Management by Objective as A tool

for Organizational Performance In

Guaranty Trust Bank Plc

SHONUBI, Akeem Olalekan (PhD) and

SODIPO Olufunlayo Olayinka (PHD)
Department of Business Administration & Marketing,
College of Social & Management Sciences
McPherson University, Seriki-Sotayo,
P.M.B. 2094, Abeokuta, Ogun State, Nigeria.
Corresponding Author: [email protected]

pp 69-79 ABSTRACT

A lthough various management techniques have been in existence since

business but the last two centuries have experienced a major change in their
management. This can be seen in the improvement of the management
system through the use of Management by Objective. it is in view of this that the
study examined Management by Objective as a tool for Organizational
Performance. A descriptive survey research design was used. the population of the
study was both contract and permanent staffs of Guaranty Trust Bank Plc with a total
of eleven thousand, two hundred and twenty-six (11,226). The sample size of 388
was determined through the use of Taro Yamane's formula. The Cronbach's alpha
coefficient for the constructs ranged between 0.837 to 0.941. A total of 388
questionnaires were distributed with a response rate of 79.6%. The data gathered
were analysed using regression analysis. The findings revealed that there is a
significant impact of Management by objective on Organizational Performance.
The study recommended that managers should encourage employee participation in
the setting of organizational goal so as to encourage employees' commitment,
satisfaction and performance and regular performance appraisal and feedback
should be put in place which in turn leads to greater organizational performance.

Keywords: Management by Objective, Participative Decision Making,

Performance Appraisal, Performance Feedback, Organizational Performance.
70 Management by Objective as A tool for Organizational Performance In Guaranty Trust Bank Plc

1.0 Introduction
Management by Objective has shown to be an Banks in Nigeria have been applying various styles of
effective management system but only limited management over the years in their banks as
numbers of countries in Africa has applied this parameters of management, such as autocratic,
technique and others are yet to apply it. The western democratic, laissez faire and so on (Okon & Isong,
region in Africa is the region that largely utilizes this 2016). It is important to note that these management
technique (Nwite, 2016). In the western region of styles and technique require feedback from both
Africa, Nigeria is one of the countries that are within and outside the organization, Management by
currently applying MBO, in various business sectors Objective is not an exemption. Feedback is a filial
and in different states (Nwite, 2016). Principals of ingredient in Management by Objective as well as the
secondary schools in Nigeria use MBO in organisation's system. Some organisations do not
administration and to strategize, in the management have an effective communication channel in place
of school community relationship (Nwite, 2016). which can lead to a barrier in feedback (Drucker,
MBO is seen as being beneficial to the management 1964). Also some organisations do not carry out
of school, because it is used in achieving educational periodic and objective feedback and as such, they will
goals which is providing necessary education for the be ignorant of the employees' performance and leave
world today and the future (Wenceslaus, 2010), also room for biased and wrong information (Surekha,
in administration of Universal Basic Education in 2012). Such ignorance has led to the delay in the
Makurdi, Nigeria, it is seen that MBO has significant rectifying of employees' drawback which had caused
effects on the decision making and in the damage to the organisation's performance (Okon &
administration.(Nwite, 2016).Some management of Isong, 2016).
companies in Nigeria lack sufficient techniques and
expertise to make them manage effectively (Ugwu, It is on this premise that the researcher intends to look
2012). Management by Objective as a management at how Management by Objective can be employed as
technique which involves the participation of both a tool for organizational performance in Nigeria. In
superiors and subordinates participating in the order to investigate some of the above problems, one
setting of organizational goals for job task is used in of the leading financial institutions in the country,
various industries (Grigorios, 2012). Unfortunately Guaranty Trust Bank Plc, has been selected as a case
many of the organizations are yet to adopt this study.
technique in full commitment and support of their The main objective of this study is to find out the
staff. They basically only often pay lip services to the impact of Management by Objective on
MBO technique, thus excluding staff in organizational performance.
standard/goal setting that involves them (Ugwu,
2012). They believe that employees lack sufficient 1.1 Objectives of the Study
expertise and as such their contribution will be The specific objectives of this study are to:
insignificant to the organization. Also due to security 1. determine the impact of participative
purposes, employees are restricted from decision making on organizational
participating in the decision making process (Ugwu, performance
2012). This restriction placed on employees might 2. assess the effect of performance appraisal on
lead to low productivity and performance in the organizational performance
organization, as there will be lack of motivation in 3. investigate the effect of performance
completing job task and no sense of community in feedback on organizational performance.
the organization.
1.2 Research Questions
Management by Objective as a management tool The following research questions will be used as a
which does not only cut across the participation of guide to the research work/study:
both subordinate and superior, but also involves the 1. What is the impact of participative decision
monitoring and accessing of employees performance making on organizational performance?
towards the goals (Drucker, 1954). Some 2. What is the effect of performance appraisal
organisations lack sufficient expertise to carry out on organizational performance?
appraisal and when done, they tend to neglect the 3. What is the effect of performance feedback
goals set for employees (Ugwu, 2012). Such on organizational performance?
appraisal process might lead to employees slacking
off and even pursuing of other objectives which are 1.3 Research Hypotheses
not related to the organization and as such reducing In this study, the following hypotheses are put
the productivity and performance of the forward;
organization. Management by Objective also does Ho1: Participative decision making does not have
not clarify the process for attainment of the objective an impact on organizational performance.
set and as such, different corrupt and unethical means Ho2: Performance appraisal does not have an
are adopted by the employees in accomplishing the effect on organizational performance.
task given to them. Such unethical means might be Ho3: Performance Feedback does not have an
unhealthy to the performance of the organization effect on organizational performance.
(Singh, Singh and Khan, 2016).
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 71

