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Journal of African Business
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Performance Management in Public
Sector Enterprises: A Case Analysis of
Employees’ Perceptions in the Electricity
Company of Ghana (ECG)
Frederick Mmieh a , Chima Mordi a , Satwinder Singh a & Felicity
Asiedu-Appiah b
a Brunel University Business School, Uxbridge, Middlesex, United
Kingdom
b Kwame Nkrumah University of Science and Technology, Kumasi,
Ghana
Version of record first published: 01 Dec 2011.
To cite this article: Frederick Mmieh , Chima Mordi , Satwinder Singh & Felicity Asiedu-Appiah (2011):
Performance Management in Public Sector Enterprises: A Case Analysis of Employees’ Perceptions in
the Electricity Company of Ghana (ECG), Journal of African Business, 12:3, 419-438
To link to this article: http://dx.doi.org/10.1080/15228916.2011.621847
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Performance Management in Public Sector
Enterprises: A Case Analysis of Employees’
Perceptions in the Electricity Company of
Ghana (ECG)
FREDERICK MMIEH, CHIMA MORDI, and SATWINDER SINGH
Brunel University Business School, Uxbridge, Middlesex, United Kingdom
FELICITY ASIEDU-APPIAH
Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
In this article, the authors critically assess the performance
management (PM) policies and practices in a public sector
company, namely the Electricity Corporation of Ghana. The study
has gone some way to ‘close the gap’ in the literature by making a
significant contribution toward our understanding of some of the
perceptions of and challenges employees face with performance
management in an African context. Quantitative analysis of
available evidence reveals that employees are generally content
with the implementation of the PM system in the Electricity Corpor-
ation of Ghana but are skeptical about some of the practices under
the guise of PM.
KEYWORDS electricity company of ghana (ECG), human
resource management (HRM), performance management, public
sector enterprise (PSE)
INTRODUCTION
Understanding performance management (PM) policies or practices in the
context of public utility companies in a developing country has been at
the core of human resource management research in recent times (Dodoo,
1997; Haile Selassie, 2009). Awortwi and Vondee (2007), among others, have
This article is a regular accepted submission that was added to the special issue.
Address correspondence to Frederick Mmieh, Brunel University Business School,
Uxbridge, Middlesex UB8 3PH, UK. E-mail: Frederick.Mmieh@Brunel.ac.uk
Journal of African Business, 12:419–438, 2011
Copyright #Taylor & Francis Group, LLC
ISSN: 1522-8916 print=1522-9076 online
DOI: 10.1080/15228916.2011.621847
419
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stressed that for PM practices or policies to be successful, there must be a
sequence of interconnected actions and reactions unfolding over time.
In the early 1980s, Ghana embarked on a reform agenda by adopting
the IMF and the World Bank-assisted Economic Recovery Programme
(ERP) in a desperate effort to reverse several years of socioeconomic decline
and promote growth through economic liberalization. As part of the reform
agenda, the Ghanaian government instituted a divestiture program to transfer
the loss-making state-owned enterprises (SOEs) into private hands. The
government at one point controlled more than 350 SOEs, but by December
2000, nearly 300 SOEs had been privatized (U.S. Department of Commerce,
Doing Business in Ghana, 2009). The purpose of the privatization program
was to expose the SOEs to competitive market forces and stimulate more
cost-effective and financially responsible management.
Public utility companies such as water, telecommunications, and elec-
tricity that are historically state owned and run as public sector enterprises
(PSE) came under close scrutiny and the Ghanaian government put plans
in place to privatize them (Katsouris, 1998). These PSEs including Electricity
Company of Ghana (ECG) were heavily criticized for their lack of economic
drive, technical efficiencies, and dynamism in providing uninterrupted ser-
vices to the people of Ghana at an affordable price (Appiah-Kubi, 2001).
In 1994, Ghana’s electricity sector was significantly reformed and has
since gone through partial privatization (Institute of Statistical, Social and
Economic Research [ISSER], July, 2005). The objectives of the reform of the
electricity sector included structural changes within the sector to bring about
competition in supply, transparency in the regulation of the sector operators,
effective commercialization of operations of electricity utilities, and encour-
agement of private investment in the development of the electricity sector
(ISSER, July 2005). While the partial privatization initiative in the electricity
sector is welcome, there is a long debate about the wisdom of the govern-
ment’s preparedness to hold on to these cost-ineffective public sector indus-
tries instead of committing itself fully to privatizing them. It is widely believed
among exponents of privatization that if these utility companies were
exposed to market forces, it would benefit consumers by giving them choice
and also lower prices as a result of efficiency gains within the privatized com-
panies (Appiah-Kubi, 2001; Katsouris, 1998; among others).
