IMPACT OF MEASURING EMPLOYEE'S PERFORMANCE ON ORGANIZATIONAL GROWTH

CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

2.1 CONCEPTUAL REVIEW

EMPLOYEE PERFORMANCE

High employee’s performances lead an organization and have greater opportunities for employees then those who have low performance (Vans cotter, 2000). “Performance is related to that organization hires the person to do and do well”(Campbell 1993). Performance is not only related to the actins but also involves judgment and evaluation process (Ilgen & Schneider, 1991). The activities that can be examined and measurable are reflected as performance (Campbell, 1993). Organizations need highly performance of its employees so that organization can meet their goals and can able to achieve the competitive advantage (Frese, 2002).(Borman and Motowidlo, 1993) differentiate between work and performance. Work related to the person abilities through which employee performed activities which is contributed by the technical core. Performance not related to the technical core characteristics but it cares about the organization psychological environment and social environment in that organization achieve its objectives. It involves behaviors such as helping colleagues or being a reliable member of the organization (Frese, 2002).

Employees are the force that drives a company forward. So it should come as no surprise that the daily performance of the workforce hugely influences the success or failure of a business.

To stay successful in today’s market, businesses must find ways to maintain and bring out the best performance from their employees. Not only does this help to hire, retain and develop the best talent, but by helping staff to grow within their roles and responsibilities, the company can build a pipeline of future leaders. All contributing to long-lasting success. Working to improve employee performance is an ongoing process that involves measurement, evaluation, and planning, but it's also a vital step to achieving company goals.

Employee performance is how a member of staff fulfils the duties of their role, completes required tasks and behaves in the workplace. Measurements of performance include the quality, quantity and efficiency of work. When leaders monitor the performance of employees, they can paint a picture of how the business is running. This not only helps to highlight what companies could be doing in the present to improve their business, but this information also feeds into future growth plans.

However, placing a focus on employee performance doesn’t just benefit the business. It helps employees to reach their full potential, while also improving overall performance – which can have positive effects on morale and quality of work produced. Lastly, but most importantly, when employees are under-performing, customers may be dissatisfied. As a result, the entire business may be affected by poor performance and struggle to reach goals.

MEASUREMENT OF PERFORMANCE

Every role is different so the metrics used to measure employee performance will ultimately depend on the type of business the company and employees operate in. But in general, the main ways to gauge performance are:

Quality of work

Standard of work produced is a key indicator of performance. Are employees putting in maximum effort to ensure high-quality results? Are performance objectives being met? Quality of work provides the basis to analyse all other elements of their performance.

Speed and efficiency

Looking at how much employees accomplish in an average week, month or quarter, how does this match up to your expectations? Are deadlines met, vastly improved on, or is time wasted? Are corners being cut to produce work quickly? Efficiency is the result of maximum output at least cost so this is vital to be aware of within your company.

Trust and consistency

Ask yourself if you trust your employees to do all their work to a high standard and deliver it on time. Do they work independently or do you feel that you often have to step in? Do they consistently display company values? Are they punctual and present to the expected standard? High-performing employees can be trusted with autonomy and continue to produce strong results without much supervision. Thus is is necessary for HRM to keep these performance metrics in mind when conducting individual employee performance reviews.

