselves giving more to the employees and receiving little or nothing in the end thus there is the need to look into the performance of employees in the organization (Gungor, 2011). According Noordzij (2013), the effectiveness by which organizations, manage, develop and stimulate their employees is a 8 University of Ghana http://ugspace.ug.edu.gh significant cornerstone for performance of the organization since the management of people has a vital effect on performance. Thus, the way people behave contributes to the goals and objectives the organization. Ferguson (2017) defines employee performance as the provision of constructive feedback on whether an employee is under performing, meeting, or exceeding the goals and objectives of their job as well as the organizations‟ goals and objectives. These feedbacks are needed by the employees to make them confident about their job descriptions, what is expected and how and where it can be improved. According to Moore (2017), employees are rated on how their jobs match up with the set of standards by the employee. In other words, an employee is expected to work in order to meet up the performance criteria of the organization. Moore (2017) further indicated that employee performance is the related job activities that are expected of a worker and how these activities are properly executed by the worker. An employees‟ performance can be attributed to a number of factors which include motivation, managerial standards, commitment from the management and employee evaluation [feedback] (Root, 2017). Similarly, measuring the performance of employees is very important in an organization as poor performance is detrimental to an organizations‟ progress (Sahoo & Mishra, 2012). 2.3 Performance Appraisal It is important for an organization to access the performance of the staff in order to ascertain whether the objectives of the organization are being met or not (Levy & Williams, 2004). Thus, there is the need for performance appraisal. Performance appraisal is the evaluation of the performance of employees in a systematic order as well as understanding the abilities of an individual for further growth and development (Adofo, 2011). Performance appraisal can also be 9 University of Ghana http://ugspace.ug.edu.gh defined as “formal, structured system of measuring and evaluating an employee‟s job, related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization and society all benefit” (Levy & Williams, 2004). The objective of performance appraisal is for record keeping, which helps in determining wage structure, compensation package, and salaries raises among others, identifying the strengths and weaknesses of the staff, maintaining and assessing the potential in an individual for future growth and development. It also serves as a base for influencing working habits of the employees as well as reviewing and retaining promotional and other training programs (Akinbowale, Lourens and Jinabhai, 2013). Performance appraisal comes with a lot of advantages for both the employer and employees. These advantages include helping the supervisor identify workers who deserve to be promoted and those who must be dismissed, demoted or quarried. It also include drawing out compensation packages (bonus, high salary rate, allowance, extra benefits, etc.) for employees, coming up with training policies and programs aimed at the development of staff, serving as motivational tool and communication tool between the employer and the employees as well (Molle, Mulongo & Razia, 2017). 2.3.1 The Performance Appraisal System The evaluation and measurement of an employee‟s achievement and behaviors is known as performance appraisals. Thus in order to effective conduct a performance appraisals on employees, organizations must use system. Performance appraisal system can be defined as an appropriate method used to evaluate and assess the performance of employee (Mayhew, 2017). There are types of performance appraisals and they are behavioral checklist, 360 degree 10 University of Ghana http://ugspace.ug.edu.gh appraisal, management by objective and psychological appraisals. According to Telem (2014), behavioral checklist focuses on a list of criteria that an employee is expected to workup to be a diligent worker. This system is considered favorable because evaluation is done based on an individual employee performance and not based on comparison. Figure 1: Conceptual framework of performance appraisal and employee performance Source: Adapted from Telem (2014) The 360 degree appraisal deals with feedback of the manager, supervisor, team members and any form of direct report. This system includes the collection and assessing of a complete profile of the employee for appraisal, evaluation of the employees work performance and technical skills and the collection of an in-depth feedback of the employee by the appraiser. The management by objective entails an agreement between the manager and the employee upon specific and obtainable goals with a set deadline. This method helps the appraiser to determine the success or failure of the employee easily. The psychological appraisal evaluates the intellect, emotional 11 University of Ghana http://ugspace.ug.edu.gh stability, analytical skills and other psychological traits of the employees. Thus, it is easier for management to place employees in the appropriate teams (Telem, 2014). Other systems identified by performance ranking where employees are evaluated against each other by managers rather than being evaluated based on the organizations‟ goals and objective: combined manager-employer appraisal entails a self-evaluation by the employee and a feedback from the manager in order to construct a balanced performance appraisal. With this method, the employee is granted the opportunity to share any form of accomplishment the manager may have overlook making room for more comprehensive performance appraisal (Mayhew, 2017). 2.3.2 The Effect of Performance Appraisal on Employee Effectiveness Performance appraisal serves as a base for influencing working habits of the employees as well as reviewing and retaining promotional and other training programs which has tremendous effect on employee effectiveness in a firm (Akinbowale, Lourens & Jinabhai, 2013). According to Chaponda (2014), performance appraisal system helps to improve job performance at work. Likewise, “regular assessment of performance leads to employee motivation; performance standards are also quantified and pegged against an individual evaluation which is important for employee motivation. Employees are also motivated if the appraisal process is based on accurate and current job descriptions. Chaponda (2014) further indicated that performance appraisals help in identifying performance problems to improve employee productivity and motivation.” The study aimed at determining the effect of performance appraisal on employee motivation using a survey of slum based NGO in Nairobi. Adopting a descriptive research design with a population of 300 employees of the slum based NGOs; the study employed a stratified method to sample of 12 University of Ghana http://ugspace.ug.edu.gh 171 respondents. The study also used structured questionnaires in data collection and SPSS to analyze the data. A study conducted by Asamoah (2012) on the effects of performance appraisal on employee attitude revealed that performance appraisals have an effect on employees‟ performance. The author indicated that a fair appraisal pleases employees and reflects on their work output. Likewise a poor appraisal makes employees better and it affects their work performance. The study aimed at determining how performance appraisal affects employees‟ attitude and work performance. The study employed a questionnaire during the collection of primary data from employees of First Allied Savings and Loans Limited. Likewise, the population of the study was drawn from management, senior and junior staff from Obuasi and Kumasi branch (Adum, Roman Hill, Suame, and Asafo). The study made use of the entire population. In addition, personal interviews were conducted with the Head of Department of Human Resource Department (Asamoah, 2012). In a similar study conducted by Messah and Kamencu (2011) on the effect of performance appraisal systems on employees in Kenya Tea Development Agency revealed that assessment and development, competence, employee training, management by objective and performance based pay has an effect on employee performance in Kenya Tea Development Agency (KTDA). The study also indicated that performance based pay, and management by objectives are the main factors that have an effect on employee performance in KTDA. This findings implies that the work output at KTDA is as a result of the appraisal systems (performance based pay, and management by objectives) in the company. 