Unfortunately, supporters of both camps—public-sector ownership and
private-sector ownership—have failed to take into account in their argu-
ments that, whether public or private, employees within an organization con-
tribute enormously to its growth and thus motivating them to do well for the
company lies at the very heart of efficiency-enhancing measures, of which
PM is an integral part. PM determines how an employee has used his or
her skill=expertise to perform his or her task in the previous year, a review
of which enables managers in consultation with the employee to set goals
for the following year. This simple task, however, can become complicated
420 F. Mmieh et al.
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TABLE 1 Basic Statistics and Significant Zero-order Correlation Coefficients
Profile of respondents’ performance management attributes Mean SD
v
2
-Test
statistics
Respondent profiles: Col-1 attributes pair
significantly with the following:
I – Understanding of PM
1. PM only helps to improve performance. 3.47 1.04 26.85 2, 7, 8
2. PM is about deciding how much to pay people. 2.19 0.98 18.55 1, 8, 10, 22
3. PM is a two-way process, with both managers expressing their views. 3.92 0.99 39.22 –22
4. PM is a way of keeping a record of an individual’s progress. 3.67 0.98 52.17 5, 27
5. PM is a way of keeping a record of an individual’s mistakes. 2.46 1.06 20.75 4
6. PM gives managers the authority to punish the people they
do not like.
1.85 1.03 43.29 –7, 22, 24, 26, 30
7. The objectives=targets agreed with the managers are realistic. 3.30 0.94 41.33 1, 5, 6, 8, 9, 27, 13, 32, 14
8. Assessment of my performance is consistent, fair and unbiased. 3.55 0.96 30.79 1, 2, 7, 9, 19, 14, 18, 31, 28, 26
9. I fully understand how my objectives=targets relate to the
business needs of the organization.
3.85 0.91 50.92 7, 8, 20, 14, 18, 31, 28
10. The PM used here works well and does not need to change. 2.18 1.03 24.18 2, 20, 22, 18, 24
II – Work=Organization Perceptions
A. Work-related
11. My organization is a good employer. 3.32 1.05 31.68 27, 13, 32, 12, 29, 26, 33, 34, 36
12. My organization communicates its goals and objectives clearly. 3.37 1.07 34.81 27, 13, 32, 14, 18, 26
13. I fully understand my organization’s business goals and objectives. 3.86 0.80 63.97 7, 19, 27, 22, 11, 32, 14, 18, 17, 12,
28, 26
14. I know exactly what is expected of me by my organization. 3.71 0.95 51.08 7, 8, 9, 13, 18, 17, 31, 12, 28, 26
15. I have authority to determine my work objectives. 2.49 1.00 7.77 23, 16, 24, 29, 26
16. I have autonomy over the way I perform my work. 2.53 1.06 17.34 15
17. I find it difficult to discuss work problems with my manager. 2.29 1.11 39.89 –13, 14, 31, 28, 26, 38
18. My work objectives are unrealistic and difficult to achieve. 2.16 0.85 18.55 –8, 10, 19, 27, 22, 13, 14, 12, 26
B. Feedback-related
19. I receive lot of feedback on my performance. 2.19 0.98 18.55 8, 23, 34
20. I like to receive feedback on my performance. 3.92 0.99 39.22 9, 10, 22, 13, 31, 18, 28
C. Motivation-related
21. Hard work (performance) is not necessarily recognized or rewarded. 2.93 1.17 13.80 —
22. The most important thing about my job is the pay. 2.64 1.09 15.49 2, 3, 6, 10, 20, 13, 18, 31, 28, 29,
30
(Continued)
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TABLE 1 Continued
Profile of respondents’ performance management attributes Mean SD
v
2
-Test
statistics
Respondent profiles: Col-1 attributes pair
significantly with the following:
23. My organization values my contribution. 3.40 0.94 36.77 1, 5, 6, 8, 9, 27, 13, 32, 14
24. My organization is committed to my training and development. 2.86 1.20 7.69 –6, 10, 15, 27, 23, 35, 38
D. Team–related
25. I prefer to work in a team. 4.24 0.98 52.00 —
26. My work colleagues do not work as a team. 2.37 1.13 16.95 6, 8, 15, 13, 11, 32, 14, 18, 17, 31,
12, 28, 29, 36
27. The people in my work group are committed to the organization. 3.67 0.98 52.17 4, 7, 13, 11, 18, 24, 12
E. Tournament-related
28. My work colleagues and I have respect for each other. 4.02 0.86 67.36 8, 9, 20, 22, 13, 14, 17, 31, 26
29. I feel I am constantly being compared with my work colleagues
in terms of performance.
2.83 1.02 31.76 15, 22, 11, 32, 26
30. Weak performers are victims of nature and hence should be left
alone to do what they can.
1.75 0.86 31.64 6, 22, 35
F. ‘Influence-cost’ related
31. I have good relationship with my manager. 4.00 0.95 40.23 8, 9, 22, 14, 17, 28, 26, 38
32. The people who get the best pay rises are those who have
good relationship with the boss.
2.43 1.16 15.97 –7, 13, 11, 18, 12, 29, 26
III – Attitude to improving work
33. Improve working conditions. 4.54 0.90 106.34 –11, 34, 35, 37
34. Improve training and development. 4.49 0.92 94.47 –19, 33, 35, 36, 37
35. Improve career succession planning. 4.05 1.17 38.37 –24, 30, 33, 34, 36, 37, 38
36. Improve employee=manager relationship. 3.88 1.20 24.47 –11, 26, 34, 35, 37, 38
37. Increase financial rewards. 4.25 1.18 63.11 33, 34, 35, 36, 38
38. Improve PM activities. 4.21 1.18 56.66 17, 31, 24, 33, 34, 35, 36, 37
Source: Survey questionnaire.
Note. Question answers are provided based on a 5-point Likert scale; for questions 1–32: 1 ¼strongly disagree to 5 ¼strongly agree. For questions 33–38: 1 ¼least
important to 5 ¼most important.