PERFORMANCE APPRAISAL

Performance appraisal is an organized, formalized, systematic process of assessing job related strengths and weaknesses of an individual appraisee with the ultimate aim that if he performs well such strengths are encouraged and reinforced and if he performs marginally his work habits can easily be identified and redirected in a manner conducive to the set objectives of the organization. Appraisals are criterion variables that measure job performance of employees at a particular period; a job is a collection of tasks. It is a process whereby an appraiser objectively communicates to an appraisee how he or she is performing the job in order to establish a plan of improvement through training and development, counseling, mentoring, retraining, or other remedial measures. Performance or productivity in this context refers to the degree of accomplishment of the tasks that make the employee’s job. According to Udeze (2000) performance appraisal is about evaluating the employee’s contribution to the productivity objectives of organizations. The issues of employee productivity and the need to evaluate them have always been a matter of prime concern to management and even to the employee. This is so because the employee needs a feedback on his output in the organization for a particular period. By supervising employee’s daily performance on the job, management is in a better position to appraise performance and provide feedback. The evaluation of performance may either be informal or formal. The informal appraisal which is based on the day-today working relationships of an employee and the superior provides an opportunity for the superior to judge the subordinate. This judgement is then communicated through conversation on the job or by on-the-spot examination of a particular task. A formal appraisal is through reporting the superior’s observations of an employee’s performance to management for necessary action. According to Gomez-Mejia et al. (2004) management has the overriding power over performance appraisal as a measure of achieving superior organizational goals. They opine that appraisal should be just more than a passive activity which criticizes or praises employees for their performance in the preceding year. Rather, appraisal must take a future-oriented view of what employees can do to achieve their potential in the organization, in which case, management must provide employees with feedback and coach them to higher levels of productivity. An important feature of an effective evaluation involves conducting appraisal on a regular basis, either every six months or annually. Irregularity in appraisal intervals can affect the employee morale, and also have negative consequences on overall organizational performance (Exley, 2000). Insisting on objective appraisal cannot be overemphasized because it is a motivational tool for employee productivity which contributes to organizational survival. Motivation as it relates to employee productivity is often behind the drive for self-actualization. Selfactualization is a state of self-fulfillment where people feel that they have realized their highest potential in life. It involves being creative and nurturing skills that provide opportunities for success. To a large extent therefore, employee motivation is fundamental as it influences behaviour which leads to productivity. This is critical because the enterprise survives on productivity. Performance assessment focuses on managing the objective, measurable results of a job or work group. Goals might include sales, costs, or services. Goals are specific, difficult, and objective. Productivity is an important measure of success or goal because getting more done with less resources such as; money or people, increases the organization’s profits. According to Noe et al. (2004), productivity usually refers to the output of employees, but it can be used more generally as a performance measure. For such to be effective, organizations decide what level of performance it desires. It then sets up a system for tracking these measures and giving employees feedback about their performance in terms of such measures. For example, it is said that the Biblical Adam and Eve evaluation by God marked the first attempt at evaluating worker performance, the only difference being that they were not employees in any form. In the contemporary organization, there are different concepts, roles, uses, types and structures of performance appraisal that aim at employee productivity and overall organizational excellence (Holbrook, 2002).

IMPORTANCE OF MEASURING EMPLOYEE PERFORMANCE

There are two roles of performance appraisal in organizations that are often seen as potentially conflicting. One role is to measure performance for the purpose of rewarding or differentiating employees. For example, promotions or layoffs might hinge on these ratings, making discussions of them difficult at times.

Cumming (1972) writes that the overall objective of performance appraisal is to improve the efficiency of an enterprise by attempting to mobilize the best possible efforts from individuals employed in it. Such appraisals achieve four objectives including salary reviews, development and training of individuals, planning job rotation and assisting in promotions. Mamoria (1995) and Atiomo (2000) agree that although performance appraisal is usually thought of in relation to one specific purpose, which is pay. It can in fact serve for a wider range of objectives which are; identifying training needs, improving present performance of employees, improving potentials, improving communication, improving motivation and aids in pay determination. Performance appraisal has been considered as a most significant and indispensable tool for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotions and merit increases. Performance measures also link information gathering and decision-making processes, which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. If valid performance data are available, timely, accurate, objective, standardized and relevant management can maintain consistent promotion and compensation policies throughout the total system, Burack, Elmer and Smith (1977). Performance appraisal also has other objectives, which McGregor (1957) says includes:

- It provides systematic judgment to the organization to back up salary increases.

- It is a means of telling a subordinate how he is doing and suggesting needed changes in his behavior, attitude and skill or job knowledge. It lets him know where he stands with the boss.

- It is being used as a base for coaching and counseling the individual by the superior.

Other role is the development of individual’s potential. In this case, the manager is featured more as a counselor than as a judge, and the atmosphere is often different. It is emphasized that performance appraisal helps to bring about employee empowerment teamwork, job satisfaction, and a winning, competitive work spirit (Wilson and Western, 2001).

