Historically, performance appraisal is believed to have originated mainly in the public sector of employment - the armed forces and the Civil Service. Now, formal schemes of performance appraisal are widely used in the majority of work organizations in both public and private sectors. The banking sector in Nigeria is no exception. The banking sector in Nigeria, which is becoming more and more competitive, should find the employee appraisal system a veritable tool for retaining high performing employees with the potential of helping to attain the goals and objectives of banks. It is in line with this reason that the system of performance appraisal of Afribank Nigeria Plc is brought under focus in this study to highlight the
various problems associated with it and to recommend better ways of ensuring that the best results are attained as much as possible. One way of testing the efficacy of the current system of performance appraisal of the bank was to test the linear correlation between staff strength and lurnover of the bank on one hand and the staff related cost and the profit after tax on the other hand. Both correlation coefficients were validated with the use of t-tests. Certain problems, which characterize the current appraisal system, are the prevalence of recency effect and average ratings
given by appraisers. The appraisal system should be remodeled in such a way that it is a continuous evaluation exercise throughout the year and not just once or twice in a year, as is the case currently. Once an employee's standard of performance drops
below a certain minimum, he should be so informed by his/her manager. The collective average of such ratings should be the foundation for arriving at such a thorough personnel decision. This will ensure that managers' have sufficient and substantial evidence to support personnel related suggestions on their subordinates to the human resources department of the bank. This will also assist managers to break away from the anger of their subordinates rather than giving them average ratings as an escape route.