2.0 Literature Review employee involvement schemes resulting in co-

2.1 Conceptual Review determination of working conditions, problem
2.1.1 The Concept of Management by Objective solving, and decision-making” (Locke & Schweiger,
Management by objectives (MBO) is a process of 1979)
agreeing upon objectives within an organisation so
that management and employees agree to the 2.1.3 Performance Appraisal
objectives and understand what they are (Drucker, Performance appraisal is the measure of the value of
1964). Managers must avoid the 'activity trap' of the task done by an individual. Performance appraisal
being busy with day to day activities; they must is an employee's accomplishment of assigned work as
remain focused on their purpose. Drucker specified in the critical elements and as measured
“management by objectives” (MBO) has been against standards of the employee's position
implemented to great effect in many organisations. (Boateng, 2011). Performance appraisal is giving
Recognizing that objectives for MBO must be value to the duties and responsibility assigned to
SMART (Specific, Measurable, Achievable, employees. Task appraisal is a method by which the
Realistic and Time-specific) is essential to success job performance of an employee is evaluated in terms
(Drucker, 1964). of the degree of effectiveness by corresponding
manager or supervisor (Adofo, 2011). It can also be
According to Drucker, managers should adopt the termed as an analysis of an employee's recent
goal of lower-level management, senior managers successes and failures, personal strengths and
when the organisation established the organisation weaknesses and suitability for further training
goal, they must be effectively broken down into (Boateng, 2011). Task appraisal improves and
various departments, as well as the individual sub- develops employee competence. Task appraisals
goals, the manager under sub-targets in the right improve employees' skills by identifying and
lower for assessment of performance management improving on their weaknesses. Banjoko (2005)
by objectives is the essence of the value-oriented, explains that task appraisal is viewed and conducted
management by objective makes the whole solely in terms of its evaluative aspect thereby
company, each department, each person can have in overlooking its use for facilitating growth and
advance a clear quantifiable targets, things they can development in employees through training,
check the evaluation, and afterwards they can coaching, counseling and feedback of appraisal
reward and punishment honored to achieve a information.
comprehensive, fair and interactive Management.
MBO is designed to improve the management 2.1.4 Performance Feedback
process and maximize the effectiveness of the Regardless of whether you are a senior executive or
members of individual teams (Drucker, 1964). just starting out, everyone wants to know how he is
doing at his job. Feedback is an essential
MBO is meant to help the employee assess and communication tool in business performance
prioritize efforts to make certain those efforts are management. One of the most effective techniques is
focused on the bottom line and organizational constructive feedback, but all feedback calls for
values. The process also helps the team understand giving and receiving information (Danna & Griffin,
what the organisation does not value and what it may 1999). The performance feedback process is ongoing
not need to do any more. (Drucker, 1964). between managers and employees. The exchange of
information involves both performance expected and
2.1.2 Participative Decision Making performance exhibited (Danna & Griffin, 1999).
“Participative decision making is known by many According to Indiana University Human Resources
names including participative management, shared Service, “Constructive feedback can praise good
leadership, employee empowerment, employee performance or correct poor performance and should
involvement, dispersed leadership, open-book always be tied to the performance standards.”
management, or industrial democracy” (Antoni, Feedback exhibits these characteristics;
2005). Employee participation deals with the need Management, Structure, Confidentiality, Timing and
for cooperation between employer and employees Successful feedback (Danna & Griffin, 1999).
(Bendix, 2001). PDM is the process which involves
employees and administration sharing information 2.1.4 Organizational Performance
processing, decision making and problem solving in Organisational performance comprises the actual
the organization (Wagner, 1994). According to results of an organisation as measured against its
Kombo, Obonyo and Oloko (2014), it is special intended outputs (or goals and objectives).
form of delegation in which the subordinate gain Organisational performance involves analyzing a
greater control, freedom of choice with respect to the company's performance against its objectives and
bridging the communication gap between the goals. In other words, organizational performance
management and the workers. The basic concept comprises real results or outputs compared with
involves any power-sharing arrangement in which intended outputs. According to Richard, Devinney,
workplace influence is shared among individuals Yip and Johnson (2009) organizational performance
who are otherwise hierarchical unequal. Such encompasses three specific areas of firm outcomes:
power-sharing arrangements may entail various Financial performance (profits return on assets, return
72 Management by Objective as A tool for Organizational Performance In Guaranty Trust Bank Plc