Compensation Administration

A good performance appraisal system should be seen as the link between the reward an employee hopes to receive and his or her productivity. Such a linkage can be thought of as equal to the individual’s productivity = individual’s performance appraisal = reward expected. The links must be as strong as possible, if any of them fails, the worker will not get the expected rewards. Equity and fair-play should also take the centre stage in compensation administration so that individual employees’ will put in their best at all times. This system of compensation administration is based on the idea that rewards should be given to quality performance or merit instead of seniority. Without undermining the consequences of seniority such as experience, loyalty, the merit system recognizes first and foremost, the productivity and capability of the individual employee. However, the major role of an appraisor is to act as evaluator of employee performance, and usually the focus is on comparison of performance levels of individuals’ against set standards and objectives (McGregor, 2010).

Feedback for Career Development

Contrary to what most people think or believe performance appraisal is not only used for promotions and transfers or wage increases. Performance appraisal, even if it is not linked to wage/salary increment, it is a primary source of information and feedback for employees both in areas in which they are doing well and ones where improvement is needed. The import of this is that performance appraisal helps the organization to forecast the future of employees and take appropriate steps to plan for their individual career development. The human capital is the most important aspect of all the factors of production because it is the human being that coordinates, controls, and manages all other factors. For the human being to play these critical roles effectively, he should be highly developed and equipped. The development function of performance appraisal allows for determination of areas in which the employee might wish to grow. Basically, effective performance feedback communicates information that encourages continuous quality performance (London, 1997).

Administrative Decisions

There are many other uses of performance appraisal. Performance appraisal results can safely be classified as administrative decisions. Today, organizational decisions such as promotion, termination, or transfers, are based on performance appraisal results. Most commercial banks in Nigeria, for example, base their annual promotions, Business, Management and Economics Research 170 layoffs, and transfers, on performance appraisal results. Those who score high on a scale of 100 percent are usually rewarded with promotions, and given higher responsibilities while those who score very low are exited from the system. If these decisions are not documented with performance appraisal results they could be successfully challenged in the court of law as lacking basis or equity (Werner and Bolino, 1997).

TYPES OF EMPLOYEE PERFORMANCE MEASUREMENT

Truly speaking, there are basically three types of appraisal. These include confidential or secret appraisal, open appraisal and we also have semi open and semi secret. However, Mamoria (1995) and Ryars and Rue (1979) identified two types of appraisal, confidential and open appraisal.

Confidential Appraisal

In confidential appraisal, Murthy (1989) writes that the individual is not involved in the appraisal exercise as the appraisal outcome is not at all communicated to the person being appraised. In essence, the person’s strengths and weaknesses are not communicated to him or her. Obisi (1996) adds that some managers and supervisors involved in performance appraisal ignore periodic counseling after an incident has taken place. Open Appraisal

Open appraisal system reveals to the appraisee his or her strengths and weaknesses, his contributions and failures which are discussed with him or her during performance counseling interview. Mukundan (1989) writes that open appraisal method would reveal and create self-awareness, which is a process of giving insight into one’s own performance. It helps the employee become more reflective and objective about himself and future planning, which establishes an action plan for the coming year in terms of fixing targets, activities, responsibilities etc. It also makes the employee aware of his key performance areas and the contribution that he is making to the organization.

Semi Open and Semi Secret Appraisal

This is an appraisal process whereby performance appraisal procedure would be made open at the beginning and later made secret. For instance, if an appraisee is asked to fill an appraisal form and the superior rates the subordinate and return his rating to the subordinate to sign and after signing, the subordinate would not hear anything again about his final performance outcome. In some cases, the subordinate would be given the form to fill and after filling and returning the form, the subordinate receives no further communication. Organizations would do well if they embrace open appraisal whereby the final appraisal outcome is communicated to the appraisee. According to Rao (1984) cited in Obisi (1996) explains some of the reasons why some organizations do not embrace open appraisal. Some managers and supervisors know that it is their duty to communicate back to their subordinates their performance outcome but are reluctant to do so due to the following reasons:

• I do not want to let my subordinates know his weak point because he may get demoralized and discouraged and thus, allow his to develop a sense of disaffection and dismember ship.
• I cannot tell my subordinate that he is a failure. He or she would take it personal and come after me and a female worker may read meanings into my actions. It would be safer to let the sleeping dog lie.
• If I tell him that he cannot grow in the organization due to poor performance, he or she may quit before I could get a replacement, or if I tell him or he that her or she is not good, he may start looking for a better job elsewhere.
• The subordinate may become over ambitious and news of his or her success may enter his or her head. The subordinate may start targeting my job.
• Human wants are insatiable; they would start asking for all kinds of things, which may create an uneasy working environment. The above arguments are not weights.

Today open appraisal system has come to stay and any organization, which ignores open appraisal system, should be prepared to face the negative consequences of low performance, conflict and uncertain future- Obisi (1996).

APPROACHES TO PERFORMANCE APPRAISAL

Trait and Behaviour Appraisal

According to Jones and George (2003), when trait appraisals are employed, managers are concerned with assessment of subordinates on personal characteristics that are relevant to job performance, such as education, skills, capabilities or personality. This means that a workshop employee may be assessed on his ability to operate computerized machines. Also a clerical employee may be evaluated based on his ability to show empathy and/or communication skills. Behaviour appraisals on the other hand assess how employees perform their jobs - the actual actions and behaviours that employees exhibit on the job. For example, in educational institutions such as a high school, the number of classes and students are important, but how students are taught or the methods teachers use to ensure that learning takes place are also important. Therefore, behaviour appraisals have the advantage of providing employees clear information about what they are doing right and wrong and how they can improve their performance. Again, because behaviours are much easier for employees to change than traits, performance feedback from behaviour appraisals is more likely to lead to performance improvements (Anderson, 1993).

Result Appraisals

In certain jobs how employees perform the job is not as important as what they accomplish or the results they obtain. With result appraisals organizations assess performance by the results or the actual output of particular work behaviours. This is output focused to the extent that two employees who have equal sales targets to meet can employ different and distinct approaches. One could be persuasive, by frequent visits and telephone calls to customers, while the other could easily answer customers questions correctly due to his/her expert knowledge and wait for the customers to come back. What will be appraised by the manager is the result achieved by each employee and not necessarily the method used in achieving such a result (Redman et al., 2000).

Objective Appraisals

This is an appraisal that is based on facts and figures and it is usually in numerical terms. Objective appraisals are usually used by organizations while assessing targets. It is easy to check the number of motor cars sold against set targets or standards. If a salesman has the target of selling 1000 cars per annum and he sold 500 it is easy to find out the level of his performance by expressing the number of cars sold as a percentage of the budget, like; 500/1000 x 100/1 = 50 percent. If the point allocated to the number of cars sold is 100, then this salesman will earn 50 percent in appraisal. This type of appraisal is said to be objective, and enhances motivation. Among the most effective ways to improve employee productivity are high levels of ability and motivation. When employees have high levels of ability and motivation, they perform at or above standards. According to Heller (1998) appraising objectively and effectively provides a good opportunity to assess employees motivation levels. He insists that to motivate well starts by assessing employees objectively.

Subjective Appraisals

An appraisal is said to be subjective when it is based on appraiser's perceptions of traits, behaviours and or results. Subjective appraisals are usually unreliable and misleading because they are based on the apperaser’s perceptions. In a situation where the manager or the appraiser does not like an employee the tendency is high, due to human nature, that he will be biased in appraising such an employee. And when this happens, the super-ordinate organization will be misled into taking decisions that it would not otherwise have taken if the employee was objectively appraised (Milkovich and Boudreau, 1997).

