Effects of Performance Appraisal System on Organisational Efficiency: a Case Study of Puntland State Parliament

Abstract

Many public institutions in the world have experienced challenges in their organisational efficiency with a significant part of these challenges arising from the performance of employees. In Puntland parliament, strategic plan was adopted in 2014 with an aim of fostering organisational efficiency and despite the efforts, challenges remain, therefore this study aimed at evaluating the effect of performance appraisal system on organisational efficiency in Puntland Parliament. The explicit objectives were; to assess the effect of appraisal techniques on organizational efficiency at Puntland State Parliament, to evaluate the effect of performance feedback on organizational efficiency at Puntland State Parliament and to establish the effect of employee’s attitude on organizational efficiency at Puntland State Parliament. The study was guided by the goal setting theory of motivation. A case study research design was used and targeted a population of 159 comprising 66 members of parliament and 93 members of staff. The sample size was 80 constituting 33 members of parliament and 47 members of staff. The collection of data was done through questionnaires. The responses rate was 60%. The results from the regression analysis and hypothesis testing revealed that there is a positive and significant relationship between appraisal techniques and organisational efficiency. This is based on the regression coefficient of 0.314 and p value of 0.031. From the regression output and hypothesis tests there is a positive and significant link between performance feedback and organizational efficiency based on p value of 0.001 and regression coefficient of 0.494. From the regression output and hypothesis tests there is a positive and significant relationship between employee attitude and organizational efficiency based on p value of 0.000 and regression coefficient of 0.947. The study therefore recommends that that the institution should focus more on ways of improving the employee attitudes through forums and participatory leadership in addition to the reward system that is already in place. Through trainings the employee attitudes can be enhanced by way of equipping them with skills and adequate knowledge that will positively build their attitudes towards their functions. The study recommends that in addition to yearly feedbacks, the institution should introduce periodic feedback system where the employees are given feedback on the progress of their performance on continuous basis to ensure that they are on track. The study recommends that the performance appraisal system be improved to not only comprise actual verse targeted results but should take into consideration employee attributes like their behaviours. On the basis of the results from the study, appraisal techniques, performance feedback and employee attitude account for 73% of the changes in the organizational efficiency. Future studies may be done on the other factors that influence organizational efficiency in Puntland parliament. Further future studies should also be done on other public institutions in Somalia in relation to the nexus between performance appraisal system and organizational efficiency.