13 University of Ghana http://ugspace.ug.edu.gh 2.3.3 Challenges in Implementing Performance Appraisal Even though performance appraisals provide an opportunity for managers and employees to have one-on-one discussions yet it opens an opportunity for biases (Ngumbau, 2013). A study conducted by Ngumbau (2013) on challenges of implementing performance management system at the Kenya Electricity Generating Company (Kengen) Limited revealed that the challenge happens at various levels of the organization. The author indicated that there are poor measures developed in the organization where targets are set yet there are no relevant measures put in place. This discourages the staff from doing their best to reach the organizations‟ goals. A similar study conducted by Chaponda (2014) on the effect of performance appraisal on employee motivation: a survey of slum based non-governmental organizations in Nairobi revealed that management has the tendency to focus on the weaknesses of the employees instead of the strengths and this can create conflict between managers and staffs as well as negative working environment. Other challenges identified by Chaponda (2014) include bias and stereotype. The author indicated that there can be biases (either toward or against something) when it comes to performance assessment and this can make evaluation process subjective instead of objective as well as providing the opportunity for a lack of consistency when it comes to different groups of employees. In case of stereotyping, management makes membership in the group rather than explicitly identifying the characteristics of the individuals. This creates the room for significant error in evaluation (Chaponda, 2014). A study conducted by Asamoah (2012) also revealed that a challenge that faces performance appraisal is favoritism. Due to the lack of feedback concerning work performance, there is bias in the appraisal system. 14 University of Ghana http://ugspace.ug.edu.gh 2.4 Conceptualizing Public Organization and Management A range of governmental services, which include public transportation, health care, public education, and infrastructure, military and police service are described as public organization (Dube & Danescu, 2011). According to Wanjala and Kimutai (2015), public sectors vary among countries due to the legislations that govern the state-owned organizations. These organizations do not only focus on providing services for them but they generally provide services that benefit the entire society. Dube and Danescu (2011) also defined public sector as a section in the economy that is being owned and operated by the government and not by private businesses or individuals. Wanjala and Kimutai (2015) also described public organization as consisting of governments and all publicly controlled or funded agencies, enterprises and other entities that deliver public programs, goods and services. Gungor (2011) indicated that a public sector can be described as any commercial or industrial undertaking owned and managed by the government with the aim of maximizing social welfare and uphold the public interest. The characteristics of public sectors include public welfare, public utility services, government ownership and management, public accountability and excessive formalities (Gungor, 2011). 2.4.1 Public sector performance measurement The historical quest to enhance public sector performance can be linked to the new public management (NPM) regime in the public sector since 1991 when Hood conceptualized the doctrine. The NPM concept basically aimed at enhancing the performance of the public administration through the adoption of private sector management practices. According to Hood (1991), “NPM consists of a number of different doctrines which are blended and mixed 15 University of Ghana http://ugspace.ug.edu.gh according the specific public sector circumstances” (cited in Adcroft & Willis, 2005, p. 387). Such doctrines comprise the overemphasis on “professional” management, the introduction of specific measurement and performance targets, and keen attention on outputs among other private sector management styles such as decentralization of administrative functions, privatization of state enterprises, innovativeness, and the leverage on contemporary information communication technology tools for enhance public service delivery (Hood, 1991). Thus, the NPM generally presents a marriage of business managerialism and administrative reforms. Meanwhile, the idea of performance measurement through the perspective of private sector principles and practices is considered a recent idea. Traditionally, independent national audit agencies and committees were used to assess the performance of public sector organizations. Their focus was mainly to monitor compliance with financial management and other rules of operating procedures. Adcroft and Willis (2002) also observe an instance where public sector performance practices are being adopted internationally from so called „well-performing countries.” The practice of transfer is argued by Drucker (1995) as benchmarks built on the assumption that “what one organization does, any other organization can do as well”. Till date, this appears to be in existence and as the rationale built around measuring existing performance, without necessarily paying great attention to their different contextual and industrial feature of even different expected performance outcomes (not just outputs) in the future. 2.4.2 Performance appraisal in public organization Armstrong and Baron (1998) viewed that it is hard to measure performance that cannot be defined. This has been a challenge among public sector organizations managers due to the overwhelming arguments of contemporary performance indicators: results or behavior. Whilst 16 University of Ghana http://ugspace.ug.edu.gh the history of public sector performance emanates from the NPM doctrine which focus on results and outputs (Hood, 1991), emerging literature on public value suggest that performance of public sector goes beyond mere output to long term outcomes and impact of actions and inactions of public officers on the entire citizens (Moore, 1995). Public sector performance is a multidimensional and faceted construct. Hence, its measurement depends on a variety of factors that comprise it (Fitzgerald and Moon, 1996). For example, some scholars like Rogers, (1994) argue that performance in this context should be defined as outcomes of work since it provides strongest links to the strategic goals of public organizations, their customers‟ satisfaction and other economic values. Without distinction between or specification of performance measurement variables, efforts of promoting public sector performance would be a myth and waste of resources. It is therefore important to specify and define performance variables to measurement and evaluation process. The devices to be used to measure performance also need to be spelt out clearly. For the performance of this research, such relevant performance measurement variables are also explored from the selected case study organization. 2.5 Theoretical Framework A review of prior studies on organizational and employee performance literature has witnessed the application of numerous theories and models. Examples of such studies include systems- based framework (Mwita, 2000), the goal setting theory (Locke, 1968), and Expectancy Theory (Vroom, 1664) among others. However, with respective to public sector performance and performance appraisal, this particular study compliments the Goal Setting Theory with the Expectancy Theory. 17 University of Ghana http://ugspace.ug.edu.gh 2.5.1 Goal Setting Theory The goal setting theory (GST) was propounded by Edwin Locke in the year 1968. The theory gives emphasis to the relationship between goals and performance. In other words, the GST suggests that establishing individual goals plays a vital role in the motivation for superior performance. The reason for this theory is that, in terms of organizations and management practice, goals have an inescapable impact on the behavior and performance of employees and employers alike. Locke (1968) further proposed five basic principles of goal-setting: clarity, challenge, commitment, feedback, and task complexity. From these principles, Locke revealed that an individual who sets specific and difficult goals tends to perform well than an individual who sets general and easy goals. Thus in cases where goals are not achieved the individual either modifies the goals or improves performance in order to make the goals more realistic. Likewise in a case where performance of the employee is improved, the aim of the performance management system is also improved and achieved (Salaman, Storey & Billsberry, 2005). On the other hand, organizational goals are not always the same as individual goals and this may lead to conflict of interest. Likewise, individuals may want to take risky actions in the bid to attain their goals which may cause loss or harm to the organization (Fusion, 2017). Even with these challenges associated with GST, the theory serves as a map for direction. Goals serve as guides to an organization and its employees in everyday decision-making processes. Other benefits include facilitating planning, motivating employees, limiting stress and leading to quicker results (Joseph, 2017). Relating the goal theory to the current study, since employees are mostly motivated by goals and feedback, an individual must set goals on subsequent performance to help improve upon the current as well as future performance. Setting goals helps the individual to know if there are any 18 University of Ghana http://ugspace.ug.edu.gh improvements, stagnation or decline in performance. In addition, the organizations are to make sure individual goals are in line with the goals of the organization as this makes meeting the main target of the organization easy, less stressful and produce quicker results. In other words, goal setting serves as a catalyst for better performance and managers in organizations benefit from this as individuals put in much effort that leads to an improvement on the job. In this study, the researcher assess the extent to which performance goals are set to guide daily employee task performance in public sector service oriented organizations such as the national pensions and insurance scheme. The study assesses how it also guides strategic public personnel management, motivates public servants and manages stress towards performance outcomes. The Expectancy Theory complements the Goal Setting Theory. 