Factors Affecting Effectiveness of the Performance Appraisal System in Bank of Uganda

Abstract

This study concentrated on the factors that impede effectiveness of the performance appraisal system in Bank of Uganda. Performance appraisals help organisations measure performance, motivate employees and most commonly help to make HR related administrative decisions such as promotions and rewards. The study objective was to determine the influence organizational support, communication and managerial practices have on the effectiveness of the performance appraisal system in Bank of Uganda. The study adopted a cross-sectional research design to collect quantitative and qualitative data using structured and semi-structured questionnaires and an interview guide respectively. The target population was Middle Managers and Banking Officers at Bank of Uganda Headquarters, Kampala. The collected quantitative data was analyzed using Statistical Package for Social Science to inform the relationship between variables. Pearson correlation coefficient/Product Moment and regression analysis was also used to measure the degree and strength of the relationship between factors as independent variable and effectiveness of the performance appraisal system as dependent variable. Qualitative data was analyzed using thematic and content analysis which reinforced the narration of the quantitative data. The study revealed that the identified factors all had a statistically strong positive relationship: organization support (5.7%), communication (46.9%), managerial practices (38.5%) and effectiveness of the performance appraisal system. It can be concluded that communication and managerial practices greatly impact the effectiveness of the appraisal system in BOU. The study therefore recommends the Human Resources Department to sensitize staff in Bank of Uganda on the importance of performance appraisal to iron out the gaps identified by the Supervisors. In addition, Supervisors should be trained to be assertive, management skills and interpersonal relationships. This will go a long way in reducing subjectivity in scoring staff based on friendships and negative sentiments that continue to compromise an otherwise effective performance appraisal system in the Bank.