MODELS OF PERMANCE APPRAISAL

1. Degree Performance Appraisal
2. A 360 - Degree appraisal is performance appraisal by peers, subordinates, superiors and sometimes clients who are in a position to evaluate a manager’s performance. This is done to improve motivation and performance. Some organizations include 360 Degree appraisal and feedback in their performance management system especially for managers. In a 360-Degree appraisal, managers’ performance is appraised by a variety of people, beginning with the manager’s self-appraisal, and includes peers or co-workers, subordinates, superiors and some times, even customers. It has been observed in practice that peers often are very knowledgeable about performance but usually may be reluctant to provide an accurate and negative appraisal of a co-worker they like or a positive appraisal of the person they hate. This natural phenomenon has also tended to render peer appraisal useless. Besides, whenever peers, subordinates or someone else evaluates an employee's performance, the manager must ensure that the appraisers’ are truly knowledgeable about the performance dimensions being used. However, these challenges of 360-Degree performance appraisal and feedback do not in any way mean that they are entirely useless (Rowe, 1995). 360-Degree feedback helps in building leadership skills, people development, customer relationships, task knowledge, as well as innovation and creativity (Goodge and Watts, 2000; Huet-Cox et al., 1999). Business, Management and Economics Research 171.

Organizational Behaviour Modification (OBM)

Another important performance appraisal approach is organizational behaviour modification (OBM) which builds directly on a branch of psychology known as behaviourism. This perspective holds that individuals’ future behaviour is determined by their past experience, specifically, the ways in which past behaviour has been reinforced. People tend to repeat behaviours that have been rewarded in the past, as a basis for current behaviour. Providing feedback and reinforcement can obviously modify employees’ future behaviour. Therefore, in organizations, OBM is a plan for managing the behaviour of employees through a formal system of feedback and reinforcement (Johns et al., 1992; Kane and Lawler, 2009).

Management by Objectives (MBO)

Douglas McGregor thought that instead of creating antagonisms because of judgments, the superior should work with subordinates to set goals. This would allow subordinates to exercise self-control and manage their job performance. This supports the original idea of Peter Drucker over the concept of Management By Objectives (MBO). MBO is more than an appraisal exercise. It is regarded as a philosophy of managerial practice, a method by which managers and subordinates plan, organize, control, communicate, and debate over organizational objectives and how to achieve them. MBO also relates to a system in which people at each level of the enterprise set goals in a process that flows from top to bottom, so that employees at all levels are contributing to the organization’s overall goals; and these goals becoming the standards for evaluating each employee’s performance (Drucker, 2009; Grote, 2000; McLeod, 1997; Smith et al., 1996).

EFFECT OF PERFORMANCE APPRAISAL ON EMPLOYEE PERFORMANCE IN AN ORGANIZATION

Overall, performance appraisals help employees work efficiently. Businesses can increase their productivity by creating evaluation systems and using them on a regular basis, providing constructive feedback and offering competitive rewards. The key is to hold performance appraisals frequently and make them part of the company culture. Employees should have a say in their evaluation and provide their own feedback to the company as part of the process. Using ideas and insight from employees can help the company build more effective and productive processes and systems.

Performance appraisals help create meaningful dialogue between employees and managers or business owners that may not happen otherwise. Many small businesses are fast-paced, so managers may not have a chance to provide helpful feedback to employees regularly, and employees may not have an opportunity to bring up issues they are dealing with. A performance appraisal is a commitment to make time for these kinds of conversations to benefit both employees and the business.

Performance appraisals show employees that the business is invested in their success. This tool is a way to help employees understand where their weaknesses lie and where they can make improvements. However, it's also a way to remind employees where they shine. Managers can use performance appraisals to improve company morale, according to Wisestep, by highlighting the milestones the employee has hit, where they have excelled, and the accolades they have earned.

The effectiveness of a performance appraisal system and its effect on employee motivation and morale has to do with how the manager conducts the evaluation. While it's important to use this meeting to discuss areas for improvement, it's equally important to focus on employee successes. This talking point can sometimes be reduced to a few minutes, but it's best to provide employees with specific examples of what they should be proud of. This not only shows that the company values their performance, but also that the company feels they are worth celebrating.