2.5.2 Expectancy Theory Victor Vroom proposed the expectancy theory in the year 1664. The theory is based on the hypothesis that an individual adjust his or her behavior in the organization based on the anticipated satisfaction of the value goals they set. Thus, the theory assumes that an employees‟ performance is based on factors like skills, experience, personality, abilities and knowledge (Salaman et al, 2005). The theory indicates that employees in an organization may be motivated when they believe putting in much effort will yield better job performance and output and these job performances can lead to organizational rewards like an increase in salary or bonuses. Noordzij (2013) indicated that, the effectiveness by which organizations, manage, develop and stimulate their employees is a significant corner stone for performance of the organization since the management of people has a vital effect on performance. 19 University of Ghana http://ugspace.ug.edu.gh Linking this theory to the study, in a case where an employee expects that personal factors like skills, experience, personality, abilities and knowledge can lead to better work output, which in a long run leads to rewards, they adjust their behavior to match up the goals of the organization. This is done because they perceive that the work output will determine what they will obtain from management at the end of the day. Thus, this theory reveals the idea of performance management as performance being influenced by the expectations concerning future happenings. This also implies that individual employees‟ awareness of improvement in work output may lead to an increase in salary, there will be a positive attitude and behavior towards work outputs. 2.6 Conclusion and Research Gap A review of the literature indeed shows that there is a relationship between performance appraisal and performance in public sector organizations, which is an integral tool that guides employees towards organizational goals in the public sector. Most of the literatures, especially, Wright et al. (2017) among many others reviewed largely concentrate on the organizations from the developed countries. The few that concentrates on public sector organizations were also directed at public organizations that produces tangible goods. Hence, leaving a gap in the literature of performance appraisal and employee performance in public sector of emerging economies and service provider organizations. Therefore, this study attempts to address this gap in performance appraisal and employee performance by presenting the perspective of a service provider from a developing countries public sector context. The study employs the Goal Setting Theory and the Expectancy Theory as the main analytical framework. 20 University of Ghana http://ugspace.ug.edu.gh CHAPTER THREE METHODOLOGY 3.1 Introduction This chapter outlines the approaches and methodology of the study. The chapter presents the research approach and design adopted for this study. It describes the study setting, target population considered for the study, sampling techniques and the sample size used for the study. Issues concerning sources of data, the data collection method and procedures, instruments used for collecting data as well as the techniques for analyzing the data are illuminated. All the ethical responsibility considered are discussed also. 3.2 Research Approach The research will adopt a qualitative approach in addressing the aforementioned research problem and questions. Qualitative methods are often linked with an assessment of social dimensions of this nature. According to Kothari (2004), qualitative method helps the research to portray how people feel as well as their motives and desire about a phenomenon. The qualitative approach will allow for an exploration of factors and variables needed to address the research problem. 3.3 Research Design This research will use a case study design. Case study method is a popular form of qualitative analysis, which involves an in-depth observation of a social unit (person, family, institution, cultural group or community). “The case study method is a technique by which individual factor 21 University of Ghana http://ugspace.ug.edu.gh whether it is an institution or just an episode in the life of an individual or a group is analyzed in its relationship to any other in the group” (Odum & Jocher, 1929) cited in Kothari (2004: 113). Following Yin (2003), a single case from Ghana public sector responsible for national pensions and social insurance trust is used as a case study for this research. 3.4 Population “A population refers to all people or items with the characteristics that the researcher wishes to study. For the purposes of this study, the target population” will include all workers of SSNIT (Industrial Area and Head Office branches). The total work force for the Industrial Area and Head Office is 120. 3.5 Sampling Technique The research employs the purposive sampling techniques, being non-probability sampling techniques for the collection of qualitative data. This technique affords the research the opportunity to use his/her own judgment to select cases and respondents who can provide the needed responses to answer the research questions. Therefore, the researcher will use purposive sampling technique to identify staff of management capacities to respond to the studies effort to explore the nature of performance appraisal system, how the system affects performance management and the challenges affecting the current performance appraisal system at Social Security and National Insurance Trust (SSNIT). 22 University of Ghana http://ugspace.ug.edu.gh 3.6 Sample Size Sampling is an effective tool employed in research because it creates the basis for generalizing the research findings (Monga, 2009). Due to constraints of cost, manpower and time it is impossible to carry out the study in the entire population, hence a representative sample from the population will be selected to provide results which can then be generalized to the entire population. This study samples 12 staff of the Social Security and National Insurance Trust (SSNIT) (see Table 3.1). Table 3.1: Distribution Schedule Designation/position of Respondent Coded Respondents for Anonymity Number 1 Human Resource Officer SSNIT 1 Human Resource Officers 2 2 Human Resource Officer SSNIT 2 Departmental Head SSNIT 1 Departmental Heads 2 Departmental Head SSNIT 2 Employee 1 SSNIT 1 Employee 2 SSNIT 1 Employee 3 SSNIT 2 Employee 4 SSNIT 2 Mid & Lower Level Officer 8 Employee 5 SSNIT 1 Employee 6 SSNIT 1 Employee 7 SSNIT 2 1 SSNIT 1 refers to the Accra Industrial Area branch 2 SSNIT 2 refers to the Head Office branches 23 University of Ghana http://ugspace.ug.edu.gh Employee 8 SSNIT 1 Total 12 3.7 Sources of Data “This study draws its data from two main sources; primary and secondary data sources. The primary data sources refer to data collected and analyzed by the researcher from the field. The main primary data for the study would be the responses obtained from respondents through the ” interviews with the selected persons. The secondary data on other hand refers to the existing data from institutional reports and from credible journal articles that may be appropriate to the topic understudy. “According to Hanson- Thompson (2007), secondary sources have the advantages of providing bases for comparison and providing a useful background for identifying key questions and issues that will need to be addressed by primary research.” The secondary data for this would be obtained from journals, articles, among others. The data obtained from these sources will be scrutinized for suitability, reliability, adequacy and accuracy. 3.8 Data Collection Instruments An interview guide was used for the study. The interview guide helped to conduct interviews, which are common methods of gathering data in qualitative research. Qualitative interview is defined as “an interview whose purpose is to gather descriptions of the life-world of the interviewee with respect to interpretation of meaning of the described phenomena” (Kvale, 1983:174). 24 University of Ghana http://ugspace.ug.edu.gh It is needful when an understanding is being sought into the meaning of concept and has the ability to bring out a true descriptive view of situations (Hansen-Thompson, 2007). Although interviews can be face-to-face or through phone or internet, the study adopted face-to-face interviews because it portrays the true condition on the grounds. It enables the researcher to collect data directly from source and that the information is free from being flawed. In addition, face-to-face-interviews are known to allow for opportunities to raise issues that the interviewer may have not thought of (Bailey, 1983, p. 189). Again, face-to-face interviews offered the researcher some other advantages of which alternative sources of data collection lacks. Some of these advantages are flexibility, probing and spontaneity. 3.9 Data Collection Procedure A formal letter of introduction was foremost written to the management of SSNIT requesting permission for data collection and cooperation of staff of SSNIT. This allowed the research to be carried out within their premises. After permission was granted, the questionnaires were given to the respondents during their break periods. The questionnaires were administered solely by the researcher and cross checking was done consistency to mitigate errors associated with improper data collection procedure. Permission was also sought from each respondent to record interviews. The data was collected over a four weeks period. 