Submitted in fulfillment of the requirements for the Degree of Master of Technology: Human Resources Management, Durban University of Technology, 2013. / The research investigation focused on performance appraisal policy and its impact on employee performance in Guaranty Trust Bank in Nigeria. The aim of the study was to ascertain the extent to which the performance appraisal policy at Guaranty Bank contributed to employee performance. Arising out of the performance appraisal reviews, an important finding revealed that the training which employees received resulted in improved job performance. The performance appraisal reviews also showed that when feedback reports were effectively used they consequently improved employee performance. The research design was quantitative in nature and a closed ended structured questionnaire was used to gather the primary data. The survey method was used for all the employees of Guaranty Trust Bank in Nigeria. The questionnaire was administered to all 150 target respondents using the personal method and a high response rate of 100% was obtained. The data gathered were analyzed using the Statistical Program for Social Sciences (SPSS) for the statistical tests. The initial analysis involved the use of descriptive statistical tools. The main findings revealed that employee participation in the performance appraisal was generally high and this increased job satisfaction and enhanced employee performance. The results also revealed that manager-subordinate interaction was very cordial and this boosted employee performance. Moreover, the majority of respondents preferred performance appraisal to be used regularly for career pathing in the organization. The study recommends a set of guidelines which could be used in improving the current performance appraisal policy and further boost employee performance. The study concludes with directions for future research.

A number of authors have portrayed leadership as a vital factor in the success or failure of an organization. Hence Bass (1994; 1997) believes that excellent organizations begin with excellent leadership and organisations reflect their leadership (Maritz, 1995). Therefore, successful organisations reflect their leadership (Maritz, 1995). In an attempt to investigate the aim of this research, various performance and leadership concepts and theories were investigated: the trait concept, behavioural approaches and situational/contingency approaches. Every one of these theories gave a different explanation to leadership. Furthermore, transactional, and transformational leadership were also discussed. The difference between these two models according to Bass and Avolio (1994) is that the work performance of the followers of transformational leadership is usually beyond expectations, while transactional leadership, at best, leads to expected performance. In terms of performance, it is argued that employee work performance can lead to a successful organisational performance. This is because several organisations attribute their business success to the work performance of their employees. According to Collis and Montgomery (1995) employee work performance has a major positive influence on organisational performance. Nevertheless, the accomplishment of an organisation is dependent on the leader’s ability to enhance human resources; hence “effective organisations require effective leadership” (Maritz, 1995). Transformational leadership was identified as the effective leadership style that can motivate workers to improve on their performance by instilling trust and confidence in them. Transformational leadership is superior to both transactional and non-transactional leadership because it makes workers loyal to the mission and vision of their organizations. Bass (1990) states “that the leadership research over the years has proved that loyalty is more powerful than tangible inducements.” Furthermore, non- transactional leaders avoid decision making, allowing their subordinates to take charge of the work process (Bass 1990). This research focuses on the relationship between leadership and employee work performance in a Nigerian Courier Company. In addressing this aim, a Nigerian Courier company was selected as the research context because of its success in the Nigerian turbulent business environment that is plagued by the country’s economic, social, and political troubles (McKern, Meza, Osayande and Denend, 2010). The research hypothesis of this research was generated to investigate leadership and employee performance. Leadership and performance were also identified as the research independent and dependent variables. Thus the research hypotheses were as follows: Hypothesis 1. Null Hypothesis: There is no significant positive linear relationship between employee performance and transformational leadership Alternative Hypothesis: There is significant positive linear relationship between employee performance and transformational leadership Hypothesis 2. Null Hypothesis: There is no significant positive linear relationship between employee performance and transactional leadership Alternative Hypothesis: There is significant positive linear relationship between employee performance and transactional leadership Hypothesis 3. Null Hypothesis: There is no significant positive linear relationship between employee performance and non-transactional leadership. Alternative Hypothesis: There is significant positive linear relationship between employee performance and non-transactional leadership. The general methodology included the use of a valid and reliable instrument known as the Multifactor Leadership Questionnaire (MLQ) and the company’s performance appraisal process. These instruments were used to collect information about employee work performance. The validity and reliability of the MLQ is not in doubt because it was formulated from the full range leadership development theory of Bass and Avolio (1997) and has been used extensively worldwide (Bass and Avolio, 1997). The research data was analysed using Statistica (StatSoft, 2011). Once the data was imported the necessary leadership factors were calculated as per the MLQ scoring key. From the eight factors a further three factors were generated namely transformational, transactional and nontransactional leadership. The data was checked and described using frequency tables and descriptive statistics, followed by correlation matrices coupled with their corresponding scatter plots. The research data was tested for consistency and reliability. Sekaran (2000) states that in order to determine the reliability of a measure one needs to test for both consistency and stability. For this research, linear correlation and regression analysis was used. The outcome of the first investigated hypothesis confirmed that there is a strong significant, positive linear relationship between employee performance and transformational leadership (ρ<0.0001). However, the findings on the null hypothesis, states that transformational leadership has no significant positive linear relationship with employee performance. The null hypothesis is REJECTED, because the model is significant at ρ<.0001. Thus, the alternative hypothesis is ACCEPTED because it concludes that there is sufficient evidence, at the 5% level of significance, that there is significant positive linear relationship between employee performance and transformational leadership. The second hypotheses found that with 5% level of significance there is no significant positive linear relationship between transactional leadership and employee performance (ρ =0.317). It must be noted that since the correlation is not significant the null hypothesis which states that there is no significant positive linear relationship between employee performance and transactional leadership was NOT REJECTED. The outcome of the third hypotheses support the null hypothesis, because the negative linear relationship between employee performance and non-transactional leadership is not significant (ρ = 0.6718). This informed the conclusion that at the 5% level of significance, there is no positive linear relationship between non-transactional leadership and employee performance. The findings of this research favour the conclusion drawn by Brand, Heyl and Maritz (2000) that suggested a more significant relationship between transformational leadership and employee performance, than any other leadership style. Evidence put together in the retail and manufacturing sector of South Africa, and the armed forces of the United States of America, Germany and Canada, point in the direction of the strong, positive effects of transformational leaders (Brand, et al., 2000). Again the effectiveness of transformational leadership can be reinforced by the research directed by Ristow, Amos and Staude (1999), which resolved that the effectiveness of transformational leadership was greater in a South African cricketing environment. Hayward, Davidson, Pascoe, Tasker, Amos and Pearse (2003) conducted research in a pharmaceutical organisation and found a positive linear relationship between transformational leadership and employee work performance. These research outcomes clarify the investigation by Pruijn and Boucher (1994) which established “that transformational leadership is an extension of transactional leadership” (Bass, 1997). The difference between these two models according to Bass and Avolio (1994) is that the work performance of supporters of transformational leadership is usually beyond expectation, while the behaviour of the supporters of transactional leadership, at best, leads to anticipated work performance. This research will be used to improve the relationship between the leaders and employees of the courier company under investigation. It will be useful for the placement of individuals to leadership positions in the company. It will also impact on how future leadership training will be conducted by the company, and of course add to the body of knowledge. This is supported by research conducted in the service sector which states that “transformational leadership affects performance over and above transactional leadership” (Geyery and Steyrer, 1998).