Influence of Performance Appraisal on Employee Performance in Lake Victoria South Water Services Board, Kenya

Abstract

Performance appraisal is the process of analyzing the duties and responsibilities of each employee and evaluating the value of the job in relation to others in the organization. It is argued that performance appraisal, if conducted the right way, improves employee and overall organization performance. Despite the recent research efforts into the antecedents of organizational performance most especially in the developing economies, no documented empirical work has been conducted examining the link between the elements of performance appraisal and employee performance. This has left the information on appraisal feedback, appraisal decisions and appraisal techniques and their relationship with employee performance not known. The main objective of the study was to investigate the influence of performance appraisal on employee performance in Lake Victoria South Water Services Board. Specifically, the study sought to establish the influence of performance appraisal techniques on employee performance, to determine the relationship between performance appraisal feedback and employee performance and to assess the influence of performance appraisal decisions on employee performance. The study adopted correlational case study design. The population of the study 56 employees arrived at through saturated sampling. Primary data was collected by the use of structured questionnaire while secondary data was obtained through document review. The reliability of the instrument was achieved through the use of Cronbachs alpha coefficient,a=0.687. The results showed that the correlation between appraisal techniques, appraisal feedback and performance was negative and significant at 0.05 significance level with a correlation coefficient of, r = -0.341 and r = -.248 respectively meaning that if rigid appraisal techniques are applied, employee performance is likely to decline. The same applies to appraisal feedback. The correlation between appraisal decisions and employee performance was positive and significant with a correlation coefficient of 0.424 meaning that when performance appraisals generate positive appraisal decisions concerning employees, employee performance is improved. The regression results showed that R 2 is 0.923 and also significant. This means that appraisal techniques, appraisal feedback and appraisal decisions together explain 92.7 percent of the employee's job performance. Further the results showed that appraisal techniques, appraisal feedback and appraisal decisions had beta standardized coefficients and p values of ~ =-.271 , p< .05; ~=*-1.146.These means all the beta coefficients, ~, which are the degrees to which the independent variables each explain the dependent variable, are negative and significant. The study concludes that rigid performance appraisal techniques at Lake Victoria South Water Services Board negatively influences employee performance. It therefore recommends that the Board should emphasize the use of flexible performance appraisal techniques which will motivate its workers to put more effort to positively improve performance in their job areas