Performance appraisals provide employees a chance to understand how their individual goals and objectives fit into the broader vision and mission of the company, according to The Undercover Recruiter. During the performance appraisal process, the manager discusses the targets the employee is responsible for hitting and why it is necessary. When employees understand how their roles fits into the company, they are more likely to take ownership of their objectives and work hard to meet them. Some companies have performance appraisals once a year, while others have them quarterly. Regardless of how often the appraisal meetings are, it's best to track employee targets and objectives on a frequent basis, such as monthly. This way, managers and employees can keep up to date on the progression of the target. If it appears that the employee will not be able to hit their target, managers may provide suggestions or additional resources the employee can use. If there are external circumstances that prevent the employee from hitting the target, such as a change in market demand, then the company may adjust the target.

Additionally holding regular performance appraisals helps employees understand their roles more clearly. The performance appraisal typically includes the employee's job description, and managers evaluate how the employee's performance ranks in relation to the tasks they are assigned to do. Without frequent performance appraisals, employees may only have a chance to review their job descriptions when they are first hired. Through the performance appraisal process, employees can also advise management on whether any part of their job description has changed. Sometimes, over the course of a quarter or a fiscal year, the employee may take on new duties and give up old ones. During the performance appraisal process, they can update their job description to reflect what they are responsible for. This way, the employee will buckle up and do better and the company will have more accurate record of each employee's role.

THE EFFECTS OF PERFORMANCE APPRAISAL ON ORGANIZATION GROWTH

Performance appraisal doesn’t benefit only employees. Organizations that use the result of performance appraisal to identify areas of strength and opportunity can benefit as well performance appraisal can provide an indication of area of training need as well as direction for leadership development, performance improvement and succession planning.

Identifying Areas of Strength: The result of performance appraisal can be assessed to identify areas of strong performance across all employees by departments or by demographics. Standardized performance assessment allows companies to aggregate, calculate, and analyze results to show where performance is strong. These areas of strength then can serve as benchmark and opportunities for searching of best practices for other areas of the organization.

Identifying Training Needs: Evaluating the result of performance appraisals can provide managers, human resources department and organizations with an indication of where additional training and development may be necessary, says Lin Grensing-Pophal, author of “human resources essential” for instance, result may indication. The employees collectivity are scoring low on items related to use of technology or customer services. These may become target area for the creation and implementation of training programs designed to boost employee competence and performance. Results also may be assessed at the individual department and division levels.

Team work: During a performance appraisal, a manager needs to take time to show the employee how his performance affects productivity of the entire organization. When employee understands how their performance affects the ability of others to do their jobs, it helps put his own job duties into an overall company contest. It helps improve the motion of teamwork among the staff and can also encourage age cooperation to achieve corporate goals.

Motivation: An employee performance appraisal can act as motivation for an employee to improve his productivity. When an employee sees his goals clearly defined, his performance challenges identified and career development solutions in places to help advance his career, the effect is to motivate the employee to achieve those goals. Creating a comprehensive plan for employee for employee development and give an employee achievements to strive for will inspire a higher level of organizational efficiency.

2.2 THEORETICAL FRAMEWORK

The theoretical framework guiding the study will be Herzbeg theory of Motivation and

Implicit Person Theory (IPA)

Implicit Person Theory (IPA) refers to the general expectations that we build about a person after we know something of their specific central traits. For example, when one believes that a happy person is also friendly, rather than quit or shy. Dweck (1986) says implicit theories are professional beliefs related to the flexibility of personal traits that affect the behavior of person.Implicit person theory defines the type of personality that he/she has and how he or she behaves.Implicit personality theory describes the specific patterns and biases an individual uses when forming impressions based on a limited amount of initial information about an unfamiliar person. While there are parts of the impression formation process that are context-dependent, individuals also tend to exhibit certain tendencies in forming impressions across a variety of situations. There is not one singular implicit personality theory utilized by all; rather, each individual approaches the task of impression formation in his or her own unique way. However, there are some components of implicit personality theories that are consistent across individuals, or within groups of similar individuals. These components are of particular interest to social psychologists because they have the potential to give insight into what impression one person will form of another.