3.10 Data Analysis Recorded interviews were initially transcribed from audio to text. A case study report was prepared for approve and corrections by authorities from SSNIT. Data was subsequently analyzed thematically following from Miles and Huberman (1994) and Ellram (1996). Thus, was 25 University of Ghana http://ugspace.ug.edu.gh critically examined for main themes. Further examinations of the data were undertaken to generate coding categories under each theme. These themes and categories were triangulated with secondary data from peer review journal and evaluation reports to check for accuracy and to ensure validity for generalization purposes. In the discussion, striking quotes were provided in italics to provide evidence and to contextualize the findings. Elements of the proposed goal setting theory and expectancy theories were also identified from data to enhance explanation of emerging result and patterns towards generalizing the findings (Ellram, 1996). 26 University of Ghana http://ugspace.ug.edu.gh CHAPTER FOUR DISCUSSION OF STUDY FINDINGS 4.0 Introduction In this chapter, the researcher presents the key findings of the study, which sought to explore performance appraisal system, its effect on the employee performance, as well as the challenges confronting current appraisal systems of public organizations involved in the provision of social services such as persons and national insurance services. Using a qualitative research approach, 12 interview responses were collected from two (2) Area Offices of the case study organization, the Social Security and National Insurance Trust (SSNIT) for the study. These interviewees comprised four staff of management capacities and eight employees each within mid and lower- level positions who were purposively sampled from the aforementioned organizations. The qualitative data was thematically analysed content by content. The interviews that helped to answer the research questions were foremost presented in themes in accordance with the research objectives: performance appraisal system, effect of performance appraisal on employee performance, and challenges to the implementation of performance appraisal. Emerging findings were triangulated with each other and with secondary data for validity. Striking interview responses from the respondents that buttress the findings of the study are also presented in italics for contextualization and as evidence. 4.1 Brief profile of case study organization The Social Security and National Insurance Trust (SSNIT) was established in 1965, as a Social Security Fund by the Ghana Government through the enactment of the social security Act 1965 27 University of Ghana http://ugspace.ug.edu.gh act 279. This Act established a Social Security Fund to provide for contributions thereto and for payment of superannuation, invalidity, survivors and other benefits connected to them. Its management was put by the Act, under the State Insurance Corporation. The office of a Chief Administrator and an advisory board were created. In 1972 Social Security Decree 1972 NRCD 127 was passed by the NRC military Government. This repealed the original Social Security Act of 1965 together with all amendment and regulations. The decree introduced benefits including the current three in addition to unemployment, sickness and emigration benefits. In 1975, Pension and Social Security (Amendment) decree was enacted by the Supreme Military Council which extended the social security scheme to cover public officers and members of the Police Force. Before then the social security provident fund scheme was administered by the Department of Pensions and State Insurance Corporation (SIC). The organization is responsible for the collection of Social Security contributions on behalf of employees, payment of pensions and survival‟s benefits, investment of the contributions, registration of both employees and employer and public education on SSNIT policies. The mission “of SSNIT to develop into a world class Pension Administration Institution dedicated to the promotion of economic security of the Ghanaian worker through prudent investment” mechanism. In addition, it seeks to provide innovative “income replacement scheme through improved business oriented method and state of the art technology for the benefit of stakeholders and Ghanaians by professional, dedicated and quality driven leadership and staff.” 28 University of Ghana http://ugspace.ug.edu.gh 4.2 Performance appraisal system It was the objective of the study to assess the current performance appraisal system at the Social Security and National Insurance Trust (SSNIT). This was essential to explore the effectiveness of the methods used to evaluate employee performance. In this section, employees‟ knowledge about performance appraisal is initially presented to provide for validity of findings derived from their responses. This is followed by the nature of performance appraisal system and how different it is from the previous system. How appraisees‟ sentiments regarding the appraisal process are managed and also discussed. 4.2.1 Knowledge of the performance appraisal system Findings suggest that all respondents have a fair idea about what performance appraisal is. They all refer to performance appraisal as a way of assessing employee performance against agreed targets over a period. It was brought to bare that the total organizational targets or goals are broken down into smaller targets for all the employees. Mid-year reviews are undertaken to assess and evaluate how likely those tasks are being achieved. Performance appraisal is a system where assessment employees performance over a period of time. The period typically begins from the beginning of the year where targets are set: superiors and subordinates. Hence, trying to achieve employees own targets contributes towards achieving that of the superiors and then towards the bigger goals of the organization. A respondent defined; “Performance appraisal is a system used by organization to access the performance of staff within a particular period normally a year.” (Human Resource Officer SSNIT 2, 2018) 29 University of Ghana http://ugspace.ug.edu.gh Another added; “It is a system of assessing staff output within the course of the year.” (Departmental Head SSNIT 1, 2018) To them, performance appraisal access and informs organizations how employees are getting along. Whether you are doing well or not, you need any support to enable the employee to do his work properly. Performance appraisal is to evaluate the responsibilities of an employee. Consequently, some employees defined it as; “This it is a way employee assessment to see if they met their set target within a period. Employee performance appraisal system is the assessment of workers to check if they have achieved their set target.” (Employee 3 SSNIT 2, 2018) This finding concur with Mayhew (2017) that performance appraisal system is an appropriate method used to evaluate and assess the performance of employee, which further discuss the types of performance appraisals systems: behavioral checklist, 360 degree appraisal, management by objective and psychological appraisals. 4.2.2 The nature of performance appraisal With respect to the nature of the existing performance appraisal system, the study revealed that current system in use is an Oracle Performance Management System (PMS). This is a digitized and yet a face-to-face system. Thus, the performance appraisal system is online-based. The assessment, which starts from the beginning of the year, evaluates the cascading targets from the top management to level staff towards the expectation of their superiors. Consistent with Locke (1968), the performance management system at SSNIT reflect only three out of the five basic 30 University of Ghana http://ugspace.ug.edu.gh principles of goal-setting: clarity, challenge, commitment, feedback, and task complexity. These were commitment, clarity, and challenge. A respondent explained: “What we use here is called the Oracle performance management system. Management at the top level has some key responsible areas they are addressing. There are objectives set there and those objectives cascade down to the mid-level staff under key responsible managers. Whatever task the staff down there has to feeds into the major target of the key manager up there.” (Employee 6 SSNIT 1, 2018) A Compliance Officer explained: “As a compliance officer I am given data to work on them. The number upon which I am able to process for within a period of time can form part of my achievement. This and work ethics plus relation with fellow colleagues and superiors all include the performance appraisal. The appraisal is conducted mid-year and annually appraisal. This current system has been in place for since 2015.” (Departmental Head SSNIT 1, 2018) A Human Resource Manager added: “The assessment process normally starts with the beginning of the year target setting where the employee sets its own targets then there is a mid-year review and then close of year final assessment of the employee.” (Human Resource Officer SSNIT 1, 2018) 31 University of Ghana http://ugspace.ug.edu.gh The Oracle Performance Management System, which has been in use for the past three years usually, begins every January to December of each year. In the system, management