on investment, etc.); Product market performance study “Effect of Knowledge Sharing, Participative
(sales, market share, etc.); Shareholder return (total Decision Making and Transformational Leadership
shareholder return, economic value added, etc.). on Organisational performance” This study seeks to
The term organizational effectiveness is broader. study the impact of knowledge sharing, Participative
Specialists in many fields are concerned with Decision Making and Transformational Leadership
organizational performance including strategic on Organisationla performance. Data was collected
planners, operations, finance, legal, and through questionnaire from health, education,
organizational development. manufacturing, telecom and financial sector of
Gujiranwala and Lahore region of Pakistan using
In recent years, many organizations have attempted stratified random sampling technique. Sample size
to manage organizational performance using the was 300 and 245 complete questionnaires were
balanced scorecard methodology where received back. The result indicated that participative
performance is tracked and measured in multiple decision making helps in improving organizational
dimensions such as: Financial performance (e.g. performance through goal attainment.
shareholder return); Customer service; Social
responsibility (e.g. corporate citizenship, Ezennaya (2011) in her study “Employee
community outreach); Employee stewardship; participative decision making and its impact on
Organizational performance; Performance productivity: An appraisal of government printing
measurement systems; Performance Improvement press and two other private publishing firms in
and Organizational engineering. (Kanter & Enugu” This study examined employee participation
Brinkerhoff, 1981) in decision making and its impact on productivity
using three publishing outfits in Enugu namely;
2.2 THEORETICAL REVIEW Government Printing Press, ROCANA Nig ltd and
The study was anchored on Hollman's Model GOSTAK Nig Ltd. The population consisted of
(2013).This model consists of a number of the managers and employees in firms stated above which
following distinctive steps: Identification of is located at Enugu urban. The sample size for the
managers' key areas of job responsibility; study was 137. Questionnaire and Oral interview was
establishment of specific objectives in each key area used as an instrument for collecting data from
of responsibility; periodic review of progress managers and employees. The outcome of the study
toward objectives and end-of-period evaluation of was analyzed by the use of tables and percentages
managers' performance on objectives. This model while the three hypotheses formulated were tested by
identified that the managers' assessments of MBO the use of chi square. The result of the study is as
effectiveness were measured in terms of seven MBO follows: Participative decision making does not
effectiveness dimensions namely; planning and involve participation at all levels of management;
organizing work, objective method of evaluating there is a positive relationship between participative
work performance, motivation of the best management and productivity; the investment effort
performance, coordination of individual and work in the practice of participation has not been yielding
group objectives, improvement in manager- the desired output; there are diverse perceptions of
employee communication, improvement in participation among the workers and managers and
manager-employee cooperation and overall the pressing problem facing the practice of
satisfaction with MBO (Hollmann, 2013). participation is that employees and managers
misconstrue participation in decision making.
2.3 EMPIRICAL REVIEW
Oyebamiji, (2018) in her study “Influence of
2.3.1Empirical Framework of Participative Employees Participation in Decision Making on
Decision Making and Organisational Organisation Performance: A Study of Ladoke
Performance Akintola University of Technology Teaching
Udu and Aturu-Aghedo (2016) in their study Hospital, Ogbomoso, Oyo State, Nigeria” This study
“Effects of participative decision making on the examines the influence of employees' participation in
performance of Federal Airports Authority of decision making on organization performance with
Nigeria (FAAN), Lagos” The broad objective of this reference to Ladoke Akintola University of
study is to find out if the employee actively Technology (LAUTECH) Teaching Hospital,
participates in decision making and the effect on Ogbomoso, Oyo State, Nigeria. The total population
organizational performance. Primary data was for this study was 800. Purposive random sampling
utilized in this study. Questionnaire was used as the technique was used to select Ladoke Akintola
primary source of primary data. ANOVA was used University of Technology Teaching Hospital,
to test for the null hypotheses. SPSS was used at Ogbomoso Oyo State, Nigeria, while simple random
arriving at the findings. The findings of this study sampling method was used to select 205 respondents.
indicated that the use of participative decision Data were sourced through a structured questionnaire
making will increase an organisation's performance and frequency, percentage, means, standard deviation
to a higher level.