For questions 33–38: 1¼unimportant, 2 ¼of little importance, 3 ¼moderately important, 4 ¼important, 5 ¼very important, (3) Correlation significance is 2-tailed at
either 1%or 5%.
Chi-square value at .01 and .05 level of significance with 4 degrees of freedom is, respectively, 13.277 and 9.488.
422
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in view of the very nature of PSEs in Ghana. Also, cultural norms and traits
can play important roles in ascertaining the attitude of employees toward
PM and its related issues.
Gleaned from evidence in the literature, the main objectives of this arti-
cle are (i) to ascertain employees’ understanding of PM policies in ECG and
(ii) to explore the perceptions of employees with regard to attributes such as
work related, feedback, motivation, teamwork, tournament related, and
influence cost related as explained and presented in Table 1. The study is
important in two ways. First, the authors believe that this study will be useful
to researchers, academicians, and existing business organizations and will
provide useful information to foreign investors planning to operate in Ghana.
Second, this study contributes to the social exchange and learning pers-
pectives in the PM system in the context of a developing country—Ghana.
To achieve these objectives, this article is structured as follows: We start with
the discussion on the socioeconomic and cultural factors that are influencing
the perception of PM in Ghana. This is followed by an analysis of the charac-
teristic nature of ECG and the review of the recent literature on PM. The next
section covers the data and methods used to collect the empirical evidence
followed by the hypotheses development. The penultimate section provides
the analysis and discussion of the evidence. The final section considers the
conclusions of the study, research limitation, and the areas for future
research.
SOCIOECONOMIC AND CULTURAL FACTORS THAT ARE
INFLUENCING THE PERCEPTION OF PM IN GHANA
An important factor that influences the perception of PM within the Ghanaian
work milieu is the normative work value of the Ghanaian worker. The work
value is shaped by a convoluted web of factors. In this study we focus on
three broad factors that shape the perceptions of PM within the Ghanaian
workplace: (i) the economic situation, (ii) the standard of education, and
(iii) the institutional cultural values. There is a rich body of evidence to affirm
that the Ghanaian economy has performed solidly over the last decade with
GDP rising from 4%in 1999 to 6.2%in 2006 and 6.3%in 2007 (Bank of
Ghana, 2008). Despite the positive economic outlook of the Ghanaian econ-
omy, some important challenges remain. Among these are underdeveloped
infrastructure, low productivity, low human capital development, and the
failure of the economy to generate productive formal-sector jobs and to keep
pace with the growth of the labor force, which is estimated to be 11.52
million (CIA Factbook, 2009; Debrah & Mmieh, 2009).
Another key factor influencing the perception of PM is the high impor-
tance and emphasis given to academic degrees in the Ghanaian society
(Donge, 2003). There has been a decline in the standard of education in
Employees’ Perceptions in the ECG 423
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Ghana. The decline can be attributed to a number of factors such as under-
funding of education, declining facilities, and the loss of Ghanaian academics
to ‘‘greener pastures’’ in other nations (Akyeampong, 2005). For instance, in
the mid 1970s, disbursement of universities on research and development
was about 0.7%of GDP and fell further to 0.1%and 0.2%of GDP during
the economic crisis of the 1980s (Akyeampong, 2005). The downturn of
investment in the university education also affects the quality of graduates.
A low quality of graduates inadvertently leads to unsatisfactory job perfor-
mance, which in turn may lead to a dislike of PM practices among the
underperforming employees.
In terms of the institutional cultural context, a key aspect of the Gha-
naian society is its collectivist nature and the emphasis on the extended
family system. Within this family system, individuals develop strongly knitted
social ties and feel a sense of obligation to their kith and kin (Jackson, 2004).
The Ghanaian worker extends the institutional cultural traits of high esteem
to authority, hierarchy, acceptance of status differentials, and respect for
elders and positions in the workplace. In this case, managers=elders in pos-
ition are expected to exercise constraint in reprimanding and=or weeding
out underperforming workers in the workplace. The overall implication of
the factors discussed here is that the worker’s understanding of PM in the
Ghanaian context is shaped by the prevailing economic conditions and the
institutional cultural values embedded in the Ghanaian society.
The Characteristic Nature of ECG
Since its inception in 1967, the ECG was required to conduct its affairs on a
sound commercial basis. Electricity, like any other forms of energy, is an
essential product in the economic development of any country. ECG is
one of two large state-owned enterprises responsible for the generation
and distribution of electricity in southern Ghana, namely Ashanti, Central,
Greater Accra, and the Volta Regions (CIA Factbook, 2009). The primary
functions of ECG are (i) to transmit, supply, and distribute electricity in
Ghana; (ii) to purchase electricity energy in bulk from VRA for distribution;
(iii) to construct, reconstruct, assemble, repair, maintain, operate, or remove
electricity-generating stations, subtransmission line, transformer substations,
electrical appliances, fittings, and installations; and (iv) to sell, hire, or other-
wise dispose of electricity appliances and fittings. ECG has its headquarters in
Accra and eight regional subsidiaries that consist of 59 district offices spread
over these regions (ECG Annual Report and Audited Accounts, 2007).