set their goal then the employees look upon it to also set their own and are supervised to check whether they are meeting their target. The appraisal system is easy to use. The performance management system and assessment begins with supervisors then to branch manager. It is then sent to the head office with justifications from managers concerning their score for an employee. This score normally ranges between 1 to 5 points with 5 being the highest mark an employee can score. However, it was revealed that the previous system was a manual one, which was time consuming and involved too much paper work. Some respondents although felt that beside the change from manual to automated system, there is no difference in the appraisal process. This implies that management of SSNIT has realized the need to control excessive printing by introducing an online digitized system. A respondent informed: “The performance management system started around 2010 manually but the automated system started in about three years now.” (Departmental Head SSNIT 1, 2018) Another added: “There have been some changes to it though from manual to oracles based automated performance management system. But there is no large difference between the manual we use to have and the current system.” (Employee 2 SSNIT 1, 2018) 32 University of Ghana http://ugspace.ug.edu.gh 4.2.3 Fairness and clarity of the process The study discovered that the current appraisal process was quite fair and that employees were satisfied and committed to supporting the process. This was partly due to the extent of clarity in the process. For example, both human resource managers, head of departments and employees were of the view that the process is clear because there are guidelines from the human resource manager‟s outfit that prescribes how the process should be undertaken. This finding corroborates Asamoah (2012) that a fair and transparent appraisal system pleases employees and reflects on their work output. A lower level employee opined: “To me the appraisal system is clear and I even assist some colleagues that have challenges in going through the process. It conducted yearly and the mine has to align my bosses his own he has shared with me.” (Employee 8 SSNIT 1, 2018) Another added: “It’s quite clear to me because at the beginning of the year the human resource brings forward guidelines about how to go about the process.” (Employee 3 SSNIT 2, 2018) With basic knowledge in computing, of which training has been conducted for all staff members, one is capable to go through the process. This makes the process of assessment easy. Due to the clarity and easy nature of process, employees have grown to be satisfied with the process and also developed strong commitment for the current appraisal process. Some respondents described: 33 University of Ghana http://ugspace.ug.edu.gh “…the appraisal process is clear to me as an employee and I believe it is so all staff. It is very clear and effective to me because you acknowledge when you performing well. As an employee, I am very committed to it because of it guidelines I benefits from it.” (Employee 4 SSNIT 2, 2018) 4.2.4 Managing employee grievances Notwithstanding the satisfaction and commitment for the current performance appraisal system, employees sometimes have some grievances and sentiments with the process. This study revealed that whilst some respondents feel that certain targets are not SMART to achieve, others felt that they could not question any unfair ratings given them in the process for the fear of victimization or retaliation. Others were also concerned about poor internet connectivity supporting the automated system. In explaining the latter, a respondent informed: “… because it automated then sometimes network goes down, there are few frustrations here and there. Meanwhile, there are deadlines to meet.” (Departmental Head SSNIT 1, 2018) With respect to the set targets, some respondents argued that some of the targets set are not SMART: simple, measurable, attainable, and realistic and time bound. This puts a lot of stress and pressure on personnel, which end up affecting other performance targets they are responsible to achieve. “My little concern is that some of the targets are not smart and achievable so employees have to stretch and stretch to achieve them. Aside that everything is okay.” (Employee 1 SSNIT 1, 2018) 34 University of Ghana http://ugspace.ug.edu.gh Unfortunately, managing these sentiments appeared a problem at SSNIT, as respondents were poles apart. Thus, while the human resource managers intimated that at the end of each performance appraisal process, the appraise sit with their supervisor to come to agreement before finally submitting the report to the human resource management. When it get to them and appraises are still not okay, there is committee that see to reviewing and resolving the issue in the process. The other respondents including some department heads had different views. For example, others could not make known their sentiments or voice out their sentiments for the fear of retaliation or loss of their jobs. Regarding the process of expressing dissatisfaction about the appraisal results, an employee opined: “You can write to the human resource manager. In the assessment form there is a space made available for remarks so in case you do not agree with the score you were given you forward your issue before the systems closes.” (Employee 6 SSNIT 1, 2018) Others added: “If you disagree, you indicate it by bringing out your evidence to contest whatever appraisals have rated for you to come up with your own assessment of yourself. There is always a responds by the interviewing board any time issues get that far but it hardly gets to such level.” (Employee 2 SSNIT 1, 2018) With disappointment, however, a respondent informed: 35 University of Ghana http://ugspace.ug.edu.gh “… As an employee, your voice don’t get far so I usually keep it myself. We just lament until we get over it. Even though there is a private mail within the appraisal and you will see people putting up their concern over there but we don’t know get any meaningful results.” (Employee 1 SSNIT 1, 2018) In situations where there is disagreement regarding performance appraisal results, management has great responsibility to effectively respond and to resolve such disagreement in the performance appraisal process to instill confidence and commitment of personnel. The study suggests that employees do not receive feedback concerning their complaints and grievances, hence, discouraging them from advancing similar grievances in the future. Such a situation has an implication on employee performance and commitment to the appraisal process. Beside these challenges, the findings establish that the previous was a manual system – on a hard copy. The storage and archiving becomes difficult in instances where there is the need for references or retrieve document. The online base of the current system is accessible and mush easier to manage. 4.3 Effect of performance appraisal on employee performance The study, with its second objective also sought to explore the effect of performance appraisal on employee performance in a service oriented public organization. This objective assesses the effect of performance appraisal on five main performance indicators in a service oriented public organization such as the Social Security and National Insurance Trust (SSNIT) of Ghana. The findings indicate that the current performance appraisal system has enhanced the organizations market share, promote clients‟ satisfaction, improved internally generated funds, informed 36 University of Ghana http://ugspace.ug.edu.gh rewards and sanctions of employees as well as serving as bases for staff training and career development. These are discussed below. 4.3.1 Client Satisfaction Analyses of the views of respondents indicate that the existing performance appraisal system enhances client satisfaction. It is the role of SSNIT to provide for citizens payment of superannuation, invalidity, survivors and other benefits connected to them. This therefore attracts a large proportion of the population to the organization, who needs to be satisfied. With the current performance appraisal system, strategies and objectives or targets for satisfying these clients (citizens) as set and employees measured against them. Even prior to the appraisal, customers are also given the opportunity to report their experience to the organizations through a suggestion box or a toll free phone number provided by the organization at branches and areas offices. A respondent informed: “Clients’ satisfaction is measured on annual basis through a mystery shopping system put in place whereby reports are reviewed at the end of the period by an independent organization. A client that gets very satisfied at service sometimes recommends the employee to higher management or to director general directly.” (Departmental Head SSNIT 2, 2018) Alternatively, another respondent underscored: “For now customer have the power and can report you at any time. Phone numbers of branch and area managers have been made available at our office so if ant customer feels dissatisfied with the way she or he was treated can easily call the 37 University of Ghana http://ugspace.ug.edu.gh director general, area managers or branch manager and you will be taken on.” (Human Resource Officer SSNIT 1, 2018) Such satisfactory feedback from clients (citizens) serves as a source of motivation for employees to perform well and to receive the necessary reward as customers may recommend