Effects of Performance Appraisal Quality on Performance of Employee in the Financial Sector: A Case of Investment Management Firms in Kenya

The main purpose of this study was to evaluate the effect of performance appraisal quality on employee performance in investment management firms in Kenya. The research used descriptive research design and the population of study was 347 management employees of investment management firms. 182 respondents was selected representing a population of 347 possible respondents using stratified random sampling by taking 30% of the target population in each stratum. The questionnaire was administered through drop and pick to the employees in the selected departments. The quantitative data in this research was analyzed by descriptive statistics using statistical package for social sciences. Completeness of qualitative data collected was checked for and cleaned ready for content analysis and results presented in prose form. In addition; multiple regressions were used to measure the strength of the relationship between the dependent and independent variables. The study found that clarity of performance expectations affected the job performance to a great extent. Feedback mechanism and open door policy affected job perform to a great extent. Integrity and reliability/dependability affected job perform to a great extent. In addition; distributive fairness affected job performance to a moderate extent.The study found that ideas and innovations; absenteeism/tardiness and timeliness had improved for the last five years. The study that appraisal motivates staff by clarifying objectives and setting clear future objectives with provision for training and development needs to establish the performance objective. Communication provides employees with the chance of exercising a level of process control. Trust in supervisors is important for determining satisfaction with the appraisal system. Appraisals based on personal traits have little value for providing diagnostic feedback to employees or for designing training and development programs to ameliorate identified skill deficiencies.