Rizwan, Yasin, Sadaf, Hina and Hina (2013) in their

 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 73

and linear regression analysis were employed to influence of performance appraisal on employees
analyze the data. The findings of this study indicated productivity in organisations: A case study of selected
that both direct and representative participation both WHO offices in East Africa” The objective of this
have a positive and significant impact on study is to establish the effects of performance
organizational performance. Also results indicated appraisal on employee productivity a case study of
that there is a low level of employee participation in World Health Organisation (WHO). Descriptive
LAUTECH teaching hospital, Ogbomoso due to design was adopted in this study. Regression analysis
unwillingness of management to share decision was done to establish the effects of performance
making with employees. appraisal on employee productivity. The result
indicated that organisations should appraise their
Nwoko and Emerole (2017) in their study “Effect of employees often through utilized targets,
Employees Participation in Decision Making on accomplishments, organization goals, time
Organisational Performance: A study of National management and efficiency for performance measure
Root Crops Research Institute Umudike (2012- purposes as it would lead to increase in employees'
2016) This study focused on the effect of employees' productivity.
participation in decision making on organizational
performance with reference to National Root Crops Kolawole, Komolafe, Adebayo, and Adegoroye
Research Institutes Umudike (NRCRI). The study (2013). In their study “Appraisal System: A Tool for
adopted survey research design; primary and Performance in Selected Organisations in Nigeria”
secondary data were used. The population of the This study focuses on the use of performance
study consists of all the employees of the institution. appraisal in most organisations in Nigeria. This study
Logistic Regression analysis and Pearson Product used National Petroleum Investment Management
Moment Correlation were used to run the analysis Services and National Engineering and Technical
through SPSS version 20. The result of the finding Company in Lagos as a case study. The sample size
revealed that there is a positive relationship between taken was 620 that is, 129 and 27 respectively using
employees' participation in decision making and stratified sampling technique. Questionnaire was
work commitment of the employees in the used in the collection of data. Both qualitative and
institution. Also employees' participation in the quantitative data were collected for this study. The
decision making has a low positive effect on the analysis used for analyzing the data was SPSS while
productivity of the institution with correlation content analysis was utilized in analyzing the
coefficient of r = 0.228. qualitative data. The finding of this study shows that
employees have good knowledge of performance
2.3.3 Empirical Review of Performance appraisal but their attitude towards it is not positive
Appraisal and Organizational Performance because of the way it is done.
Obi (2016) in his study “Performance Appraisal as a
Tool for Enhancing Productivity in an Organisation” 2.3.4 Empirical Review of Performance Feedback
This study focus on using performance appraisal as a and Organisational Performance
tool for enhancing productivity in an organization. Nar (2017) in his study “The Role of Feedback in
Descriptive research design was adopted in this Employee Performance Improvement” This study
study. Interviews and questionnaire were used in deals with the role of feedback in employee
collecting data. Data obtained were analyzed using performance. This study used five hypotheses to look
tables and percentages. The result indicated that into various aspect of feedback. Primary data was
performance appraisal helps an organization to majorly used in obtaining data. Correlation was the