them to managers. This implies that the harder they work, the more the clients get happy. This concur with prior studies (Rogers, 1994) on the bases that performance in the public sector context may be defined to include customer satisfaction among other economic and social values. Also in line with the tenets of the expectancy theory, Salaman et al (2005) posit that an individual adjust his or her behavior in the organization based on the anticipated satisfaction of the set value goals. However, some respondents were of the view that it is their responsibility to serve and satisfy their customers irrespective of their recommendations or rewards received. This group of respondents argued that customer satisfaction should be guaranteed at all times. They explained: “… well, internal issues should not affect how I deal with the customer. Whether I’m pleased or not I’m supposed to be diligent at work so that customers’ satisfaction is guaranteed at all time. When I secure a customer’s vehicle, until he gets back from within the office, he/she should be happy and may willingly decide to show appreciation.” (Employee 7 SSNIT 2, 2018) 38 University of Ghana http://ugspace.ug.edu.gh 4.3.2 Increased Internally Generated Funds With respect to internally generated funds, it was discovered that performance appraisal process or systems inform field officers about their performance targets of bringing in new customers particularly private sector employers on board. In their efforts to meet this target, they end up convincing and attracting more customers to the national scheme, which increases the internally generated funds of the Social Security and National Insurance Trust (SSNIT) of Ghana. Rogers (1994) advance that such economic values may be defined in defined as performance outcome and measured accordingly, in this context. A respondent illustrated: “… Assuming you are a field officer and our money is out there, it will push you to go for it to be rewarded accordingly. This cause more funds to flow into the organization. If clients are satisfied they may even recommend private organization to get involve thereby bringing more funds.” (Employee 8 SSNIT 1, 2018) Another field officer opined: “you know we have various functional unit or departments, those who go out to chase the employers and update the records to bring the money, if you demotivate them, actually they will not have the edge and it will affect their performance but if they get better appraisal they will always be eager to go out and bring more funds.” (Employee 7 SSNIT 2, 2018) However, the officers stationed at the organizations premises could not relate the performance outputs and the performance appraisal system to revenue generation. They only explain how satisfied customers could recommend to other employers to contribute with SSNIT on behalf of 39 University of Ghana http://ugspace.ug.edu.gh their customers. To them, performance appraisal does not translated into revenue generation. The only time they hear about revenue generation is during general meetings where it is mentioned that performance appraisal helps to improve the organizations market share and internal funds generated. 4.3.3 Market Share Talking about market share, the study brought to bare that the Social Security and National Insurance Trust (SSNIT) is currently enjoying a monopoly in Ghana as it is the only national pension scheme in the country. “… currently SSNIT enjoys a monopoly in Ghana because SSNIT is mandated by law to manage the basic social security organization of the Ghanaian worker so we have the majority share we can have.” (Departmental Head SSNIT 2, 2018) The Social Security and National Insurance Trust (SSNIT) was established in 1965, as a Social Security Fund by the Ghana Government through the enactment of the Social Security Act 1965 act 279. This Act established a Social Security Fund to provide for contributions thereto and for payment of superannuation, invalidity, survivors and other benefits connected to them. In 1972, the Act was amended by the Social Security Decree 1972 NRCD 127 to repeal both the original and all earlier amendments and regulations. The decree introduced benefits including the current three tiers in addition to unemployment, sickness and emigration benefits. The 1975 Pension and Social Security (Amendment) decree was enacted by the Supreme Military Council (Government) which extended the social security scheme to cover public officers and members of the Police Force. 40 University of Ghana http://ugspace.ug.edu.gh From a different perspective, another respondent observed: “… yes. It serves as motivator to bring more people on board.” (Human Resource Officer SSNIT 1, 2018) However, some respondents were of the view that it increases the customer base and market share of SSNIT as it encourages more employees irrespective of their sector: private or public to sign up. Thus, effectiveness of employee performance influences employers to register their employees to SSNIT, particularly the private sector. 4.3.4 Reward and sanctions Performance appraisal at the Social Security and National Insurance Trust (SSNIT) was identified to inform rewards and sanctions of employees. Thus, the result of the appraisal helps management to decide which employees deserves commendation and recognition as motivation for continuing such impressive performance. Poor outcomes on the other hand also direct supervisors and management necessary sanctions or corrective measures to improve future performance. Similarly, bad or lazy personnel are reprimanded and cautioned to work hard. A Human Resource Officer explained: “… at the end of the period the assessment committee evaluates the assessment forms and identifies top performance and then recommends rewards for them but those whose performance falls below par, steps are put in place to address them where they are needed. Those that required sanctioning are duly sanctioned.” (Human Resource Officer SSNIT 2, 2018) With respect to promotion, respondents informed: 41 University of Ghana http://ugspace.ug.edu.gh “Rewards are dependent on your performance because a standard has been set that you must meet to get a particular reward. There’s nothing like a mass reward, the best of the best is the one that will be taken among the best pool to be rewarded.” (Departmental Head SSNIT 2, 2018) Some of these rewards include cash rewards, recommendation and recognition. It comes with a notch movement, double increment salary, promotion or normal increment. Findings indicate that about 30% of staff who perform extremely well is rewarded. Nevertheless, under performs may come with promotion delays or you may get no incremental jump. Persistently underperforming could bring about sanction such as further training, transfers to area offices with high supervision or even dismissal. Salaman et al (2005) and Noordzij (2013) in their application of the Expectancy Theory indicates that employees in an organization to a large extent are motivated when they believe putting in much effort will yield better job performance and output and these job performances can lead to organizational rewards like an increase in salary or bonuses. 4.3.5 Staff Training and Career Development It was also established that performance appraisal system at SSNIT provide relevant information for deciding which employees needs further training and which type of training is essential for personnel to improve achievement of performance targets towards the broader organizational goals. This is the responsibility of the human resource management department. The department pays keen attention to staff development issues, which is also facilitated by the performance appraisal process. During the assessment period, the assessors indicate any training needs of their subordinates in the report – to direct the human resource department in the human resource plan. 42 University of Ghana http://ugspace.ug.edu.gh A respondent intimated this: “Currently the human resource development department manages the staff development and certain during the assessment period the assessor is to indicate any training needs of the assesse.” (Human Resource Officer SSNIT 1, 2018) The human resource management department trains its personnel regarding the organizations targets at annual workshops where expected outcomes and outputs are clearly elaborated to employees. This gives further training to staff who due to some reasons fails to meet their targets. A respondent unequivocally stated: “At the end of every employee performance appraisal every staff is given the opportunity to choose any developmental training he needs and the raining department will organize such training. So if you are staff and you need training, is up to you to provide that information and the SSNIT will make sure it provided. There is general training for staff as well.” (Human Resource Officer SSNIT 2, 2018) Another added: “It is an already scheduled training program so if you think you need one, you must indicate it while the assessment is going for you to acquire the particular skill you need. So in way that is how they are linked.” (Departmental Head SSNIT 2, 2018) The performance appraisal system makes provisions for employees who feel that they require particular training needs. This also provides that staff an opportunity to suggest the requisite 43 University of Ghana http://ugspace.ug.edu.gh training to meet his/her performance targets. Affirming prior studies (Messah & Kamencu, 2011; Akinbowale et al., 2013), Performance appraisal serves as a base for influencing working habits of the employees as well as reviewing and retaining promotional and other training programs which has tremendous effect on employee effectiveness. This implies that performance appraisal plays a major role by provided relevant information needed by management for an informed decision regarding training and development. Such development strategies may also strengthen the organizations strategy for managing the organization‟s talents towards future effectiveness. 