Effect of Appraisal Standards on Employees’ Performance Appraisal in SACCOs of Laikipia County

Abstract

Savings and Credit Cooperative Organizations (SACCOs) are significant providers of savings, credit and insurance services to a large portion of the Kenyan population. As they grow in number and size a demand to improve management of SACCOs’ staff productivity increases. Consequently, performance appraisal has been adopted as a measure to achieve this goal. However, the 83 active SACCOs in Laikipia County have had performance appraisal hurdles based on the report of the County Cooperative Director’s office. The same report indicates that these hurdles have been brought about by lack of appraisal standards. When a SACCO fails to carry out proper and accurate staff appraisals, it consequently fails in meeting its obligations to its members. The purpose of this study was to analyze the effects of appraisal standards on employees’ performance appraisal in SACCOs of Laikipia County. This study was grounded on the Equity Theory by John Stacey Adams that says that satisfaction is based on a person’s perception of fairness. It adopted descriptive survey research design and the target population was the managers and board members from the eighty three SACCOs in Laikipia County. Since each SACCO has one manager and nine board members, the total population was eight hundred and thirty members. Sample size determination formula for a finite population was used to arrive at the sample size of three hundred and thirty nine members who comprised of eighty three managers and two hundred and fifty six board members. Both purposeful and stratified sampling were used to attain the sample size. Quantitative and qualitative data were obtained through a structured questionnaire. Quantitative data was analyzed using descriptive statistics and presented in form of frequency and percentage tables, bar charts and pie charts. The analysis was done by SPSS (Statistical Package for Social Sciences) version twenty two to generate those measures. Qualitative data was used to supplement interpretation of quantitative data. Based on the findings the study concluded that SACCOs generally carried staff performance appraisal without clarity on their practicality in boosting the SACCO’s performance. On overall performance appraisal, most SACCOs do not generate or receive reports outside those prepared through the Savings and Credit Cooperative Regulatory Authority (SASRA) driven initiatives. The appraisal process should be seen to be both fair and to regard the size of the SACCO. SASRA should conduct a review of the practicality of guidelines that it issues on staff performance appraisal. The standards must be regularly updated and should be comparable across the board. They should also be realistic, viable and reliable. The standards should address quality, quantity, timeliness and cost-effectiveness. This study is important because it has shed light on how the selected factors influence managers and board members of Savings and Credit Cooperative Societies in their efforts to measure employee performance and achieve organizational goals.

Keywords: Savings and Credit Cooperative Organizations (SACCO) Performance Appraisal, Appraisal Standards