ABSTRACT The study was designed to assess the effectiveness of the Staff Performance Appraisal System of Ghana Health Service, a case study of Manhyia District Hospital.  Specific objectives of the study cover measurement of employees understanding of the objectives of the appraisal system, its process and procedures.  Also, the study measures employees perception of the appraisal system, how it has been able to identify employees strengths and weakness and finally finds out whether all set objectives are achieved.  The study population was the entire staff of Manhyia District Hospital totaling 221.  The researcher used sample size of 52% and obtained data using a elevensectioned self completed questionnaire and interviews.  Data presentation and discussions were supported with bar and line graphs, pie chart and tables to make the whole work easy to read and understand by all and sundry. The study revealed that the Staff Performance Appraisal exercise was not given the seriousness it deserves.  Again, majority of the staff have knowledge of the performance appraisal system in the hospital and agreed that the system establishes key objectives, so the researcher recommended improvement in communication and introduction of training programmes highlighting the relevance of  performance appraisal and its structures.       TABLE OF CONTENTS                                                                            PAGE  Declaration …………………………………………………………..………..………....i Dedication…………………………………………………………………………….....ii Acknowledgement ……………………………………………………………………...iii Abstract……………………………………………………………………………....…iv Table of contents…………………………………………………………………….…..v   CHAPTER 1: INTRODUCTION  1.1 Background of the Study……………………………………………………….……1 1.2 Historical background of Performance Appraisal in GHS…......................................1 1.3 Statement of the Problem…………………………………………...……………….3 1.4 Objectives of the Study………………………………………………………..…....4  1.4.0 Main Objective………………………………………..…………...……………...4  1.4.1 Specific Objective…………………………………………………..…………….4  1.5 Research Questions…………………………………………………...……………..5  1.6 Significance of the Study……………………………………………………………5  1.7 Scope of the Study…………………………………………………………………..6  1.8 Overview of Research Methodology………………………………………………...6  1.9 Limitation of the Study……………………………………………………………...7  1.10 Organization of the Study………………………………………………………….7 CHAPTER 2: LITERATURE REVIEW   2.1 Introduction…………………………………………………………………………8 2.2 Performance Evaluation and Measurement………………………………………….8 2.3 Appraisal……………………………………………………………………………..9 2.4 Performance Appraisal (PA)……………………………………………………….10 2.5 Developmental Background of Performance Appraisal……………………………12 2.6 Performance Appraisal Systems……………………………………………………14 2.7 The Role of Performance Appraisal………………………………………………..15 2.8 Objectives of Performance Appraisal………………………………………………16 2.9 Advantages/Effects of Performance Appraisal…………………………………….17 2.10 Performance appraisal Biases and Errors…………………………………………19 2.10.1 Horns and Halos Effect…………………………………………………………20 2.10.2 Purposeful Bias…………………………………………………………………20 2.10.3 Appraisal Bias…………………………………………………………………..21 2.10.4 Self Bias………………………………………………………………………...21 2.10.5 Variations in Reporting Standards……………………………………………..21 2.10.6 Emphasis on the recent past…………………………………………………….22 2.10.7 The Central Tendency…………………………………………………………..22 2.10.8 Excessive Stiffness or Lenience………………………………………………...23 2.11 Limiting the Effects of Supervisory Bias…………………………………………24 2.12 Performance Appraisal Techniques……………………………………………….25 2.12.1 Critical Incident Method………………………………………………………..25 2.12.2 Weighted Checklist……………………………………………………………..25 2.12.3 Paired Comparison Analysis……………………………………………………25 2.12.5 Graphic Rating Scales…………………………………………………………..25 2.12.6 Essay Evaluation……………………………………………………………….26 2.12.7 Behaviorally Anchored rating Scales……………………………………….….26 2.12.8 Performance Ranking Method…………………………………………….…...26 2.12.9 Management by Objectives (MBO) Method…………………………………..26 2.12.10 360 Degree Performance Appraisal…………………………………………...27 2.12.11 Forced Ranking (forced distribution)………………………………………….27 2.12.12 Behaviorally Observation Scales………………………………………………27 2.12.13 Self-Appraisal………………………………………………………………….27 2.13 Developing employee Performance Appraisal Plans (EPAP)…………………….31 2.14 Basic Steps in a Performance Appraisal...