Presently, the company has a staff of 4979 and its customer population
increased from 1,413,659 in 2006 to 1,544,948 in 2007 (ECG Annual Report
and Audited Accounts, 2007). The challenges facing ECG are investment
needs of about US$1 billion to upgrade its distribution network alone. The
company has ambitious plans to extend its supply network, and it is seeking
424 F. Mmieh et al.
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the help of the Ghanaian government and international agencies to meet its
investment requirements. The company also faces huge challenges in terms
of modernization, fresh capacity installation, maintenance of new and exist-
ing connections, collecting correct tariffs on time, and stopping pilferage
(ECG Annual Report and Audited Accounts, 2007).
ECG is a parastatal organization, which means that its management and
therefore strategies are influenced to a large extent by government policies
and politics. The parastatal characteristic of ECG also means that it receives
financial resources from government and the people through taxation; there-
fore, emphasis on efficiency in the use of resources was almost nonexistent
until recently when it was changed from a corporation to a company, giving
the company opportunity to operate like any profit-oriented commercial
entity. Since the Ghanaian economy has become more open, the government
has put plans in place to wholly privatize the electricity sector (U.S. Depart-
ment of Commerce, Doing Business in Ghana, 2009). While privatization may
enhance competition and efficiency and may also bring a package of incen-
tives such as low price to the consumer, it must, however, be emphasized in
this study that privatization does not necessarily mean a higher performance
in a privatized company. In fact, there may be cases where it is a distinct
advantage to keep some utility companies such as electricity and water under
public ownership in the context of a developing country such as Ghana.
REVIEW OF THE RECENT LITERATURE ON PERFORMANCE
MANAGEMENT
In the last two decades, PM has gained recognition within the human
resource management literature (Haile Selassie, 2009). The theoretical
aspects of PM, which have been extensively applied in the corporate world,
are now increasingly being adopted to enhance organizational performance
and workforce discipline (Kennedy & Porter, 2008). Although the exact
definition is variously contested, several widely used definitions exist
(Houldsworth, 2004; Torrington, Hall, & Taylor, 2008). Armstrong and Baron
(1998, 2004, among others) view ‘‘performance management as a strategic
and integrated approach to delivering sustained success to the organisations
by improving the performance of the people who work in them and by
developing the capabilities of teams and individual contributors’’ (1998,
p. 7). They further argue that PM is a strategic activity—in that it is about
broader issues and longer-term goals; and integrated—i.e., it should include
various aspects of the individuals and teams; and that PM should incorporate
performance improvement throughout the organization, for individual, team,
and organizational effectiveness; it is development—in that unless there
is continuous development of individuals and teams, performance will
not improve; it is a managing behavior—to ensure that individuals are
Employees’ Perceptions in the ECG 425
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encouraged to behave in a way that allows and fosters better working rela-
tions. It is widely acknowledged within organizational studies that PM should
not be an annual review that comes up once within the calendar year but an
integrated process of aligning several elements of effective people manage-
ment (Arnolds & Boshoff, 2003; Kennedy & Porter, 2008). Several authors
have also presented a critical view of PM and suggested measures to improve
it (Conant, 1973; Bevan & Thompson, 1991).
There are various methods used in managing performance within an
organization. One such method is performance appraisal (PA). The method
of appraisals is conducted to draw information about workers’ ability and
skills, based on follow-up actions. These actions can include promotion,
horizontal movement, training, maintaining status quo, demotion, or even
outright dismissal (Adu, 2000; Lazear & Gibbs, 2009; Milgrom, 1988).
In most Sub-Saharan African countries including Ghana, the major chal-
lenge facing them in the effective implementation of PM policies or practices
is the institutional cultural influences that exist within the business environ-
ment. The institutional cultural influences include the thought system and
behavioral tendencies of employees and this has serious implications for
the kind of PM practices that would be adopted within that business
organization. In Ghana, indigenous institutions that have their origins in the
institutional cultural and historical processes of the society have helped pro-
mote established local community systems of authority and knowledge.
These informal institutions are in contrast to formal institutions and their struc-
ture and strategic orientations (Appiah-Opoku & Mulamoottil, 1997). In order
to understand the perception of the Ghanaian worker to PM and what
impedes or facilitates PM practices in ECG, there is the need to understand
the type of culture which underpins the basic assumptions of the Ghanaian
employees within the world of their work. There are two approaches to exam-
ining culture—namely, the psychological level, which focuses on the interna-
lized norms, attitudes, and behavior of individuals from a particular culture,
and the institutional level, which also focuses on culture embodied in institu-
tions such as government, education, economic institutions, and business
firms (Fang, 2003; McCrae, Terracciano, Realo, & Allik, 2008; Ng, Lee, & Sou-
tar, 2007). This study focuses on the latter—the institutional level of culture.
In comparing various countries, cross-cultural management researchers
such as Hofstede (1980) have examined various cultural value dimensions
that have an impact on the management of employees in individual coun-
tries. In this study, we focus on Hofstede’s (1980) dimensions since it is
one of the earlier studies that have had an enormous influence on other stu-
dies in the field (Rugman & Collinson, 2008). Hofstede (1980, pp. 45–46)
identifies four value dimensions.
