ADRRI JOURNAL OF ARTS AND SOCIAL SCIENCES

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ADRRI JOURNAL OF ARTS AND SOCIAL SCIENCES

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pISSN: 2343-6891 ISSN-L: 2343-6891 VOL. 3,No.3(1), June, 2014

The Effectiveness of Performance Appraisal System: A Case Study of Unilever

Ghana Limited.

Edward Markwei Martey1and Edward Asante2

1
Department of Marketing, Koforidua Polytechnic, Koforidua.Email:edmarkwei@yahoo.com
2Koforidua Polytechnic Library, Box 981, Koforidua Polytechnic, Koforidua, Eastern Region,
Ghana. Email : eddieasante59@gmail.com
1 Correspondence: edmarkwei@yahoo.com

Received: 27th April, 2014 Revised: 20th June, 2014 Published Online: 30th June, 2014

[Cite as: Martey, E. M. and Asante, E. (2014). The Effectiveness of Performance Appraisal System: A Case Study of
Unilever Ghana Limited. ADRRI Journal of Arts and Social Sciences. Vol. 3, No.3 (1).]

Abstract

The purpose of this study is to ascertain the fairness of the performance appraisal system of Unilever
Ghana Limited. The purposive sampling method was employed in the selection of supervisors of the
employees. A total of twelve (12) supervisors were selected for the study. Simple random sampling
technique was used to select six hundred (600) employee respondents from all departments of Unilever
Ghana Limited. The results from this study show that the appraisal system is not tied to the reward and
does not auger well for the organization. Employees that are much productive do not get pay
commensurate with their efforts and supervisors/managers are usually interested of the wrongs of
employees. And employee resistance was not found to be drawback in employee appraisal. It was
recommended that Unilever Ghana should adopt other employee appraisal methods in addition to the
management by objective method. This will ensure that the shortcomings of management by objective
can be controlled through the use of other methods such as 360 degrees appraisal.

Keywords: evaluation, productivity, assessment, method unilever Ghana limited

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INTRODUCTION
Performance appraisal has increasingly become part of a more strategic approach to
integrating HR activities and business policies and may now be seen as a generic term
covering a variety of activities through which organizations seek to assess employees and
develop their competence, enhance performance and distribute rewards (Fletcher, 2001).
Thus, both practice and research have moved away from a narrow focus on psychometric and
evaluation issues to developmental performance appraisal (e.g., Fletcher, 2001; Lefkowitz,
2000; Levy and Williams, 2004; Waal, 2003), which may be defined as any effort concerned
with enriching attitudes, experiences, and skills that improves the effectiveness of
employees (Boswell and Boudreau, 2002).

According to Angelo et al (2006) “Performance appraisal” is a discrete, formal,

organizationally sanctioned event, usually not occurring more frequently than once or twice
a year, which has clearly stated performance dimensions and/or criteria that are used in
the evaluation process. Furthermore, it is an evaluation process, in that quantitative
scores are often assigned based on the judged level of the employee’s job performance on
the dimensions or criteria used, and the scores are shared with the employee being evaluated.

Generally, it is admitted that an effective performance appraisal can lead an organization to

take strides towards success and growth. Conversely, an ineffective performance appraisal
system can seal the fate of an organization by creating chaos and confusion from top to bottom
in the administrative hierarchy. Hence the study seeks to investigate the kind of performance
appraisal system in place at Unilever Ghana Limited which has made them very competitive in
the industry for so many years.

Employee performance appraisal is one of the most common management practices utilized in
organizations. According to Coelho and Moy (2003) and Carder and Ragan (2003) the
sustainability of organizations is directly linked to the continual improvement of business
performance. Many organizations have found a way to improve performance through the
establishment of performance appraisal. The assumption appears to be that an effectively
designed, implemented, and administered performance appraisal system can provide the
organization, the manager, and the employee with some benefits (Coens & Jenkins, 2000).

