Research Proposal

On

“Performance Appraisal and its effects in employees’ motivation”

(For the case of International Development Bank Limited)

Submitted By:

Sarad S. Dhungel

MBAe Spring 2010

Term IV Sec ‘B’

July, 2011

1.0INTRODUCTION TO PROBLEM STATEMENT AND PURPOSE OF STUDY

Performance appraisal is one of the key components of any organization. An organization is a place where people from different background, culture, ethnicity work together and they must be appraised for their performance. The employees’ current and/or past performance should be evaluated relative to his/her performance standards.

1.1STATEMENT OF THE PROBLEM

The main problem towards which this study is directed is favoritism that takes place in an organization. In some private organizations, employees are upgraded not on the basis of their performance and motivation, but they are appraised if they have favorer in higher position of the organization. Thus, this research aims to find out whether deserving employees of International Development Bank Ltd have found that there is any kind of biasness among their peers and they are not getting appraisals prior to the reason that the less deserving employees have sources in higher position holders of the company. This kind of behavior certainly creates dissatisfaction to those employees who perform well for the organizational welfare.

The research project will therefore seek to explore and investigate the following:

  • To examine the extent to which employees are fairly treated in the matter of performance appraisal.
  • To identify and evaluate the level of commitment of the employees towards the organization.

1.2SCOPE OF THE STUDY

This study will aim at finding the current criteria for performance appraisal in the Bank. This study will aim at bringing out some hidden issues like favoritism that are not talked much but all the employees have concerns about it. This study is important as it will help the organization itself to know about how satisfied their employees are with the kind of performance appraisal schemes they provide to their employees and whether they have to make any changes in the organization’s performance appraisal system. The study is important because it is the research on how are the supervisors, subordinates and other staffs are appraised in different location of the organization. This study is important as this can be used to analyze the present scenario of organizations in Nepal.

1.3OBJECTIVES OF THE STUDY

The main objective of the study is to conduct a survey about the performance appraisal in the Banking sector of Nepal represented by International Development Bank Limited. The purposes of the study are as follows:

  • To find out the performance schemes for different employees.
  • To find out whether the staffs of the organization are satisfied or dissatisfied with the evaluation system.
  • To find out the nature of the performance appraisal tool used.
  • To find out what kind of incentive after appraisal help them perform better.
  • To find out whether performance appraisal affects the employees’ level of motivation.

2.0LITERATURE REVIEW

The objective of appraising an employee’s performance is to measure the employee’s performance in terms of generic dimensions such as quality, quantity and timeliness of work and developing one’s competencies or achieving one’s goal.

There are different types of steps in appraising an employee’s performance.

a)Graphical Rating Scale Method

A Graphical rating scale method is a scale that lists a number of traits and a range of performance for each trait. The employee is then rated by identifying the score that best describes his or her level of performance for each trait.

b)Alternation Ranking Method

Alternation ranking Method ranks the employees form best to worst on a particular trait, choosing highest then lowest until all are ranked. First, all subordinates to be rated are listed and name of not well known to be ranked are crossed out. Then the employee who is the highest and who is the lowest is the characteristic being measured is shown. Then it chooses the next highest and the next lowest alternating between highest and lowest until all employees has been ranked.

c)Paired Comparison Method

Paired comparison method ranks the employees by making a chart of all possible pairs of the employees for each trait and indicates which the better employee of the pair is.

d)Forced distribution method

The forced distribution method is similar to grading on a curve. The predetermined percentage of rates is placed in various performance categories. For e.g. 15% high performers, 20% high average performers, 30% average performers, 20% low average performers and 15% low performers and so on.

e)Critical Incident method

Critical incident method keeps a record of uncommonly good or undesirable examples of an employee’s work related behavior and reviews it with the employee at predetermined times.

f) Behaviorally Anchored Rating scales (BARS)

An appraisal method that aims at combining the benefits of narrative critical incidents and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance.

  • Generate Critical Incidents: Ask person who know the job (job holders and/or supervisors) to describe specified illustrations (critical incidents) or effective and ineffective performance.
  • Develop performance dimensions: Have these people cluster the incidents into a smaller set of (5 or 10) performance dimensions, and define each dimension, such as “operational skills”, “marketing skills” and so on.
  • Relocate incidents: Another group of people who also know the job then relocate the original critical incidents. They get the cluster definition and the critical incidents, and must reassign each incident to the cluster they think it fits best. Retain a critical incident if some percentage (usually 50% to 80%) of this second group assigns it to the same cluster as did the first group.
  • Scale the incidents: This second group then rates the behavior described by the incident as to how effectively or ineffectively it represents performance on the dimension.
  • Develop a final instrument: Choose about six or seven of the incidents as the dimension’s behavioral anchors.

g) Management by Objectives:

Management by Objectives involves setting specific measurable goals with each employee and then periodically reviewing the progress made. It consists of six steps

  • Set the Organization’s goals: Establish, based on the firm’s strategic plan, an organization wide plan for next year and set specific company goals.
  • Set departmental goals: Department heads take these company goals (like “boost 2008 profit by 30%) and, with their superiors, jointly set goals for their departments.
  • Discuss departmental goals: Department heads discuss the department’s goals with all subordinates, often at a department wide meeting. They ask employee to set their own preliminary individual goals; in other words, how can each employee contribute to the department’s goals?
  • Define expected results (set individual goals): Department heads and their subordinates set short –term individual performance targets.
  • Performance review: Department heads compare each employee’s actual and targeted performance.
  • Provide feedback: Department heads and employees discuss and evaluate the latter’s progress.

3.0 RESEARCH METHODOLOGY

3.1 Research Design:

This research study attempts to analyze the relationship between performance appraisals (dependent variables) and the job related factors like job performance, job evaluation, Being a field study , it examined the performance evaluation of the different employees of International Development Bank Limited.

The research methodology that will be used for the completion of the research is the primary data in the form of questionnaires and personal interview.

3.2 Population, Sample and Sampling Technique

The population size of research is 157 employees of International Development Bank Limited. However the sample size taken for this research is 100 people working in various branchoffices of the Bank. The population consists of various categories of people, i.e. the clerical staffs, the middle level officers and upper level officers. The Sampling technique that will be used is CONVINIENCE SAMPLING TECHNIQUE.

3.3 Data Collection Procedures

An interview schedule will be designed in view of the data requirements. All the staffs who will be responding to the interview will be assured that their responses would be kept confidential. Another data collection technique that will be used is the questionnaire which consisted of number of questions related to the performance appraisal of the employees and the impact of these appraising techniques.

3.4 Data Analysis and Presentation:

For this research report SPSS and MS EXCELwill be used for the analysis of data. With the help of these softwares, we will develop graphs, frequency tables and charts in detailed form for the different categories of staffs in the Bank

.3.5 Method of Analysis of Data

The main source of the analysis of the data is questionnaire. An open ended question will be asked during the course of the report while few cross checking questions will also be asked so that relevant information could be extracted from the interviewees.

3.6 Contribution of the Study

It is intended that the findings of this research will be used by the concerned Bank for correction of the current practice if any flaws are pointed.

REFERENCES

  • Cooper D R., Schindler P S. (1998), Business Research Method, Tata McGraw Hall, Eight Edition