1. Power distance: the extent to which a society accepts that power in institu-
tions and organizations is distributed unequally
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2. Uncertainty avoidance: the extent to which a society feels threatened by
uncertain and ambiguous situations by providing career stability, estab-
lishing formal rules, not tolerating deviant ideas and behaviors, and
believing in absolute truth and attainment of expertise
3. Individualism: the extent to which people are loosely knit and are
supposed to take care of themselves and become psychologically free,
while collectivism is characterized by a tight social network. This social
network may include relatives, clans, and organizations expected to look
after these workers, in exchange for total loyalty
4. Masculinity: the extent to which the dominant values in society are mas-
culine (i.e., assertiveness, the acquisition of money and material things)
In support of Hofstede (1980, pp. 45–46) cultural dimensions mentioned
above and their appropriateness for this study (Fang, 2003; McCrae et al.,
2008; Ng et al., 2007).
Despite the wide notability of these studies and the benefits of beha-
vioral predictability it presents, there is a paucity of studies on the perception
Ghanaian employees have about PM. Hofstede (1990) and Mendonca and
Kanungo (1990, 1996), in their various studies, identify the implications of
the cultural environment of PM in developing countries. They argue that high
uncertainty avoidance in developing countries such as Ghana implies reluc-
tance on the part of employees to take risks and accept organizational
change. According to Appiah-Opoku and Mulamoottil (1997), workers in
Ghana are collectivist by culture and for them concerns and in-group attain-
ments take precedence over the work concerns and individual work achieve-
ments. Appiah-Opoku and Mulamoottil (1997) further point out that in
Ghana social institutions such as the clan and family networks infuse the idea
of communality and collective decision-making processes. This study notes
that decisions on matters by the head of the home or clan or elders are
respected and their age and knowledge are recognized and appreciated.
According to Appiah-Opoku and Mulamoottil (1997), there is also value
for hierarchies and their authorities as seen within the chieftaincy system,
within the family, community, or villages, and a Ghanaian in the workplace
easily accepts their role description and authority. Appiah-Opoku and
Mulamoottil (1997) further argue that the Ghanaian worker tends to see
the employer=line manager as their father=elder and this is so because the
institutional cultural system of relationship is underpinned by paternalism,
which is transferred to the workplace. Even though the institutional cultural
system of relationship strongly exists in the Ghanaian society, we note here
that it is gradually changing. Hence, in Ghana it is obvious that the key activi-
ties of PM (i.e., goal setting, job performance, and job review) will require the
manager functioning as a coach and mentor to his or her subordinates.
Managers may also have to down play a unitarist managerial style and train
workers to accept a joint ownership of the PM system in the workplace
Employees’ Perceptions in the ECG 427
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(Dodoo, 1997). This is an important issue because workers are trained cultu-
rally to see managers as leaders whose decisions or targets should not
be questioned but instead be given unflinching support. The summary of
cultural traits, as delineated earlier, leads to the four broad hypotheses
developed in the next section.
DATA AND METHODS
The data on which this study was based were collected from both secondary
and primary sources. Secondary documents were gleaned from books, per-
iodicals, newspapers, and journal articles. Other secondary documents used
in this study were obtained from public sources including official documents
from Ghana Central Statistics Office, Institute of Social and Economic
Research, and annual reviews of ECG. These documents were used to
uncover patterns and developments in the energy sector. The primary data
used in the statistical analysis were collected from survey questionnaires of
employees working in ECG. They were distributed to 60 employees occu-
pying a number of professional jobs including engineers, technicians, IT
operators, project engineers, meter management staff, accounts staff, and
secretaries. The data were collected from both male and female employees,
from different age groups, and from those with different lengths of service
within the organization. We sought to obtain a heterogeneous sample in
order to get a broad view of the PM system operating in ECG. To this end,
we approached employees on a one-to-one basis, drawing on a selected
sample of respondents. The questionnaire was written in English and the
purpose of the survey was explained to them. With some staff members,
the principal investigator gave a helping hand in the completion of the ques-
tionnaire while other staff members completed the questionnaire themselves.
None of the employees displayed any overreluctance to discuss or share their
views. The survey was used to capture the employee’s rich array of subjective
experiences in employment relations in ECG (Greening, Barringer, & Macy,
1996). All the employees were assured of anonymity and of the confidential-
ity of their responses and were further assured that only themes or patterns
across the responses would be reported. Most of the questions were in a tick
box form and only a few were open-ended questions, which were prepared
and used in the survey.
Of 60 questionnaires distributed to staff members, only 38 employees
responded favorably to the survey questionnaire on PM attributes represent-
ing approximately 63%of the population sample used for this study. Respon-
dents were asked to rate the importance of these attributes on a 5-point Likert
scale (5 ¼strongly agree and 1 ¼strongly disagree) for questions 1 through
32. For questions 33 through 38, the 5-point Likert scale is 1 ¼unimportant,
2¼of little importance, 3 ¼moderately important, 4 ¼important, and
428 F. Mmieh et al.
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5¼very important. In order to have a better understanding of the effect of
these attributes, they were classified into two broad groups—(a) questions
relating to ‘‘understanding of PM’’ and (b) employees’ perceptions of PM
practices. Questions relating to employees’ perceptions of PM practices were
further subclassified under six headings, (i) work related, (ii) feedback-
related, (iii) motivation, (iv) team-related, (v) tournament-related, and (vi)
influence cost–related. The elements that constitute these subfactors are
explained and listed in Table 1, column 1.