According to Keeping and Levy (2004) employee reactions toward performance appraisal may
be considered important for a number of reasons. First, reactions are of great interest to
practitioners. Second, while reactions have been theoretically linked to determinants of
performance appraisal success and acceptance they have been overlooked in the research.
According to Keeping and Levy (2004) employee reactions toward performance appraisal may
be considered important for a number of reasons. First, reactions are of great interest to
practitioners. Second, while reactions have been theoretically linked to determinants of
performance appraisal success and acceptance they have been overlooked in the research.
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Leung, Su and Morris (2001) found that fair interpersonal treatment by the supervisor elicits
positive attitudinal reactions from recipients towards both the supervisor and the organization.
Fair interpersonal treatment had both direct and indirect paths to attitudes towards the
supervisor while the effects of just formal procedures were primarily directed to the
organization .A significant amount of performance appraisal research has focused on evaluation
of rating accuracy, which is often studied in an isolated context.
Often than not studies on performance appraisal system tend to focus on the cognitive
processes of psychometric measurements of performance appraisal in neglect of employee
reaction to appraisals (Murphy and Cleveland, 1995). This agenda has done little to improve the
usefulness of performance appraisal as a managerial decision-making tool (Banks & Murphy,
1985) hence the need to undertake comprehensive research of the evaluation of performance
appraisal system in a field setting.

The broad objective of the study is to evaluate the performance appraisal system in Unilever
Ghana Limited. The specific objectives set for the study are;
 To ascertain the fairness of performance appraisal system of Unilever Ghana Limited
 To identify the drawbacks in the existing performance appraisal system of Unilever
Ghana Limited
The following research questions were set for the study;
 Is the performance appraisal system of Unilever Ghana Limited fair?
 What are the drawbacks in the existing performance appraisal system of Unilever Ghana
Limited?
In the changing scenario at global level every organization is concerned about the continuous
growth in the productivity of their employees. It is very important that Unilever gets the best
from its employees. One surest way to ascertain the performance of employees is through
effective performance appraisal systems. Effective performance appraisal system ensures that
employees periodically receive feedback regarding their performance. Hence this study will
help Unilever Ghana Limited to implement policies that will help improve the performance of
employees. Thus the study will assist the management of Unilever Ghana Limited in coming
out with policies, strategies that will enhance employee contribution to the goals and objectives
of the organization.

Other industry players and allied organizations could also adopt recommendations from this
study to fine tune to their performance appraisal systems. This will improve their performance
and make the manufacturing sector very competitive. Also the study could assist human
resource experts in recommending solutions in performance appraisal systems to organizations
facing challenges in maximizing performance of their employees. The study is very significant
because it adds to the literature on performance appraisal system and could serve as a source of
reference for other researchers interested in this study area.
The main limitations of study were;
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Improper maintenance of records sporadically hindered the smooth flow of research work and
easy access to the relevant data. Above all, the element of confidentiality of data impeded the
research. By and large the respondents exhibited very passive and sluggish response to return
the questionnaires sent to them in time. In some cases the questionnaires were retained by them
for long time which was never returned. Research work is a costly exercise and hence financial
limitations also went a long way in creating obstacles in the way of the research project and
slow down the tempo of the work.

METHODOLOGY

The purposive sampling method was employed in the selection of supervisors of the
employees. A total of twelve (12) supervisors were selected for the study. Simple random
sampling technique was used to select 600 employee respondents which cut across all
departments of Unilever Ghana Limited. This was to ensure that all employees have an equal
chance of being included in the sample.

A self-completion questionnaire with closed questions was developed for primary data
collection. According to Bryman and Bell (2003), closed questions have some advantages: it is
easy to process answers; it enhances the comparability of answers, and makes them easier to
show the relationship between variables. The questionnaire composed of two parts thus part
one and two respectively and total twenty (20) items. The first part was about individual
characteristics with two questions by asking respondents’ gender and the name of the mobile
telecom operator they are using currently. The second part contained all four constructs as
suggested by Peng and Wang (2006). Several items on each construct were developed and
adopted from relevant literatures. All the items were measured by using a five-point Likert-type
response scales, anchored at 5 strongly agree and 1 strongly disagrees. The author and five (5)
well trained research assistants personally administered the questionnaires to all participants
and received 600 valid responses representing 84.5% which was a good representative of the
sample size of 710 questionnaires in December 2013.