4.4 Challenges to the Implementation of Performance Appraisal System Without being oblivious to the existing challenges, the study also found key challenges bedeviling the current performance appraisal system and thereby hindering employee performance. Interestingly, it was discovered that three main challenges exist with the current system: network connectivity challenges, socio-cultural variables, administrative challenges. 4.4.1 Network Connectivity and User Challenges In the case of network connectivity, some respondents of supervisory capacities like the human resource personnel and heads of departments viewed that the automated system sometimes does not run smoothly. It is often interrupted by unreliable internet supply and some hitches from portable digital devices such as tablets used during the appraisal process. This sometimes slows the appraisal process and waste productive hours. A head of department observed: 44 University of Ghana http://ugspace.ug.edu.gh “It’s software and automated. Sometimes there may be failures in the automated functions, besides that it runs smoothly and very efficient. Because it is automated and runs on software there could be periodic internet challenges and system freezing.” (Departmental Head SSNIT 2, 2018) The system was also seen to be unfriendly to use. Some appraisers saw the system as complex and difficult to use. Hence, additional training was necessary to make the system easily usable by appraisers. Other lower level employees also need to understand how the system is operated so they can be satisfied with the outcome and the whole process of appraisal. Due to these challenges, some supervisors wait to conduct their appraisals towards the deadline. These situations often lead to issues of dissatisfaction of results, disagreements and recommendations provided on the employee appraisal form of which may affect commitment if not properly addressed. “… not at all. But it will be good if additional training is organized for the lower level employees. I have identified user challenges with some buttons besides the network breaks.” (Employee 4 SSNIT 2, 2018) This affirms prior studies that inadequate training on conducting performance appraisal including lack of management support for the appraisal process serves as challenges characterizing the public sector performance appraisal systems (Flaniken, 2009). 4.4.2 Socio-Cultural Variables Some socio-cultural variables also affect performance appraisal at SSNIT. From the collective nature of Ghanaians and Africans in general, there was a tendency of protecting friends and 45 University of Ghana http://ugspace.ug.edu.gh associates at the work place. This cultural practice harbors wrong doings and poor performance. Non-performing personnel are also not disclosed to participate in appropriate training and development programs to improve performance. An employee underscored: “well, there is favoritism in every human institution and this organization is no exception. Staff that has been around for longer period gets to be favored by the appraisal system than those who later joined.” (Employee 2 SSNIT 1, 2018) Without withstanding, timid and “respectful” subordinates are also unable to express their dissatisfaction about the process. This may be poor performance as a result of over tasking or assigning employees to other responsibilities that are not their official duties but hinder their achievement of the officially assigned ones. A respondent who is a subordinate revealed strongly: “we all behave as professionals at the work place and comply with rules. Sometimes the relationship between you and your boss can affect you either positively or negatively depending on the kind of professional and ethic you have with him.” (Employee 7 SSNIT 2, 2018) 4.4.3 Administrative Challenges As a going concern, the top management has a fiduciary responsibility to ensure that organization continues to be in business. Therefore, high standards are set so that any employee who does not toe that line gets reprimanded and in worse case, sacked from the organization. Even though these structures exist, certain administrative challenges affect smooth performance 46 University of Ghana http://ugspace.ug.edu.gh appraisal processes at SSNIT. For example, weak supervision and coordination were considered to be critical administrative challenges confronting performance appraisal at SSNIT. This corroborates Flaniken (2009) and Sualihu (2014). Poor supervision implies poor monitoring of whether or not an employee is on the path of achieving performance targets. Without supervision, employees would not have the foresight to know if their performance duties may lead to the expected outcomes or not. Supervision is however essential to provide a guide and to offer clarifications for employees when needed. A respondent illustrated: “Some will not take opportunity to even take a re-look of their targets unless there is supervision. If supervisors don’t go extra mile you see employees not achieving their target.” (Employee 3 SSNIT 2, 2018) Another added: “Occasionally they have to review certain aspect of the system every year to suit the course of SSNIT.” (Departmental Head SSNIT 1, 2018) With respect to the issue of coordination, it was revealed that appraisers do not initiate the performance appraisal at same time with other supervisors. Also, some supervisors also start the process far ahead before getting the employees involved. This may serve as a recipe for lack of satisfaction in ratings given as well as lowering their commitment in the process. An HR Officer opined: “This committee that seats to collate and review the appraisals. Example a manager maybe called to defend the reason for giving a certain rating of assessment about an 47 University of Ghana http://ugspace.ug.edu.gh employee if the employee raises any differences. Supervision is okay and as an employee, I always want to get involved.” (Human Resource Officer SSNIT 1, 2018) Explaining further, a lower level officer added: “Superior normally starts the process before employees get involved. Without good supervision may delay in submitting my appraisals.” (Employee 6 SSNIT 1, 2018) 4.5 Summary In sum, the study identified several interesting findings that helped provide answers to the research questions posed earlier in chapter one: i) what is the performance appraisal system used at SSNIT?, ii) what is the effect of performance appraisal on employee‟s effectiveness at SSNIT?, and iii) what are the challenges to the implementation of performance appraisal at SSNIT? On the objective of exploring the performance appraisal system, the study revealed that an automated „management by objective‟ performance appraisal system was existing. This system entails an online-based system with performance targets set by management from the national level. These performance targets of specific and obtainable goals are also agreed upon between area and branch managers with their subordinates. According to Telem (2014), this method helps the appraiser to determine the success or failure of the employees easily. Regarding the second objective of assessing the effect of performance appraisal on employee performance at SSNIT, the study established that indeed appraising employee performance has quite significant positive impacts on organizational performance. Five key performance indicators relevant to a service oriented public organization such as the Social Security and National Insurance Trust (SSNIT) were found. The findings indicate that the current 48 University of Ghana http://ugspace.ug.edu.gh performance appraisal system has enhanced the organizations market share, promote clients‟ satisfaction, improved internally generated funds, informed rewards and sanctions of employees as well as serves as bases for staff training and development. In line with the goal setting theory, Locke (1968) and Joseph (2017) posit that setting goals serve as guide to organizations and its employees in everyday decision-making processes. Associated benefits include facilitating planning, motivating employees, limiting stress and leading to quicker results. Notwithstanding, some critical challenges were also identified as hindering the success and goals of the current performance appraisal system at SSNI. These challenges include administrative laxities, internet-network connectivity problems, and socio-cultural variables. 4.6 Conclusion This study aimed at examining the effect of performance appraisal on the performance of employees at Social Security and National Insurance Trust (SSNIT) of Ghana. This study established that the management by objective performance appraisal system was in use. At SSNIT, the outcomes or results of this system informs staff training and development plan. The system also helps to enhance the organizations market share, promote clients‟ satisfaction, and improves financial resources generated internally. Unfortunately, the system is confronted by internet-network connectivity problems, administrative laxities, and certain socio-cultural variables. In the next chapter, the study offers key recommendations for research, policy and performance appraisal practice, particularly at the Social Security and National Insurance Trust (SSNIT) of Ghana to respond to the existing challenges inherent in the process. These recommendations are 49 University of Ghana http://ugspace.ug.edu.gh aimed at enhancing effective and efficient performance appraisal process towards employee and organizational performance. 