The Impact of Performance Appraisal on Employees’ Productivity in Financial Institutions: A Case of the United States Banking Sector

Abstract

This research investigated the impact of performance appraisal on employee’s productivity in financial institutions, with a focus on the United States banking sector. In carrying out the study, an Expost-Facto design was adopted. The study was carried out in United State of America. The targeted population for the study comprised management staff, senior staff and junior staff in the banking institutions in United State of America. A stratified random sampling technique was used to select 15 management staff, 45 senior staff and 60 junior staff which gave a total of 120 respondents used for the study. The instrument used for data collection was a structured questionnaire titled “Performance Appraisal and Employees’ Productivity Questionnaire (PAEPQ)”. Face and content validation of the instrument was carried out by an expert in test, measurement, and evaluation in order to ensure that the instrument has the accuracy, appropriateness, and completeness for the study under consideration. The reliability coefficient obtained was 0.91, and this was substantially high enough to justify the use of the instrument. The researcher subjected the data generated for this study to appropriate statistical technique such percentage analysis to answer research questions and simple regression to answer hypothesis. The study found out that there is significant impact of performance appraisal on employees’ productivity in financial institution in United States. Also it was found out that there is significant impact exerted by the independent variables i.e. Impact on the dependent variable which is productivity. On this basis the study concluded that for financial institutions to benefit from performance appraisal, they need to refine their systems to unleash employee potential and drive success. One of the recommendations was that financial institutions in the United States banking sector should prioritize the implementation of regular training programs for managers and supervisors responsible for conducting performance appraisals.