Extent of adoption of 360-degree performance appraisal by commercial banks in Kenya

Abstract

Performance appraisals have become a common and important practice in various organizations carried out to improve employee and organizational performance. For firms to survive in a global economy, they need to exploit all the available resources as a means of achieving competitive advantage. One resource recognized as providing a source of competitive advantage is the human resources of the firm whose performance needs to be monitored for optimum results. The method adopted by an organization to conduct performance appraisals may differ but there is an emerging trend of use of 360 degree feedback for performance appraisals. The main objective of this study was to establish the extent of adoption of 360 degree performance appraisal by commercial banks in Kenya. The research used a cross-sectional design. The target population of this study was all the 43 commercial banks in Kenya. Quantitative data collected from 31 banks using questionnaires was analyzed by the use of descriptive statistics using Statistical Package for Social Sciences (SPSS, V.20) and was presented through percentages and frequencies. The findings show that majority of the banks’ human resource policies recommend the use of 360 degree performance appraisal hence it is used to a great extent. The study also found that the common sources of evaluation used by most banks are self evaluation, immediate supervisors, peers/ heads of other departments and clients/customers. The use of subordinates and consultants as a source of evaluation in 360 degree feedback appraisal is not common. The study recommends that the banks should assess and seek to understand the effectiveness of the 360 degree feedback as part of a performance management system to enhance productivity and organizational performance. It further recommends on the need to embrace subordinate assessments of supervisors’ performance so as to provide valuable developmental guidance in the various institutions. The study concludes that majority of the commercial banks in Kenya have adopted the 360 degree performance appraisal system and that it has positively impacted on employee job satisfaction as it allows for an all round gauge of an employee’s performance.