Pre-testing was used as a valuable indicator to find out the effectiveness of the questionnaire.
This involved selecting, approaching and interviewing a small segment in the same manner
which was followed in the full scale operation. It helped the researcher to know whether the
replies or questionnaire responses provided the type of information needed or respondents
were misinterpreting any of the questions. In addition, results obtained in the pre-test could
suggest new ideas or questionnaire worthy of further examination. Eighty (80) questionnaires
were tested on sample of 80 respondents from PZ Cusons GH LTD to eliminate any ambiguities
and improve clarity in all questions.

Field data was process by sorting, editing, coding and classification as well as tabulation to
present a clearer view of the analysis. The coding was necessary for efficient analysis of data.
For this research, coding decisions were taken at the designing stage of the questionnaire. All of
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the items under each of the 4 constructs were measured by using a five-point Likert-type
response scales, assigning numerals to question responses with 5 coded for strongly agree, 4 for
agree, 3 for neutral, 2 for disagree and 1 for strongly disagree. Responses for demographical
questions (questions 1 and question 3) were also coded. Question 1 requested for respondents’
gender information, numerals were assigned, 1 for male and 2 for female. Question 3 asked for
the mobile network respondents are connected to, responses were categorized and each
assigned numeral between 1 and 5.The response categories in Likert scales have a rank order
and therefore could be referred as ordinal because ordinal scale of measurement is one that
conveys order (Jamieson, 2004). There are many tools techniques appropriate for analyzing
ordinal data. In this study, the research chose the software SPSS for Windows to do analysis.
SPSS for Windows is probably one of the most widely used computer software for analysis of
quantitative data for social scientists. SPSS (Statistical Package for the Social Science) has been in
existence since the mid 1960 and over the years has undergone much revision particularly since
the introduction of personal computers (Bryman and Bell, 2003).

RESULTS
Following the guidelines indicated in the research methodology section, we collected data
during the period in December 2013.

Socio-economic characteristics of respondents

Table 3.1 Socio-economic characteristics of respondents

Minimu Maximu Std.

Variable N Range m m Mean Deviation
Male 340 10 1 11 1.09 .937
Female 260 .00 2.00 2.00 2.0000 .00000
26-35 100 .00 3.00 3.00 3.0000 .00000
36-45 400 .00 4.00 4.00 4.0000 .00000
46-55 100 .00 5.00 5.00 5.0000 .00000
less than 5years 120 .00 6.00 6.00 6.0000 .00000
6years to 10
220 .00 7.00 7.00 7.0000 .00000
years
11years to 20
250 .00 8.00 8.00 8.0000 .00000
years
21years and
above 10 .00 9.00 9.00 9.0000 .00000

Source: Field Data, 2014

From Table 3.1, (68%) of the respondents are male and 32% are female. Besides, (16.7%) of the
respondents are in the age category of 26- 35 years, (66.6%) in category 36-60 years and (16.7%)
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were in the age category of 46 – 55 years. Also 20.0% have worked Uniliver Ghana for less than
5 years, 36.7% between 6-10 years, 41.7% between 11-20 years and 16.6 5% have worked with
Uniliver Ghana between 21 years and above.

Fairness in employee appraisal

Table 3.2: Fairness in employee appraisal

Std.
Variables N Mean Deviation
Statistic Statistic Std. Error Statistic
.Appraisals are conducted frequently 600 3.8600 .09951 .99514
There is a formal system of appraisal 600 3.7900 .09244 .92436
The organizational climate is cooperative 600 3.68 .0923 .8743

Supervisors have a high degree of job 600 3.5000 .11146 1.11464

knowledge

Performance dimensions are seen to be 600 3.3900 .05104 .51040

highly relevant

Employees have an opportunity to appeal 600 2.9700 .12984 1.29845

ratings

Action plans are formed for dealing with 600 2.9700 .12015 1.20147
present weaknesses of the appraisal
system

Source: Field Data, 2014

The variables were, appraisals are conducted frequently, there is a formal system of appraisal
the organizational climate is cooperative, supervisors have a high degree of job knowledge,
Performance dimensions are seen to be highly relevant, Employees have an opportunity to
appeal ratings and Action plans are formed for dealing with present weaknesses of the
appraisal system. The highest a mean value of 3.86 and a standard deviation value of 0.995
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representing the frequency at which Appraisals and the lowest mean is 2.9700 with a standard
deviation of 0.92436 indicating employees having an opportunity to appeal rating.

