INVESTIGATING THE INFLUENCE OF PERFORMANCE APPRAISAL ON EMPLOYEE EFFICIENCY IN CAMEROON'S BANKING INDUSTRY

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Organizations are established with specific objectives and rely on various levels of employee to achieve them. However, they need to keep up with new developments in technology and knowledge in order to fulfill standards and deliver expected results. Organizations must continually engage or refresh their workforce in light of this rapid evolution in order to enable them to keep up with the rate of change. Recruiting trainable personnel, retraining current staff, delivering in-service training in particular professions, and putting in place on-the-job training, including exchange programs, are common tactics used by corporations to address these issues.

In managerial concept,  performance appraisal system serves as a valuable tool for enhancing the quality of an organization's workforce performance. It is considered a crucial aspect of human resources management and an integral part of administrative control processes. On the other hand, proper planning of the appraisal process is essential for organizations to achieve objectives such as workforce development, including skill enhancements, promotions, managerial assignments, incentivization, and disciplinary actions, salary adjustments, providing performance feedback, and identifying educational needs.

Hence, performance appraisal plays a vital role in identifying individuals' talents and capacities, making them aware of organizational advancements, plans, and goals. It allows organizations to assess employee efficiency, thereby improving workforce effectiveness, increasing production and service volume, and fostering positive organizational change. Performance appraisal is crucial because it ensures that the organization's systems are easily understood by employees and effectively implemented by managers. Complex or impractical appraisal structures often lead to confusion, frustration, and non-compliance. Similarly, appraisal systems that aren't directly relevant to the job can waste time and resources. Successful appraisal programs typically focus on evaluating critical behaviors essential for job success. Systems that overlook these behaviors tend to be invalid, inaccurate, and may lead to discrimination based on irrelevant factors.

Nevertheless, regular performance appraisals are necessary to assess an employee's performance against the stated or presumed job requirements. It's essential for members of the organization to have a clear understanding of their expectations and the criteria against which their performance will be evaluated. Laurie (2022) emphasized the importance of an effective appraisal system by stating that it can identify an individual's strengths and weaknesses, and provide guidance on leveraging strengths and overcoming weaknesses effectively. Therefore, a survey will be conducted in order to investigate the influence of performance appraisal on employee efficiency in Cameroon's banking industry.

1.2 Statement of the Problem

The performance appraisal system (PAS) plays a crucial role within both civil service and banking industry. There's a growing reliance on this process, driven largely by organizational goals to influence employee behavior and attitudes, and ultimately, enhance organizational performance. However, this reliance stems from several factors: the establishment of clear performance objectives at the start of evaluation cycles, ongoing monitoring of performance (which can aid underperformers), and the acknowledgment of exemplary performance through rewards, typically in the form of increased pay.

Furthermore, the effectiveness of these outcomes hinges on the quality of the performance appraisal (PA) process. According to Omusebe et al.(2020) PA is multifaceted, with potential for variability, especially when supervisors are tasked with making subjective assessments of employee performance. It involves elements such as work planning, setting mutually agreed-upon performance targets, providing feedback, and generating reports. Importantly, PA is interconnected with various other human resource management systems and procedures, including staff development, career advancement, recruitment, placement, and the implementation of incentives and penalties. Additionally, using human judgment in the absence of a formal appraisal system can lead to major problems for an organization's motivation, ethics, and legality. In the absence of a systematic evaluation framework, it is impossible to guarantee that choices are just, precise, legitimate, and defendable. The Cameroonian banking sector has continued to use an objective-based performance appraisal system that focuses on individual goals and objectives rather than evaluating the abilities and skills needed to perform their duties. This has led to questions about the system's impact on employee performance and job satisfaction. According to a preliminary inquiry into the banking industry, employees who are present during assessments express great anxiety about the inability to establish the use of appraisal results and view them as merely a formality. A quick glance reveals that employees are not consistently given feedback. However, to a great extent these are some of the reasons that defeat the purpose of performance appraisal and justify the assentation as confirmed by Kurt (2018) that some organization managers are often disappointed in performance appraisal system because the desired outcomes are hardly realized. It is in the light of these that the study seeks to investigate the influence of performance appraisal on employee efficiency in Cameroon's banking industry.

1.3  Objectives of the Study

The main purpose of this study is to investigate the influence of performance appraisal on employee efficiency in Cameroon's banking industry. Specifically, the study will;

1.Determine whether there is a significant relationship between performance appraisal and  employee efficiency  in the banking sector of Cameroon.

2.Investigate on the underlying factors that influence employee efficiency in the banking sector of Cameroon.

3.Investigate the impact of performance appraisal on employee efficiency  in the banking sector of Cameroon

1.4 Research Questions

The following questions have been prepared for the study:

Is there a significant relationship between  performance appraisal and  employee efficiency in the banking sector of Cameroon?

2.What are the underlying factors that influence employee efficiency in the banking sector of Cameroon?

3. What are the impact of performance appraisal on employee productivity in the banking sector of Cameroon?

1.5 Research Hypotheses

H0: There is no significant relationship between  performance appraisal and  employee efficiency in the banking sector of Cameroon.

Ha: There is a significant relationship between  performance appraisal and  employee efficiency in the banking sector of Cameroon.

1.6 Significance of the Study

The findings of this study will be revealed to various organizations, stakeholders, management, financial institutions and commercial banks in this study. It will provide employees the opportunity to state their individual perceptions towards performance appraisal of the organization, and make recommendations as to what they feel the organization should do to improve productivity. Also, the management will benefit from the study too, as the findings will be presented to them with recommendations from the respondents. It will make them understand the benefits of good performance appraisal and it influence on employees efficiency. Further more, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the influence of performance appraisal on employee efficiency in Cameroon's banking industry. 

1.6 Scope of the study

The scope of this study is boarded on the influence of performance appraisal on employee efficiency in Cameroon's banking industry.. Empirically, this study will determine whether there is a significant relationship between  performance appraisal and  employee efficiency, Investigate on the underlying factors that influence employee productivity and the impact of performance appraisal on employee efficiency in the banking sector of Cameroon

Geographically, the study will be delimited to staff of commercial banks in Douala, Cameroon.

1.7 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.8 Definition of Terms

Efficiency:  A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. It also relates to the use of all inputs in producing any given output, including personal time and energy. 

Performance: is the accomplishment of tasks, activities, or functions with a certain level of effectiveness and efficiency.

Productivity: is a measure for efficiency that shows the proportion of input to output in a system or process.

Banking Sector: a financial institution that provide various financial services, including accepting deposits, lending money, and facilitating transactions.

Performance appraisal: refers to the systematic evaluation of an employee's performance within an organization.