position employees adequately for optimum unit of analysis used in this study. The result suggested
productivity. that there is a correlation between feedback and
performance.
Wachiuri (2017) in her study “Effect of performance
appraisal on organizational performance: A case Singh, Tiwari, and Singh (2010) in their study
study of KPMG Kenya” The purpose of this “Performance Feedback, Mental Workload and
research is to investigate the extent of performance Monitoring Efficiency” The objective of this study is
appraisals in measuring performance of an to examine the effect of success and failure
organization” A descriptive research was used and performance feedback on perceived mental workload
the research used questionnaire in collecting of data. and monitoring performance in flight situation task.
The population of the study was 50. 50 The revised version of the multi-attribute task battery
questionnaires were distributed to KPMG staff. (MATB) was administered on 20 non-pilot
Data was analyzed using both descriptive and participants. The performance was recorded as hit
inferential statistics by using SPSS and the results rates false alarms and root mean square errors. Mental
were presents in figures and tables. Regression workload was accessed using NASA-TLX
analysis was used in analyzing of the variables. The questionnaire. The result showed that performance
findings indicated that objective based appraisals feedback did not have a significant effect on mental
contribute to organisational performance. workload and malfunction detection.
Mwema and Gachunga (2014) in their study “The Dahling, O'Malley and. Chau (2015) in their study
74 Management by Objective as A tool for Organizational Performance In Guaranty Trust Bank Plc

“Effects of Feedback Motives on Inquiry and population of the study comprised of 11,226 staff of
Performance” The purpose of this study is to First Bank of Nigeria PLC. The sample size of this
examine how two motives for feedback-seeking study was 388 staff which was determined through the
behavior, the instrumental and image enhancement use of a formula derived by Taro Yamanne. The data
motives, impact the feedback-seeking process and was analysed using a statistical tool of Regression
supervisor ratings of task performance. For this Analysis with the aid of the Statistical Package for
study, correlational data were collected from Social Sciences (SPSS version 22.0) at 5% level of
supervisor-subordinate dyads and analysed with significance. Descriptive Statistics was also used to
path analysis. The result show that perceptions of a analyse the relevant data.
supportive supervisory feedback environment are
associated with both higher instrumental and image 4 Analysis & Results/ Discussions
enhancement motives. The instrumental motive HO1: impact of participative decision making on
fully mediates the relationship between the feedback organizational performance in Guaranty Trust Bank
environment and feedback-seeking behavior. Plc.
However, the positive effect of feedback-seeking
behavior on task performance ratings made by In order to test hypothesis one, standard simple
supervisors is only significant when the image regression analysis was used. Data on of participative
enhancement motive is low. decision making on organizational performance in
Guaranty Trust Bank Plc. were obtained by adding the
3 Methodology items under each of the variable. The results of the test
This study adopted descriptive survey research of hypothesis are presented in Table 5.
design through the use of questionnaire. The
Table 1: The Overall Significance
Mo del Summary
Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .394 .156 . 12 7 .101513
ANOVA
Sum of Mean
Model Squares Df Square F Sig.
1 Regression .068 2 6.776 6.776 .015
Residual .377 309 .010
Total .433 307
a. Dependent Variable: Participative Decision Making
b. Predictors: (Constant), Organizational Performance
Source: Field Survey 2019