Drawback in the appraisal system

Table 3.3: Drawbacks of the appraisal

Minimu Std.
Variables
N m Maximum Mean Deviation
Appraisers are only 600 2.00 5.00 4.2000 .77678
interested in the wrongs

Appraisal not linked to 600 1.00 5.00 3.6000 1.19745

rewards
Feedback is not 600 1.00 5.00 3.0000 1.10469
communicated to
employees
Appraiser Bias 600 1.00 5.00 2.0500 1.37070
Appraiser inexperience 600 1.00 2.00 1.3000 .46212
Employee resistance 600 1.00 2.00 1.2500 .43667

Source: Field Data, 2014

The variables were, appraisers are only interested in the wrongs, appraisal not linked to
rewards feedback is not communicated to employees, appraiser bias, and appraiser
inexperience and employee resistance. The highest mean value of 4.2 and a standard deviation
value of 0.77678 representing Appraisers are only interested in the wrongs and the lowest
mean is 1.2500 with a standard deviation of 0.43667 indicating Employee resistance.

DISCUSSIONS

There is a cordial working relation between the rater and the ratee (the person who estimate
and the one being estimated), hence, it promotes fairness in the appraisal of employees. Since,
there is no tension between employees and their superiors; biasness is reduced in the appraisal
process. Supervisors are competent and experienced on the job and therefore put them in a
good position to critically appraise their subordinates Appraiser’s inexperience was not a
drawback as supervisors/ managers are very experience to conduct an effective appraisal. A
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supervisor is qualified, experienced and very much competent to undertake employee appraisal
whiles employee resistance was not reported as a drawback.

The drawback to effective appraisal of employees in Unilever Ghana limited is

supervisors/managers are usually interested of the wrongs and were indicated with a mean of
4.2. This finding is in support of Ahmed (1999) who reports the interest in the wrongs of
employees is the most important drawback of employee appraisal. Thus the respondents rated
this drawback as high. Appraisal must concentrate on both the positives of the employee and as
well as the negatives. But supervisors are only interested in finding out wrongs and addressing
them. Thumps up by supervisors in areas that employees are doing good will serve as a
motivation for them to encourage them to even soar greater heights.

The second drawback has to do with appraisal not being linked to reward and was reported
with a mean of 3.6. Appraisal system is not tied to the reward and that does not auger well for
the organization. Well performed employees are only encouraged to do much more rather than
raising their pay and are paid the same amounts to with the lazy ones. This does not encourage
productiveness on the part of the hard working employees. Feedback from supervisors to
appraises was in controversy and remained neutral, besides there is no bad blood between
employees and supervisors, hence objective appraisal is conducted Starluck and Folger (1997)
suggest that the appraisal process can become a source of extreme dissatisfaction when
employees believe the system is biased, political or irrelevant. Thus fair appraisal is conducted
by supervisors and many a times employees are satisfied with their ratings

They were of the opinion that some supervisors have their favorites and accordingly give them
high marks during appraisal. Employee perceptions of fairness of performance appraisal have
been shown to be linked to satisfaction with the system. Fairness of performance appraisal has
been studied by a number of researchers over time. In their review of performance appraisal
research Bretz et al, (1992) indicated that the most important performance appraisal issue faced
by organizations is the perceived fairness of the performance review and the performance
appraisal system. Their findings suggested that most employees perceive their performance
appraisal system as neither accurate nor fair.

CONCLUSION

The study further found that the appraisal method used by Unilever Ghana is management by
objective. The use of this method by supervisors was found to be fair. The fairness is manifested
by way of no intimidation by supervisors and the appraisal is conducted in line with the
appraisal policy of the organization. Despite the effectiveness of the appraisal system of
Unilever Ghana, the study found that there is one major drawback in the appraisal system
which was that appraisal is not linked to reward.
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RECOMMENDATIONS
Based on the outcome of the study, it is imperative on the part of management to take a second
look at the drawback revealed so that the maximum impact of employee appraisal can be
achieved. Unilever Ghana should also adopt other employee appraisal methods in addition to
the management by objective method. This will ensure that the shortcomings of management
by objective can be controlled through the use of other methods as well. For instance it can
occasionally use 360 degrees of appraisal which has been proven to be quite effective as well.

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