EFFECT OF PERFORMANCE APPRAISAL INITIATIVES ON AN EMPLOYEE’S

PERFORMANCE AT KENYA POWER AND LIGHTING COMPANY, MOMBASA

COUNTY

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Performance appraisal represents a crucial processes within the broader spectrum of performance
enhancing initiatives that pursue to improve employee productivity through an increase in
accountability and underlining performance differentials between particular employees (Samnani
& Singh, 2021). The rapid change in global marketplace, portrayed by increased technological
progress, it needs companies to demand a more flexible and competent personnel to be adaptive
in order to stay competitive (Singh, 2021).

Performance appraisal is a procedure which is used in obtaining, analysing and utilizing the
information which is recorded concerning the comparative value of different personnel (schuler,
2022). Thus, performance appraisal is an intended collaboration between employees and their
supervisors during which the former appraise the performance of the latter to identify strengths
and weaknesses with the aim of improving future performance. Performance appraisal is a
significant component of performance management.

Employee performance is an individual measurable behaviour which was relevant for

organizational goal achievement (Dessler, 2021). Performance appraisal initiatives are reflected
as one of the vital contributing cause to the success of an organization. It is noted by (Biswajeet,
2022) that since the organization will only succeed when performance of employees is measured
accurately, it is therefore imperious to apply performance scale which should take into
contemplation the employee motivation, effective market strategies, productivity and efficiency,
These elements are the key inter-play which determines how well the organization is or will
perform.
Companies that seek to increase efficiency through employees must be able to manage the
initiatives and results of all employees especially in an increasingly complex environment and
the speedy change of technology which has formed some new trials to numerous organizations.
Management and human resource managers must be equipped to address the changes evolving in
terms of the employee's competencies and skills in response to the customers’ wants and
competition (Grubb, 2022). Performance appraisal initiatives are considered as one of the key
contributing factors to the success of an organization. Performance appraisal often includes
formal review and feedback gatherings, and may include processes for forming work goals,
conducting self-appraisals, and setting objective of the performance.

Employees are the components that are essential to organization which implement the proper
standards to ensure the organizations goals is achieved. The organizations should do their best to
invest in its personnel to fulfil its mission and goals (Gungor, 2022). Employee’s efficiency is a
important area in the human resource management and industrial relations since use of the
performance management practice, it has enriched the recruitment process and selections
required, training and involvement of the employments, improve the knowledge and competence
of the employees, increase the motivation of the workers, lessen absenteeism and promote
retention of the quality employees.

Globally, Performance appraisal an issue of increased global resonance, with the corporate case
regularly positioned as its Centre-piece (Szu-Fang, 2021).The discussion has been driven by
changes in labour market which impacts the employee’s performance. Increasing number of
international companies and the cooling global economy coincide to highlight the shared topic of
performance appraisal and their influence on the measurement of corporate unit performance
(lair, 2020). Organizations such as KPLC not only need to respond to these changes in order to
remain competitive, but also need to anticipate future changes that will require yet more redesign
in the institutions‘ forms and initiatives. It is a well-known fact that organizations all over the
world play a significant role in the development of any nation‘s workforce and the economy in
general.

At the regional level, research in HRM and employment associated concerns have received
considerable attention in developing countries, it has an vast amount of work on African
countries has been carried out on problems such as economic development, trade, foreign aid,
reduction of poverty, and various aspects such as economic mismanagement, political
ineffectiveness and corruption which have influenced negatively the economic and industrial
development (Kamoche, 2022). Although the effective management of human resources is
critical in the successful management and development of organizations, numerous studies have
documented the difficulties and challenges that are affecting most organizations in Africa
(Tessema, 2022). Some of these challenges include inappropriate management initiatives, weak
and inefficient decision making, political patronage and governmental interference, inability to
fire people, inadequate and non-competitive rewards, particularistic recruitment procedures and
other forms of favouritism among other factors (Tessema, 2018).

Kenya aims to create a globally competitive and adaptive human resource to meet the
requirements of Vision 2030 (Namukana, 2021). Kenya’s main potential lies in its people and
their creativity, work ethic, education, and their entrepreneurial and other specialized skills. To
ensure significance of human resource, every organization has to decide upon the content to be
appraised before the program is approved. Generally, content to be appraised is determined on
the basis of job analysis. Content to be appraised may be in the form of contribution to KPLC
objectives like production, cost saving, return on capital etc. Other measures are based on
behaviour, which measure observable physical actions, movements. Finally, there are traits
which are measured in terms of personal characteristics observable in employee job activities.
Content to be appraised may vary with the purpose of appraisal and type and level of employees
(Chepkoech, 2022).