50 University of Ghana http://ugspace.ug.edu.gh CHAPTER FIVE SUMMARY, CONCLUSION AND RECOMMENDATION 5.0 Introduction This chapter presents the summary of the key findings on the effect of performance appraisal on employees‟ performance using the case study of the Social Security and National Insurance Trust (SSNIT) of Ghana. It also brings out the conclusions drawn from the findings of the study and recommends certain practices and strategies that could help to improve employee performance through performance appraisal in service oriented public sector organizations in developing countries. This study established that the management by objective performance appraisal system was in use. It also brings out the conclusions drawn from the findings of the study and recommends certain practices and strategies that could help to improve academic performance. 5.1 Summary of the Study Reflecting on the first research question: i) what is the performance appraisal system used at SSNIT? the study revealed that an automated „management by objective‟ performance appraisal system was existing. Consistent with prior studies such as Telem (2014), this system entails an online-based system with performance targets set by management from the national level. These performance targets of specific and obtainable goals are also agreed upon between area and branch managers with their subordinates. This method helps the appraiser to determine the success or failure of the employees easily. 51 University of Ghana http://ugspace.ug.edu.gh On the second research question, ii) what is the effect of performance appraisal on employee‟s effectiveness at SSNIT?, the study established five key performance indicators relevant to a service oriented public organization such as the Social Security and National Insurance Trust (SSNIT). These performance variables were clients‟ satisfaction, information-based rewards and sanctions, improved internally generated funds, as well as providing bases for employee training strategic plan and talent development. Meanwhile, some critical challenges were identified to be thwarting efforts of the existing performance appraisal in improving employee performance at SSNIT. These challenges which are also common in most developing countries include administrative laxities, internet-network connectivity problems, and socio-cultural variables. They hinder the success and goals of the current performance appraisal system. 5.2 Conclusion The study aimed at examining the effect of performance appraisal on the performance of employees at the Social Security and National Insurance Trust (SSNIT) of Ghana. The study foremost brings to bare that the current performance appraisal system in existence was an automated one called „management by objective‟. This system, which is support by an automated system known as the Oracle Performance Management System entails the setting of performance targets by management from the national level of SSNIT and then decentralized down to the area and branch levels of the organization for effective implementation and monitoring. Although the system does not currently support an instance where subordinates also appraise their supervisors (as with the 360 degree appraisal), it helps to enhance the organizations market share, promote clients‟ satisfaction, and improves financial resources generated internally. However, internet- 52 University of Ghana http://ugspace.ug.edu.gh network connectivity problems, administrative laxities, and certain socio-cultural variables were found to be confronting the system. 5.3 Recommendations This study argue that effective performance appraisal may translate into promoting employee performance in various operational aspects of an organization both public and private oriented. This study contributes to the performance management literature and practice in the developing country context. However, in light of the findings established by this study, the following recommendations and policy directions are made to address the implementation challenges identified in the performance appraisal system of Social Security and National Insurance Trust (SSNIT) of Ghana. The study foremost recommend that other forms of performance appraisal system should be combined with the online-based management by objective performance appraisal system. For example, fusing the current system with the 360 degree appraisal will give subordinates the opportunity to assess their supervisor as well as providing performance outcomes from a wider perspective such as emotional, interpersonal and technical capacity of personnel. Secondly, relevant committees and the human resource management unit should offer feedbacks on the grievances and concerns of employees lodged. Providing feedback on complaints goes a long way to instilling confidence and trust in the performance management system. Again, the human resource management and leadership of public organizations, particularly SSNIT should not see the performance appraisal process as an opportunity to sanction, retaliate 53 University of Ghana http://ugspace.ug.edu.gh and abuse their subordinates or employees they have bad relationships with. Rather, it should be seen as a tool for supporting the organization‟s development and strategic plans by aligning employees‟ performance to specific organizational targets. 54 University of Ghana http://ugspace.ug.edu.gh REFERENCES: Adcroft, A. & Willis, R. (2005). The (un) intended outcome of public sector performance measurement. International Journal of Public Sector Management. 18(5): 386-400. Adofo, P. S. (2011). An evaluation of the performance appraisal system and its effect on employee performance: A case study of selected senior high schools in the Kwahu-South District. 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The role of trust and co-operation in marketing channels: a preliminary study. European Journal of Marketing, 23(2), 109-122. Zhang, Y. Y. (2012). The Impact of Performance Management System on Employee performance: Analysis with WERS 2004 59 University of Ghana http://ugspace.ug.edu.gh APPENDICES: Appendix 1: Semi-Structured Interview Guide Performance Appraisal and Employee Performance in Public Organisations: A Case of the Social Security and National Insurance Trust, Ghana Dear respondent, please lend me few minutes of your time to fill out this interview guide. It is strictly for academic purpose and therefore all information provided shall be treated with maximum caution and confidentiality. All personal data provided shall be treated collectively and not on personal levels. A. Background Information of Respondent 1. Branch of Respondent…………………………………………... 2. Position of Respondent…………………………………………. B. Prevailing Performance appraisal system being used at SSNIT 1. Please, what is your understanding of Performance appraisal. 2. And what is the nature of the practice at SSNIT? 3. What are the current systems used by SSNIT in appraising employee performance? 4. How long have these systems been institutionalised in SSNIT‟s performance appraisal practice? 5. Within which intervals are performance appraisals conducted for employees in SSNIT? 6. Explain how clear, articulate and enforceable these performance appraisal systems are for employees at SSNIT 7. Describe the commitment/support of both lower level and top-level managers in performance appraisal at SSNIT? 8. Are employees satisfied with the performance appraisal system? 9. How are employee sentiments treated after appraisal? C. Influence of Performance Appraisal on employee effectiveness in SSNIT 1. Elaborate on how Performance Appraisal influences employee performance in SSNIT. 60 University of Ghana http://ugspace.ug.edu.gh 2. How does performance appraisal translate into Clients’ Satisfaction? 3. How does performance appraisal improves internally generated funds? 4. How does performance appraisal increases client number/size – market share? 5. 11. How does performance appraisal results influence the reward and sanctions mechanism in SSNIT? 6. 12. Explain how performance appraisal system is linked with staff training and career development? D. Challenges of Implementing Performance Appraisal Systems in SSNIT 1. In your view, what were the challenges bedeviling the implementation of the previous performance appraisal systems in SSNIT? 2. What about the current performance appraisal systems in SSNIT? 3. Specifically, what are some of the challenges encountered in the process of implementing performance appraisal systems in SSNIT relative to these areas? a. Financial……………………………………………………………………… b. Socio-cultural factors ………………………………………………………… c. Organizational culture………………………………………………………… d. Institutional and administrative………………………………………………… 4. In what way does weak supervision and non-adherence to performance appraisal systems influence employees performance in SSNIT? E. Recommendation or any other comments 1. What will be your suggestion for a workable performance management system to influence employee performance in SSNIT? Distribution Schedule Designation/position of Respondent Number Human Resource Officers 2 Departmental Heads 2 Mid & Lower Level Officer 8 Total 12 61