In this study we examined the role of implicit person theory in the view of a manager’s performance judgments. Performance appraisal is the source that gives sense to employees that they are being valuable and recognize as an organizational team. Lee & Bruvol, (2003) argued that thought that has been develop through the performance evaluation system that performance is being evaluated for the development of employees than employees will compensate it to increase their level of performance. On the basis of justice theory many analyzers distinguish between distributive and procedural justice when they are reviewing about the organizational justice. Moorman, (1991) suggested that Distributive justice is related to the justice in results and outcomes that employees get and procedural justice related to the real fairness in the system that apply for defining results. Rahim et al, (2001) different studies reveal that in organizational justice distributive and procedural justice have exclusive and shared relations with organization. Boss, (2001) argued Employees those feel that the results of performance appraisal is unfair they often leave the organization and their morale and involvement will let down. And it will change their behavior in wrong doings for taking revenge from the organization

Two-factor Theory of Motivation

The two-factor theory (also known as Herzberg's motivation-hygiene theory and dual-factor theory) states that there are certain factors in the workplace that cause job satisfaction while a separate set of factors cause dissatisfaction, all of which act independently of each other. It was developed by psychologist Frederick Herzberg.

Feelings, attitudes and their connection with industrial mental health are related to Abraham Maslow's theory of motivation. His findings have had a considerable theoretical, as well as a practical, influence on attitudes toward administration (Herzberg, Frederick; Mausner, Bernard; Snyderman, Barbara B. (1959). According to Herzberg, individuals are not content with the satisfaction of lower-order needs at work; for example, those needs associated with minimum salary levels or safe and pleasant working conditions. Rather, individuals look for the gratification of higher-level psychological needs having to do with achievement, recognition, responsibility, advancement, and the nature of the work itself. This appears to parallel Maslow's theory of a need hierarchy.

However, Herzberg added a new dimension to this theory by proposing a two-factor model of motivation, based on the notion that the presence of one set of job characteristics or incentives leads to worker satisfaction at work, while another and separate set of job characteristics leads to dissatisfaction at work. Thus, satisfaction and dissatisfaction are not on a continuum with one increasing as the other diminishes, but are independent phenomena. This theory suggests that to improve job attitudes and productivity, administrators must recognize and attend to both sets of characteristics and not assume that an increase in satisfaction leads to decrease in dissatisfaction.

From analyzing these interviews, he found that job characteristics related to what an individual does that is, to the nature of the work one performs apparently have the capacity to gratify such needs as achievement, competency, status, personal worth, and self-realization, thus making him happy and satisfied. However, the absence of such gratifying job characteristics does not appear to lead to unhappiness and dissatisfaction. Instead, dissatisfaction results from unfavorable assessments of such job-related factors as company policies, supervision, technical problems, salary, interpersonal relations on the job, and working conditions.

Thus, if management wishes to increase satisfaction on the job and employee performance, it should be concerned with the nature of the work itself, the opportunities it presents for gaining status, assuming responsibility, and for achieving self-realization. If, on the other hand, management wishes to reduce dissatisfaction, then it must focus on the workplace environment policies, procedures, supervision, and working conditions. Therefore performance appraisal can serve as a motivational tool to encourage employee performance.

2.3 EMPIRICAL STUDIES

Anyanwu (2021) conducted a study The main focus of this study is to examine the effect of performance effect of performance appraisal on employee performance in an organization using Nigeria Bottling Company(NBC) in Lagos State as case study. Survey research design was employed for the study and with aid of convenient sampling, sixty (60) staff of Nigeria bottling Company (NBC) was selected as the participant of the study. The sources of data collection was both primary and secondary with the application of questionnaires as an instrument to gather the necessary data. The questionnaires were properly completed after being administered and this was a basis by which the primary data were collected.The hypothesis was tested using chi-square test statistical tool (SPSS v.2.3) and the result were similar to those of the responses drawn from the questionnaires. The result of the study shows that as every organization pays its workers for their performance, it is imperative to compare what workers should do as evident from the performance standards with what they have actually done. Findings from the study reveals that Informing workers of their rating will help serve as motivation to them and as well enable them to improve their performance. The researcher therefore recommend that Human Resource Managers shouldalways provide the employees with Feedbackon performance as this will serve as meansof behaviour modification and for performance improvement