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Appraisal Practices and Employee Performance in Microfinance Banks in Nairobi County Kenya

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Fultext thesis (605.6Kb)
Date
2021
Author
Odenyo, Nicholas Ouma
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Abstract
Globally, employee performance remains a concern to many organizations. Organizations, particularly microfinance banks, use appraisal practices and their effective execution as a crucial staff development approach. Given the challenges of employee performance in microfinance institutions, embracing performance appraisals becomes critical as a means of recognizing and rewarding employee effort at work, as well as assisting in the detection of potential performance problems, while facilitating good work practices, cultivating professionalism, and supporting employee growth needs. The specific objective of this study was to see if there was a link between employee performance and appraisal processes in Microfinance Banks in Nairobi County, Kenya. The research study was done in Faulu Microfinance Bank. The study's obejectives were to determine the effects of target setting on employee performance, the role of evaluation on employee performance, the communication practice in the appraisal process and how it affects employee performance, and to investigate the corrective action practice in the microfinance sector and its relationship with employee performance. The research was guided by Goal Setting Theory, Expectancy Theory, and Social Cognitive Theory. In this study, a descriptive research design was adopted. The target population was 343 people, with 102 people responding to the survey. A stratified random sampling strategy was adopted by the researcher. Data was gathered using questionnaires. The surveys' reliability and validity were tested in a pilot study. Response frequencies, percentage means, and standard deviation values were calculated using descriptive statistics data analysis and the Statistical Package for Social Sciences (SPSS). Finally, a Multiple Linear Regression Model was used to estimate the effects of the independent variables on the dependent variable. The findings of the study were presented using tables, pie charts, and graphs. The findings of the study indicated that the microfinance bank has mechanism that ensures appraisals are done in a structured way that has clarity to the employees and that when the employees are involved right from the beginning, communication is aligned to expectations, participants are sufficiently trained and corrective action is aligned to employee performance models. The findings showed that proper and effective appraisal practices will serve to promote a positive culture and environment for employee performance. The study therefore recommended that Faulu Microfinance Bank and other microfinance institutions should seek to ensure that peer to peer or 360 degrees appraisal is adopted so that employees can receive feedback from one another as compared to top- bottom feedback. It also recommended that the microfinance bank should not only involve the employees but also seek to incorporate their views in the overall business strategy. This can lead to the ownership of the goals and objectives of both individuals and organization. The study further recommend training for the parties involved in the appraisal process so as to develop and promote an attitude that is open and receptive to feedback and change.
URI
http://ir-library.ku.ac.ke/handle/123456789/23599
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  • MST-Department of Business Administration [1919]

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