Table 2 Regression Coefficients

Coefficientsa
Model Unstandardized Standardized T Sig. 95.0% Confidence
Coefficients Coefficients Interval for B

B Std. Beta Lower Upper

Error Bound Bound
1 (Constant) .461 .145 3.065 .004 10.104 12.107
Participative .482 .164 .393 2.672 .015 .167 .278
Decision
Making
a. Dependent Variable: Organizational Performance
Source: Field Survey 2019

The results presented in table 1 show the effect that organizational performance
participative decision making have on The hypothesis that participative decision making
organizational performance was significant (F = impact organizational performance was therefore
6.776, p < 0.05). From the table, 15% of the variation confirmed for organizational performance
in organizational performance was explained by indicators. As participative decision making
variation in participative decision making(R square increases, organizational performance increases in
=.156, p < 0.05). â was also statistically significant Guaranty Trust Bank Plc.
(â = 0.482, t= 2.672, p < 0.05). Overall, regression OP = .461 + .482PDM + ?
results presented in table 2 indicate that participative …………………………………… (Eqn. 1)
decision making has positive effect on
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 75

Where: Moment Correlation were used to run the analysis

OP = Organizational performance through SPSS version 20. The result of the finding
PDM = Participative decision making revealed that there is a positive relationship between
? = Error term employees' participation in decision making and work
commitment of the employees in the institution. Also
Discussion employees' participation in the decision making has a
The regression equation one indicates that the low positive effect on the productivity of the
parameter estimates complied with a priori institution with correlation coefficient of r = 0.228.
expectation which explains that participative
decision making will increase organizational Oyebamiji (2018) in her study “Influence of
performance of Guaranty Trust Bank Plc. The Employees Participation in Decision Making on
constant is 0.461 implies that if participative Organisation Performance: A Study of Ladoke
decision making is zero, organizational Akintola University of Technology Teaching
performance would be 0.482. The coefficient of Hospital, Ogbomoso, Oyo State, Nigeria” This study
participative decision making is 0.482 which examines the influence of employees' participation in
indicates that a 1-unit increase in participative decision making on organization performance with
decision making is associated with a 0.482 units reference to Ladoke Akintola University of
increase in organizational performance of Guaranty Technology (LAUTECH) Teaching Hospital,
Trust Bank Plc. This implies that an increase in Ogbomoso, Oyo State, Nigeria. The total population
participative decision making will subsequently for this study was 800. Purposive random sampling
increase performance of participative decision technique was used to select Ladoke Akintola
making. The result of hypothesis one demonstrates University of Technology Teaching Hospital,
that participative decision making of Guaranty Trust Ogbomoso Oyo State, Nigeria, while simple random
Bank Plc. has a significant effect on performance of sampling method was used to select 205 respondents.
Guaranty Trust Bank Plc. Data were sourced through a structured questionnaire
and frequency, percentage, means, standard deviation
Nwoko and Emerole (2017) in their study “Effect of and linear regression analysis were employed to
Employees Participation in Decision Making on analyze the data. The findings of this study indicated
Organisational Performance: A study of National that both direct and representative participation both
Root Crops Research Institute Umudike (2012- have a positive and significant impact on
2016) This study focused on the effect of employees' organizational performance. Also results indicated
participation in decision making on organizational that there is a low level of employee participation in
performance with reference to National Root Crops LAUTECH teaching hospital, Ogbomoso due to
Research Institutes Umudike (NRCRI). The study unwillingness of management to share decision
adopted survey research design; primary and making with employees.
secondary data were used. The population of the
study consists of all the employees of the institution. Ho2: there is no significant relationship between
Logistic Regression analysis and Pearson Product performance appraisals on organizational
performance.
Table 3: The Overall Significance
Mo delSummary
Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .332 .146 . 11 9 . 101217
ANOVA
Sum of
Model Squares Df Mean Square F Sig.
1 Regression .077 2 7.342 6.532 .015
Residual .353 309 .018
Total .514 307
a. Dependent Variable: Employees Performance
b. Predictors: (Constant), Performance Appraisal
Source: Field Survey 2019
Table 4 : Régression Coefficients
Coefficientsa
Model Unstandardized Standardized T Sig. 95.0% Confidence
Coefficients Coefficients Interval for B
B Std. Beta Lower Upper
Error Bound Bound
1 (Constant) .474 .134 3.181 .004 11.135 14.271
Performance .463 .172 .269 2.912 .015 .164 .251
Appraisal
a. Dependent Variable: Organizational performance
Source: Field Survey 2019
 76 Management by Objective as A tool for Organizational Performance In Guaranty Trust Bank Plc

