An investigation on effect of performance appraisal system on employee performance in the banking sector.
Louisa, Libokoyi Muhenje
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Performance appraisal is a structured formal interaction between subordinate and supervisor that Usually takes forma of periodic interviews in which the work of the subordinate is examined and discussed. Performance appraisals in most organisations are usually conducted by the department of human resource management, under the supervision of the human resource manager. Performance appraisal is a critical too for effective human resource management. Therefore, this Study aimed to investigate the effect of performance appraisal system on employee performance In the banking sector. The research findings are expected to assist the human resource managers to counsel employees on improving or maintaining job standards. Employees will benefit since they are able to identify their strengths and weaknesses and improve on them. The study investigates whether the following variables had any effect on employee performance in the banking sector. They include; performance appraisal method, leadership training, performance standards, frequency of appraisals and compensation structure. Target population comprised of 43 human resource managers in the 43 bank headquarters based in Nairobi. A descriptive Statistics was adopted. The researcher used purposive sampling with a sample size of 43 human Resource managers. The researcher used questionnaires as the main data collection instrument. Completed instruments were assembled, edited, coded and interpreted in relation to the research objectives. Data analysis was done using descriptive statistics for quantitative data. On the hand, qualitative analysis was presented using tables, charts and graphs. Out of the target population of 43 respondents, only 34 questionnaires were returned amounting to satisfactory response rate of 79% of whom a slight majority (61.8%) were male while (38.2%) were female. The study also Discovered that the banking sector had employed a relatively younger and mature labour force of Human resource managers with majority being between 25-30 years. The findings also indicated that majority of employees had worked for a period of 1-5years who had a degree in education. Out of the five mentioned variables, it was indicated that there was a relationship between them and performance of employees in the banking sector. Therefore, these variables needed to be considered carefully. Although, the respondents indicated a high percentage, on the extent of the effect on each variable, the respondents needed to improve on them by involving the junior staff. This would benefit both the banking sector and the employee.