Performance Appraisal Practices Among Commercial Banks in Kenya
Abstract
In today’s competitive business world, it is understood that organizations can only
compete with their rivals by innovating and organizations can be innovative by managing
their human resources well. The human resource system can become more effective by
having a valid and accurate appraisal system used for rating performances of the
employees. Unfortunately, the number of the organizations using an effective
performance appraisal system is limited. Organizations are run and steered by people. It
is through people that goals are set and objectives are realized. The performance of an
organization is thus dependent upon the sum total of performance of its members. The
success of an organization will therefore depend on its ability to measure accurately the
performance of its members and use it objectively to optimize them as a vital resource. In
the present highly competitive environment, organizations have to ensure peak
performance of their employees continuously is in order to compete and survive at the
market place effectively. The objective of the study was to determine the performance
appraisal practices among commercial banks in Kenya. The population of the study was
all the forty two commercial banks operating in Kenya. The study used primary data
which was collected using self-administered questionnaires. The data was analyzed using
the Statistical Package for Social Sciences (SPSS) software. The findings of the study
were that performance appraisal was carried out in the banks mostly on quarterly. The
banks use performance appraisal for organizational development, employees’
performance, salary increment or distribution of rewards, has a motivational effect on
workers’ performance, promotion, training, development and training needs identification
and that performance appraisal is used in assessing employees’ commitment to
organizational goals and objectives. The study found out that goal setting help to
contribute to higher performance in the bank than only telling employees what to do and
how to do and that the banks establishes goals that are perceived as challenging but
realistic and to which there is higher level of commitment. Performance appraisal method
used by the banks resulted in performance criteria/instruments used to measure employee
performance being clearly defined, objective and employees in the bank undertake self
reviews, graphic rating scale is used to appraise employees, merit/pay bonus allocations
was a motivating and fair, behaviorally anchored rating scale method is undertaken in the
bank and bank appraise employees using comparative ranking method.
Citation
Stella Mwangi (2013). Performance Appraisal Practices Among Commercial Banks In Kenya, Master Of Business AdministrationPublisher
University of Nairobi School of Business