………………………………………...33 2.15 Problems during Performance Appraisal…………………………………………34 CHAPTER 3: RESEARCH METHODOLOGY  3.1 Introduction………………………………………………………………………..35 3.2 Research Approach…………………………………………………………………35 3.3 Research Strategy…………………………………………………………………..35 3.4 Sources of Data……………………………………………………………………..36 3.4.1 Primary Data……………………………………………………………………...36 3.4.2 Secondary Data…………………………………………………………………...37 3.5 Study Population…………………………………………………………………...37 3.5.1 Sample Size………………………………………………………………………37 3.5.2 Sampling Method………………………………………………………………...38 3.6 Data Collection Methods/Instruments……………………………………………..38 3.7 Analysis of Empirical Material……………………………………………………39 3.7.1 Descriptive Statistics…………………………………………………………….39 3.7.2 Reliability…..……………………………………………………………………40 3.8 Organizational Profile……………………………………………………………..40 CHAPTER 4: DATA PRESENTATION AND DISCUSSIONS  4.1 Introduction……………………………………………………………………….43 4.2 Sample and Response Rate………………………………………………………..43 4.3 Year of Service of Respondents…………………………………………………...44 4.4 Gender of Respondents……………………………………………………………45 4.5 General findings on Performance Appraisal System at Manhyia Hospital………..46 4.6 Level of understanding by employees of the performance appraisal system, its  processes and procedures at Manhyia Hospital……………………………………......47 4.7 The objectives of the appraisal system at Manhyia Hospital………………………49 4.8 Effectiveness of the appraisal system at Manhyia hospital in achieving the objectives……………………………………………………………………………….51 4.9 Research Question…………………………………………………………………54 4.10 Challenges of MDH’s PAS………………………………………………………58 CHAPTER 5: SUMMARY OF FINDINGS, CONCLUSIONS AND                        RECOMMENDATIONS  5.1 Introduction………………………………………………………………………61 5.2 Summary of Findings……………………………………………………………61 5.2.1 Perception of Employees of the objectives of the Appraisal System at MDH   61 5.2.2 Objectives of the appraisal system at Manhyia Hospital………………………62 5.2.3 Achievement of the Objectives of the Appraisal System at MDH…………….62 5.2.4 Ability of the PAS to identify employees’ strengths and weaknesses, and programmes put in place to address weaknesses and reward performance……………63  5.2.5 Challenges of MDH’s PAS………………………………………………………64 5.3 Conclusion………………………………………………………………………….65 5.4 Recommendations………..………………………………………………………...65 CHAPTER ONE INTRODUCTION 1.1 Background of the Study Performance Appraisal is a major subject of controversy in management circles. While business leaders see the need for appraisal systems, they are frequently disappointed in them. One of the responsibilities of management is to ensure that an organization functions effectively and efficiently. In order to achieve these goals, managers must be able to determine and assess performance levels of both an organization and its individual employees (Kurt 2004).    Modern businesses depend upon measurement and analysis of performance. Measurements must derive from the company’s strategy and provide critical data and information about key processes, outputs and results. Data and analysis support a variety of company purposes, such as planning, reviewing company performance, improving operations, and comparing company performance with competitors’ or with ‘best practices’ benchmarks (Averson, 1998).    1.2 Historical Background of Performance Appraisal in Ghana   Health Service As part of the Ghana Health Service human resource management responsibilities, the procedure for evaluation of staff performance in Ghana Health Service was done by using standardized Civil Service forms and processes for conducting staff performance appraisal.   Members of staff were to be assessed once a year. In order to focus performance appraisal on performance improvement and less on promotion, the Ghana Health Service developed its own performance appraisal process in the year 2003.  The purpose of the new process was to evaluate staff performance quarterly, for which staff were to set their own objectives quarterly and monitor their achievements at the end of each quarter in a year.  This approach was piloted in Ashanti Region, Eastern Region and Brong Ahafo region in Ghana.   An evaluation of this quarterly appraisal system also revealed that though helpful and better than the Civil Service annual appraisal system, the quarterly one was too cumbersome and time consuming.  In 2006, the revised Staff Performance Appraisal (SPA) was introduced by Ghana Health Service where objectives are set annually but with an abbreviated six months review of performance activities.  At present, this is what is being used in the Ghana Health Service.     Though, it is fairly easy to prescribe how the performance appraisal process should work, descriptions of how it actually works in practice could be rather discouraging.  This study is therefore meant to assess the effectiveness of the Performance Appraisal System in Ghana Health Service, a case study of Manhyia District Hospital.