The results presented in table 3 show the effect that demonstrates that performance appraisal of Guaranty
performance appraisal have on organizational Trust Bank Plc. has a significant effect on
performance was significant (F = 7.342, p < 0.05). organizational performance of Guaranty Trust Bank
From the table, 15% of the variation in Plc.
organizational performance was explained by
variation in performance appraisal(R square =.146, Wachiuri (2017) in her study “Effect of performance
p < 0.05). â was also statistically significant (â = appraisal on organizational performance: A case
0.463, t= 2.913, p < 0.05). Overall, regression results study of KPMG Kenya” The purpose of this research
presented in table 4 indicate that performance is to investigate the extent of performance appraisals
appraisal has positive effect on organizational in measuring performance of an organization” A
performance. descriptive research was used and the research used
The hypothesis that performance appraisal affect questionnaire in collecting of data. The population of
organizational performance was therefore the study was 50. 50 questionnaires were distributed
confirmed for organizational performance to KPMG staff. Data was analyzed using both
indicators. As performance appraisal increases, descriptive and inferential statistics by using SPSS
organizational performance increases in Guaranty and the results were presents in figures and tables.
Trust Bank Plc. Regression analysis was used in analyzing of the
O P = . 4 7 4 + . 4 6 3 PA + ? variables. The findings indicated that objective based
…………………………………………………. appraisals contribute to organisational performance.
(Eqn. 2) Mwema and Gachunga (2014) in their study “The
Where: influence of performance appraisal on employees
OP = Organizational performance productivity in organisations: A case study of selected
PA = Performance Appraisal WHO offices in East Africa” The objective of this
? = Error term study is to establish the effects of performance
Discussion appraisal on employee productivity a case study of
The regression equation one indicates that the World Health Organisation (WHO). Descriptive
parameter estimates complied with a priori design was adopted in this study. Regression analysis
expectation which explains that performance was done to establish the effects of performance
appraisal will increase organizational performance appraisal on employee productivity. The result
of Guaranty Trust Bank Plc. The constant is 0.474 indicated that organisations should appraise their
implies that if performance appraisal is zero, employees often through utilized targets,
organizational performance would be 0.463. The accomplishments, organization goals, time
coefficient of performance appraisal is 0.474 which management and efficiency for performance measure
indicates that a 1-unit increase in performance purposes as it would lead to increase in employees'
appraisal is associated with a 0.461 units increase in productivity.
organizational performance of Guaranty Trust Bank H03: There is no significant effect of performance
Plc. This implies that an increase in performance feedback on organizational performance in Guaranty
appraisal will subsequently increase organizational Trust Bank Plc.
performance. The result of hypothesis one Hypothesis three was tested using simple regression

Table 5: The Overall Significance

Mo del Summary
Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .534 .313 . 256 .094053
ANOVA
Sum of
Model Squares Df Mean Square F Sig.

1 Regression .097 3 .034 3.762 .023

Residual .231 26 .009
Total .327 29
a. Dependent Variable: performance feedback
b. Predictors: (Constant), Organizational performance
Source: Field Survey 2019
Table 6: Régression Coefficients
Coefficientsa
Model Unstandardized Standardized T Sig. 95.0% Confidence
Coefficients Coefficients Interval for B
B Std. Beta Lower Upper
Error Bound Bound
1 (Constant) 431 .175 2.604 .024 12.140 13.143
performance .463 .216 .443 2.251 .041 .117 .231
feedback
a. Dependent Variable: Organizational performance
Source: Field Survey 2019
 Nigerian Journal of Management Sciences Vol. 7 No.1, 2019 77