For comparative performance evaluation, Milgrom and Roberts (1992)
strongly suggest that workers in an organization need to be incentivized
by promoting the best-performing workers to highly-paying jobs. Such a sys-
tem of comparing and rewarding employees in their view creates a
tournament-type environment in an organization. In order to ascertain the
importance of Milgrom and Roberts’ idea of incentives to the best-performing
workers on a 5-point Likert scale, this study expresses the idea of incentives
to the best-performing workers in hypothesis form (see Hypothesis 2e). Also,
concerning influence-cost related issues, given the institutional cultural char-
acteristics of the Ghanaian society, most superiors are to be respected by
their subordinates and not to be questioned for their actions. In this case,
managers are expected to adopt a mentor’s role toward their subordinates,
which would facilitate the understanding of the performance management
system put in practice by the employer. In order to test the validity of the
influence cost related issues on a 5-point Likert scale, these influence activi-
ties are also expressed in hypothesis form (see Hypothesis 2f). The data
were analyzed with the help of basic statistics. Descriptive statistics such as
the mean score, standard deviation (SD), a v
2
proportions test, and
zero-order correlations were used to reflect, interpret and analyze the find-
ings reported in this study. The next section deals with the development of
the hypotheses.
Development of Hypotheses
The following hypotheses were developed for this study along the following
two main dimensions: (i) understanding of PM practices in ECG and (ii) work
and organization perceptions. These hypotheses were developed based on a
survey from the literature and from the authors’ understanding of the insti-
tutional cultural issues and the operation of public sector enterprises in
Ghana.
1. Understanding of PM practices in ECG
Given the institutional cultural characteristics of the Ghanaian society,
most managers would adopt a mentor’s role toward their subordinates,
which would facilitate the understanding of the performance management
system put in practice by the employer. Therefore, this mentorship role
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and its expected outcome in relation to the understanding of PM policy
instruments are expressed in hypothesis form as follows:
Hypothesis 1: Employees would display a good understanding of PM
practices implemented by ECG.
2. Employees’ Perceptions of PM practices in ECG:
Following elements of the institutional cultural attributes and the fact that
ECG is engaged in the production and distribution of a homogeneous
product (electricity), these ideas are also expressed in hypothesis form
as follows:
Hypothesis 2: Employees would display a clear understanding of
different perceptions—such factors as (i) work-related,
(ii) feedback-related, (iii) motivation-related, (iv) team-
related, (v) tournament-related, and (vi) influence cost-
related. From hypothesis 2, the following subfactors
are expressed in hypotheses form as follows:
Hypothesis: Concerning work-related issues
Hypothesis 2a: Employees would have a clear understanding of work-
related issues in ECG.
Hypothesis: Concerning feedback
Hypothesis 2b: Appraisal managers would provide adequate feedback
to employees in ECG.
Hypothesis: Concerning motivation: Similarly, given the institutional
cultural traits and the mentorship role of managers, the
following hypothesis is formulated as:
Hypothesis 2c: Employees would be motivated at their place of work.
Hypothesis: Concerning teamwork: Given the strong institutional
cultural trait of community life in Ghanaian society,
the following idea is expressed in hypothesis form:
Hypothesis 2d: Group members would be natural team players.
Hypothesis: Concerning tournament-related issues:
‘‘Providing incentives by promoting the best performers
to highly-paying jobs is a particular kind of comparative
performance evaluation. The workers are effectively
ranked on the basis of their relative performance, and
the winners get promoted whereas the losers are passed
over’’ (Milgrom & Roberts, 1992, p. 367). Such a system
of comparing and rewarding employees creates a
tournament-type environment in an organization. This
idea is expressed in hypothesis form:
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Hypothesis 2e: The best performing employees are recognized and
highly rewarded.
Hypothesis: Concerning influence cost–related issues:
‘‘Influence activities arise in organizations when organi-
zational decisions affect the distribution of wealth or
other benefits among members or constituent groups
of the organization and, in pursuit of their selfish inter-
ests. The affected individuals or groups attempt to influ-
ence the decision to their benefit. The costs of these
influence activities are influence costs’’ (Milgrom &
Roberts, 1992, p. 192). These influence activities are
expressed in hypothesis form:
Hypothesis 2f: Given the institutional cultural traits, superiors are to be
respected and not to be questioned for their actions.
Therefore, elements of influence cost would exist in
the organization. The analysis and results of this study
are reported in the next section.
ANALYSIS AND DISCUSSION OF THE EVIDENCE
The hypotheses were tested using the full population sample of 38. Table 1
presents summary statistics and significance of the mean score, standard
deviation, and v
2
proportions test statistics for all the 38 attributes and the
significance level (either at 1%or 5%) zero-order correlations between the
attributes. The evidence presented in Table 1 reveals that PM policies and
practices correlate significantly with attribute 2 (PM is about deciding how
much to pay people), with a mean score of 3.47, attribute 7 (the objective=
targets agreed with the manager are realistic), with a mean score of 3.30,
and attribute 8 (assessment of my performance is consistent, fair, and
unbiased) with a mean score of 3.55. The v
2
proportions test statistics pre-
sented in Table 1 for all the 10 attributes from employee-level respondents
in relation to the understanding of PM provide some additional insights.