In order to appropriately assess how well individuals output contributed to the overall
achievement of goals and objectives of KPLC, the organization begun applying the employee
performance appraisal system. This application has given the KPLC base level criteria for all its’
operations which in turn provides pointers toward areas needing improvement.

1.1.1. Kenya Power and Lighting Company

Kenya Power and Lighting Company (KPLC) is a limited liability company, where the majority
shareholder is the government of Kenya and its institutions, while the rest is owned by private
shareholders. KPLC is responsible for ensuring that there is adequate line capacity to supply and
maintain quality of electricity across the country i.e. distribution and retailing of electricity.
Before a major power sector restructuring in 2019, KPLC also managed all generating stations
on behalf of the state. Reform of power sector commenced in the early 2019’s and has made
steady progress. The Electric power Act 2019 and the Energy Act in 2020, accelerated the
reform by creating an autonomous regulatory body (KPLC report Q3 2020). On Tuesday June
01, 2020 Kenya Power and Lighting Company re-branded to Kenya Power in what many brand
experts believe is a long overdue effort to reinvent itself as a modern corporate. The rebranding
was well timed to reflect the demands of the new constitution and vision 2030 which is to a
alleviate power problems in the country.

1.2 Statement of the problem

The human resource system can become more effective by having a valid and accurate appraisal
system used for rating performances of the employees. An effective appraisal may not only
eliminate behaviour and work-quality problems but also used to monitor the success of the
organization’s recruitment and induction initiatives. Performance appraisal system helps the
management in deciding about the promotions, transfers, rewards and motivates employee to
contribute more (Joseph, 2022). It helps to identify the under-performers and decide whether you
want to keep them hoping for improvement or sometimes have to let them go. Performance
appraisal records can retrospectively review the changes in the performance in future hence if
you use the performance appraisal system correctly and smartly, the results won’t leave you
indifferent.

Unfortunately, the number of the organizations using an effective performance appraisal system
is limited (Benedetto, 2022). In today’s business world, it seems like a chore for organizations to
allocate significant intangible resources for planning, developing and engaging in employee
performance appraisals. Despite this allocation, most organizations cannot afford to give formal
performance evaluations. It is also very uncommon for them not to link most of human resource
functions with performance appraisal. Ineffective feedback mechanism influences performance
appraisal since it fails to initiate the actions which can empower the employees. Some
organizations continue to lose top officials as a result of poor measurement of performance hence
there is need to investigate the problem that organizations go through as a result of implementing
performance measurement (Leigh, 2021). An unfair practice or one that is deemed to be unfair
will usually have a negative effect on employee attitude and perception often towards that which
is being measured and towards those tasked to do the measuring. In most cases, organizations
focus on output, general performance, efficiency, and organizational profit above all other
objectives .The managers have the responsibility to invest in the effective and efficient systems
such as goal setting, coaching and having effective feedback mechanism systems through use of
efficient performance appraisal, therefore, boosting the productivity and engagement of the
employees.

Most of the studies conducted in Kenya such as (Chaponda, 2022) have dwelt on employee
perception on the effectiveness of performance appraisal. There is little literature available on the
effect of performance appraisal on employee performance in public organizations. Nonetheless,
effective performance appraisal has the potential to influence employee performance which is
crucial key to any organization. Therefore, this study sought to fill these gap.

1.3 The General Objective

The general purpose of this study will be to establish the effect of performance appraisal
initiatives on an employee’s performance at Kenya Power and Lighting Company, Mombasa
County

1.4 Value of the Study

The purposes of the study is to increase knowledge on performance appraisal to aid organizations
to assess their personnel with the view of providing guidelines for positive progress. This will
also vastly reflect the significance of consistence performance appraisal by establishing a better
understanding and appreciation between employer and employee by emphasizing areas of mutual
interest.

There are studies portrayed in the existing frame of research have emphasized the rising level of
dissatisfaction with performance appraisal alongside an extensive range of faults, such as lack of
justice, bias and failure to promote anticipated behaviours, undermining the prospective impacts
of performance appraisal on employee productivity. The study will bridge a gap between human
resource appraisal information and performance review system by adding a fresh field based on
the data hence benefits that can accumulate from this study are plentiful.

The study will generate information that may be used by various stakeholders interested in the
port’s performance. It will enable the board of directors and management of KPLC to identify
areas of weakness that need attention and foster sound strategic choices to deliver maximum
investment value. The study stimulates further interest among future researchers in this dynamic
area of performance as well as contributing to the body of knowledge.

1.5 Scope of the Study

This study will focus on performance appraisal as human resource activity and how this affects
the employee performance. The employee performance will be measured in terms of goal setting,
effectiveness of feedback mechanism and how training and development effects performance
management in relation to the methods of performance appraisal. The study mainly will target
KPLC in Mombasa County which aims to improve employee performance.