EFFECT OF PERFORMANCE MANAGEMENT ON SERVICE QUALITY IN PUBLIC SECTOR

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Performance Management is a strategic approach to management, which equips leaders, managers, employees and stakeholders at different levels with a set of tools and techniques to regularly plan, continuously monitor, periodically measure and review performance of the organization in terms of indicators and targets for efficiency, effectiveness and impact. This system ensures that all the leaders, managers and individuals in the organization are held accountable for their actions which should bring about improved quality service delivery and value for money (Burden, 2010).

Volatile economic environment characterized by phenomena such as globalization and deregulation of markets, changing customer and investor demands and ever increasing product –market competition has become the norm for most organizations. To compete and have a sustainable business, organizations have to continually improve their performance by reducing costs, innovating on products and processes and furthermore improve on product or service quality, speed to market and productivity (Pretorius, 2012).

To achieve positive performance results in all the parameters mentioned above, organizations have increasingly recognized that their employees play a very critical role in business and if managed properly can be a source of competitive advantage (Pfeffer, 2008). Creating competitive advantage through people requires careful attention to the practices that best leverage these assets. The use of formal performance measures based on explicit and objectively defined criteria and metrics is a fundamental component of both public and private incentive systems. These performance measurement systems must promote careful analysis of workers’ efforts, tasks, work arrangements and output, establishing work procedures according to a technical logic and setting standards and production controls to maximize efficiency (Radin, 2012).

The basic assumption underlying performance management models is that employees perform better when their performance is more tightly linked to their effort or output (Rothstein, 2008). Further to this, organizations are expected to perform well and achieve their broad objectives on condition that their employees are motivated. It is therefore paramount for organizations to use performance management systems (PMS) that are fair and compensate employees accurately. However, reality with PMS in most private and public sectors typically involve a lot of challenges such as political and environmental influences and non standardized outputs which makes the accurate measurement of performance and construction of performance benchmarks difficult and costly at times (Dixit, 2012).

Against this background, organizations still put lots of effort and commit a lot of resources to design and implement performance management systems that suit their employee expectations in order to motivate them. This is based on the belief that if employees are motivated to work, it is more likely that the organization can perform well too through proper service quality.

This research study therefore intends to focus on evaluating the impact of Local Government Performance Management System (PMS) on quality service, evaluate strengths and weaknesses of this system and hence make recommendations on how to make improvements.

1.2   STATEMENT OF THE PROBLEM

According to Agagu (2008), it has been observed that over the past few years Nigeria has experienced an upsurge in the number of protests. A number of reasons have been given for these protests. However, the main reason appears to be linked to poor service delivery of basic community services such as running water and sanitation, electricity, roads, housing and schools. It must be stressed here that protests are just symptoms of a real problem. The main problem in this case could be poor performance of the Local Government structures due to numerous reasons. One of the reasons can be poor Performance Management Systems, which do not fairly recognize and remunerate productive employees leading to low morale at the workplace and consequently poor quality service delivery or productivity.

The process of managing the performance of employees in an organization is often vague, the areas of performance for which an individual is responsible are often unclear and evaluations are often not based on actual performance but on the perceptions and judgment of an employee’s immediate boss.

Therefore, an ill-conceived and ill-considered performance management system could create tensions in the organization.

1.3   OBJECTIVES OF THE STUDY

The objective of the study is to examine the effect of performance management on service quality at the Olorunda Local Council Development Area. However, the specific objectives shall include:

1.  To examine the relationship between performance management and service quality.

2.  To examine the relationship between performance management and employees’ attitude to work.

3.  To examine the relationship between performance management and organizational performance.

4.  Lastly, the study shall provide plausible recommendation and proffer necessary policies for possible implementation

1.4    RESEARCH QUESTIONS

The undertaking of this research project will beam a searchlight on the following research questions:

1.  Is there a relationship between performance management and service quality?

2.  Is there a relationship between performance management and employees’ attitude to work?

3.  What is the relationship between performance management and organizational performance?

4.  What are the plausible recommendation and necessary policies for possible implementation?

1.5    RESEARCH HYPOTHESES

The researcher intends to test the following hypotheses;        

Hypothesis 1:

Ho:  There is no significant relationship between performance management and service quality.

H1:   There is a significant relationship between performance management and service quality.

Hypothesis 2:

Ho:  There is no significant relationship between performance management and employees’ attitude to work.

H1:   There is a significant relationship between performance management and employees’ attitude to work.

Hypothesis 3:

Ho:  There is no significant relationship between performance management and organizational performance.

H1:   There is a significant relationship between performance management and organizational performance.

1.6    SCOPE AND LIMITATION OF THE STUDY

This study will explore and explain the effect of performance management on service quality at the Olorunda Local Council Development Area.

By extension, the study shall also cover appraisal system and training pattern as ways of improving workers performance in an organization.

This study shall however be limited to Olorunda Local Council Development Area of Badagry Local Government, Lagos State.

1.7    SIGNIFICANCE OF THE STUDY

The whole essence of performance management is to get better result by understanding and managing performance within an agreed framework of planned goal and competent requirement. The study therefore is important as one of the objectives of any business is to increase workers performance in order to achieve outstanding growth and quality services.

This study is relevant to managers who intend to understand and improve workers performance through effective performance management. It will contribute to identifying causes of resistance and stumbling blocks to the acceptance and implementation of the proposed performance management system. Therefore the study aims at providing a better understanding of employees’ cognitive thought-processes, which could contribute to the tailoring of a suitable performance management system that would positively affect all stakeholders

1.8    ORGANIZATION OF THE STUDY

The study is segmented into five chapters. The chapter one contains the general introduction, research problem; objectives of the study, scope of study, significance, e.t.c.

Chapter two concentrates on review of relevant literature on the concept of the effect of performance management on service quality at the Olorunda Local Council Development Area.

Chapter three shall explain the research method adopted for the study while chapter four will focus on the analysis of hypotheses and chapter five contains the summary of the study; conclusion drawn and recommendations.

1.9    DEFINITION OF TERMS

Presented below are the operational definitions of terms used in this study:

Performance: An action, task, or operation, seen in terms of how successfully it was performed Management: The process of dealing with or controlling things or people in an organization.

Performance management: Performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc.

Organization: An organization is a social group which distributes tasks for a collective goal.