The results demonstrate that there is a significant difference in their expected
and observed frequencies. With the exception of attributes 2 (PM is about
deciding how much to pay), 5 (PM is a way of keeping a record of an indi-
vidual’s mistakes), and 6 (PM gives managers the authority to punish the
people they do not like), which have low average response rates of less than
3, the result signifies that employees are generally happy with the implemen-
tation of the PM system in ECG but are skeptical about some of the practices
under the disguise of PM. For instance, in the case where ‘‘PM gives man-
agers the authority to punish workers they do not like,’’ this finding in
relation to this attribute in our view can be seen as a negative practice in
an ethnic-sensitive environment such as Ghana.
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The remaining attributes 3 (PM is a two-way process with both man-
agers and employees expressing their views), 4 (PM is a way of keeping rec-
ord of an individual’s progress), 5 (PM is a way of keeping record of an
individual mistakes), 7 (the objectives or targets achieved with the managers
are realistic), 8 (assessment of my performance is consistent and unbiased),
and 9 (I fully understand how my objectives=targets relate to the business
needs of the organization), which have arithmetic mean scores of greater
than 3, support the view that respondents have in-depth understanding of
the nature of the PM system in place in ECG. Thus, hypothesis 1 receives
overwhelming support in view of the above findings. This positive under-
standing of PM policies and practices in ECG is also confirmed by the corre-
lation results reported in Table 1. For instance, attribute 8 (assessment of my
performance is consistent, fair, and unbiased) pairs positively with several
attributes such as 1 (PM helps to improve performance), 2 (PM is about
deciding how much to pay people), and 7 (the objective=targets agreed with
the manager are realistic) as presented in Table 1, column 5. However, the
low mean response rate of 2.18 relating to attribute 10 essentially signifies
that PM may be working well but some of the practices need to change.
The full sample is used to test hypotheses 2, 2a, 2b, 2c, 2d, 2e, and 2f.
Hypothesis 2 receives solid support from the findings of this research. For
instance, attributes 11 through to 14, as presented in Table 1, have an arith-
metic mean score of greater than 3, thus indicating that employees at ECG
have a clear understanding of the employees’ perceptions of PM practices
particularly relating to (hypothesis 2a: work-related issues). The proportion
test for the average response rate in relation to the issue of feedback (hypo-
thesis 2b) reveals that the divergence in the expected and the observed fre-
quencies are significant. The low arithmetic mean score of 2.19 for attribute
19 reveals that the feedback process within ECG is inadequate. However, a
high mean score of 3.92 for attribute 20 strongly suggests that respondents
would like to receive feedback on their performance after they have been
appraised by their manager. Apparently, the high average response rate of
3.85 for attribute 9, which pairs significantly with attribute 20, shows that this
group of employees does understand how important it is that their
objectives=targets consistently correspond with the business needs of the
organization.
Hypothesis 2c regarding motivation related factors receives mixed
responses from respondents. With the average response rate of slightly less
than 3, respondents do not agree that their hard work (or performance) is
either recognized or rewarded. Again, a low average response rate of 2.64
in relation to attribute 22 (the most important thing about my job is the
pay) shows that respondents are of the view that the implementation of
PM policies and practices in ECG does not necessarily impact their pay struc-
ture. The significant correlations reported in Table 1 reveal some interesting
facts about the motivation issue. For instance, while respondents accept the
432 F. Mmieh et al.
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fact that ‘‘the most important thing about their job is the pay,’’ they also
believe that ‘‘PM is about deciding how much to pay people’’ (attribute 2,
with average response rate of 2.19). Furthermore, respondents are of the
opinion that ‘‘their work objectives are unrealistic and difficult to achieve’’
(attribute 18, with average response rate of 2.16). Most importantly, respon-
dents believe that ‘‘PM gives managers the authority to punish the people
they do not like’’ (attribute 6 with a low mean score of 1.85). Respondents,
however, believe that their overall contribution to work is appreciated or
valued by the organization (attribute 23 with a mean score of 3.40) and they
also believe that the PM system used in ECG works well and does not need to
change. The responses of respondents in relation to the issue of motivation
appear to be mixed. On one hand, respondents appear to be praiseworthy of
the PM system used in ECG. On the other hand, respondents appear to be
criticizing the PM system in ECG since the system used in relation to pay falls
short of their expectations.
Hypothesis 2d, which posits that group members are natural team
players with respect to the strong institutional cultural trait of community life
in the Ghanaian society, also receives strong support from the findings of this
study. The clearest result that emerges from this study is that employees have
a strong preference to work in teams. Attribute 25 with a mean score of 4.24
confirms this result. Another interesting result in relation to team-related
issues is that presently, employees in ECG do not work as a team as demon-
strated by attribute 26 with a low mean score of 2.37. It is also worth noting
that attribute 26 (‘‘my work colleagues do not work as a team’’) has a positive
association with several other variables such as 12, 15, 17, 18, and 36. While
respondents appreciate ECG for giving them the opportunity to determine
their own work objectives (attribute 15) and its efforts to communicate its
goals and objectives clearly (attribute 12), respondents are of the view that
they have difficulty in discussing their work problems with their managers
(attribute 17). They also believe that their work objectives are unrealistic
and difficult to achieve (attribute 18) and they are also agitated about the fact
that PM gives managers the authority to punish the people they do not like
(attribute 6). According to these respondents, to make ECG a business-
friendly environment for employees to work in, there is an essential need
for ECG to ensure that there is an improvement in employee=manager
relationship (attribute 36). Evidence presented in Table 1 also shows that
attribute 26 correlates negatively with other attributes. For instance, respon-
dents do not believe that assessment of their performance is consistent, fair,
and unbiased (attribute 8) and they do not know exactly what is expected of
them by their organization (attribute 14). The authors of the study believe
that employers of ECG must give special attention to this by giving its work-
force the opportunity to be re-trained.