The results presented in table 5 show the effect that organizational goals. In Management by Objective
performance feedback have on organizational employee and superior work together in order to
performance was significant (R Square = 313, F = achieve the goal set. Management by Objective is
3.762, p < 0.05). From the table, 15% of the variation made up of various stages, starting from the goal
in organizational performance was explained by formulation to performance feedback. Management
variation in performance feedback (R square =.313, by Objective was discovered in this work as having a
p < 0.05). â was also statistically significant (â = significant effect on organizational performance, as
0.431, t= 0.463, p < 0.05). Overall, regression results well as it's process, that is, participative decision
presented in table 6 indicate that performance making, performance appraisal and performance
feedback has positive effect on organizational feedback, has a positive relationship with
performance. organizational performance. Management by
Objective has a positive impact on the growth and
The hypothesis that performance feedback affects productivity of the organization. That is, with the
organizational performance was therefore increase in any of these variables will lead to an
confirmed for organizational performance increase in organizational performance.
indicators. As performance feedback increases,
organizational performance increases in Guaranty The study recommended that Participative Decision
Trust Bank Plc. Making should be encouraged in the organization.
OP = .431 + .463PF + ? Employees should be given the opportunity to share
………………………………………………… their ideas with the organization. By allowing
…. (Eqn. 3) employees to be involved in the decision making, will
Where: lead to the accumulation of creative and innovative
OP = Organizational Performance ideas in the organization. Employees tend to work
PF = Performance Feedback harder when they know that their input in the
? = Error term organization is of importance; Managers should
refrain from exercising appraisals in areas that isn't in
Discussion line with the goal of the organization. Appraisals
The regression equation one indicates that the should be objective and result-oriented. Performance
parameter estimates complied with a priori appraisal should be carried out using the goals of the
expectation which explains that performance organization as criteria.
feedback will increase organizational performance
of Guaranty Trust Bank Plc. The constant is 0.431 Efficient performance appraisals reduces the rate of
implies that if feedback content is zero, absenteeism, provides room for promotion, other
organizational performance would be 0.463. The incentives, creates job satisfaction, motivates
coefficient of performance feedback is 0.431 which employees and improves the performance of the
indicates that a 1-unit increase in performance organization; To be able to control and monitor the
feedback is associated with a 0.463 units increase in progress in the organization, feedback should be
organizational performance of Guaranty Trust Bank taken at a regular basis. Feedback serves as a means of
Plc. This implies that an increase in performance keeping track of the activities in the organization. An
feedback will subsequently increase organizational unbiased feedback system should be put in place.
performance of performance feedback. The result of Information passed from one individual to another in
hypothesis one demonstrates that performance the organization is clarified through the use of
feedback of Guaranty Trust Bank Plc. has a feedback. Performance feedback helps in improving
significant effect on organizational performance of employees' skills and organizational performance;
Guaranty Trust Bank Plc. Management by Objective, as the name implies
managing based on the objective set. Goals should not
Nar (2017) in his study “The Role of Feedback in just be set, but strict attention should be paid to the
Employee Performance Improvement” This study accomplishment of this goal set. Every activity in the
deals with the role of feedback in employee organization should be based on the goals set. That is
performance. This study used five hypotheses to they should not deviate from the actual reason
look into various aspect of feedback. Primary data (objective) of operation.
was majorly used in obtaining data. Correlation was
the unit of analysis used in this study. The result 6.0 Suggestion for future research
suggested that there is a correlation between This research is not exhaustive. It has only added vital
feedback and performance. value to the existing researches, because Management
by Objective is a broad topic and there are still other
5.0 Conclusion & Recommendations aspects of Management by Objective that needs to be
It is imperative to consider that this research work on brought to light. Also as time passes, the rate at which
Management by Objective and Organisational MBO is being applied in organizations diminishes.
performance is not exhaustive but dynamic Therefore it is suggested that further study should be
conclusions can be drawn from it. Management by carried on the effect of Management by Objective on
Objective is a process whereby subordinate and organizational Performance using other industries as
superior come together in formulating of case study.
78 Management by Objective as A tool for Organizational Performance In Guaranty Trust Bank Plc

Organisations in Nigeria. International

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