Hypothesis 2e, which posits that the best performing employees are
highly recognized and rewarded, receives favorable support from the findings
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of this study, thus confirming the findings of Milgrom and Roberts (1992, p.
367) who iterate that ‘‘providing incentives by promoting the best performers
to higher-paying jobs is a particular kind of comparative performance evalu-
ation.’’ With a large mean score of 4.02 in relation to attribute 28, work collea-
gues in ECG have mutual respect for each other. Attribute 28 also pairs
positively with several other subfactors such as (8, 9, 20, 13, 14, and 31), gen-
erally signifying that employees have a better view of their understanding of
the company’s ethos and work style. However, attribute 28 negatively pairs
with subfactors 17, 22, and 26, implying that respondents (i) do not have com-
munication problems with their managers, (ii) do not think that pay is the
most important thing for them, and (iii) think their colleagues do not work
as a team. Attribute 29 is the most important tournament-related issue in
which respondents are asked if they are constantly being compared with their
work colleagues in terms of performance. With a response rate of 2.83, the
result confirms that this is the case. The significant positive correlations in
relation to attribute 29 demonstrate that respondents have the authority to
determine their work objectives (attribute 15). Another interesting finding
of this study is that respondents believe that their work colleagues who get
the best increments in pay are those who have a good relationship with the
boss (attribute 32). The negative association of 29 also reveals that res-
pondents do not believe that ECG is a good employer (attribute 11) and that
the most important thing about their work is pay (attribute 22). With a low
average response rate of 1.7 relating to attribute 30, respondents do not take
kindly to the view that weak-performing colleagues are victims of nature and
hence they should be left alone to do what they can. Interestingly, response
relating to attribute 30 also correlates positively with attributes 6, 22, and 35,
signifying that PM gives managers the authority to punish people they do not
like. Similarly, employees believe that there should be an increase in their pay
and there should also be an improvement in career succession planning.
In hypothesis 2f, we suggest that given the institutional cultural traits,
superiors are to be respected and not to be questioned, demonstrating that
elements of influence cost would exist in the organization. This hypothesis
receives a strong and favorable support from the findings of this study. Evi-
dence in Table 1 reveals that there is a strong relationship between employ-
ees and their managers (attribute 31 with a high average response rate of 4).
However, with a mean score of 2.43 relating to attribute 32, respondents do
not believe that colleagues who get the best pay rise are those who have
good relationship with the boss. This paradox is perhaps explainable by
the fact that salary structures in public institutions in developing countries
are fixed and employees get a fixed increase in pay in each year of service.
Abnormal jumps in salaries do not happen very often and require excep-
tional effort and performance on the part of the employees. Evidence in
Table 1 also displays that attribute 31 correlates positively with attributes 8,
9, 14, and 28, signifying that respondents have a positive attitude to work
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and the objectives of the organization. However, there is a slight contradic-
tion with regard to responses relating to attribute 32. On one hand, responses
of employees relating to attribute 32 demonstrate that (i) their work objec-
tives are unrealistic and difficult to achieve (18), (ii) their work colleagues
do not work as a team (26), and (iii) they feel that they are constantly
being compared with their work colleagues in terms of performance (29),
signifying that respondents are unimpressed about their work-related issues.
On the other hand, respondents seem to be praiseworthy of the organization
by iterating that (a) ECG is a good employer (11), (b) the objectives=targets
agreed with the managers are realistic (7), (c) they have full understanding of
the organization’s business goals and objectives (13), and (d) they believe
that the organization communicates its goals and objectives clearly (12).
In summary, the results overwhelmingly support the null hypotheses
that employees have a good understanding of the PM system in place in
ECG. Apart from the findings on motivation-related issues, which are mixed,
the subfactors such as work-related, feedback-related, teamwork-related,
tournament-related, and influence cost–related are confirmed by the findings
of this study.
PRACTICAL IMPLICATIONS AND FUTURE RESEARCH
In keeping with the issue of culture, the study highlights a number of issues.
First, it confirms several theoretical constructs of culture-related issues. These
include the prevalence, regard, and importance of hierarchies and teams in
developing societies. This result in turn leads to several implications of prac-
tical importance. In the workplace, this means that employees will not raise
their concerns openly with their superiors in formal annual appraisals.
Instead, they expect to be amicably approached, listened to, and comforted
for any grievance they might have. In such cases, the role of senior managers
in the context of a developing country such as Ghana assumes added
responsibility. This study believes that in Ghana, where hierarchies in orga-
nizations still exist and are revered, managers must find innovative ways to
interact to keep the work force motivated. Senior managers, however,
can elicit valuable information by showing genuine concerns and patriarchal
attitude toward their subordinates. Such information can then be put to
constructive use by the management. In addition, this study notes that
employees in public-sector enterprises in most developing countries includ-
ing Ghana, enjoy a lifetime employment and receive protection by labor leg-
islations; however, the results of this study show that there are employees
who, though embedded in a cozy employment situation, are quite competi-
tive and believe in PM or other management tools that can enhance
efficiency. ECG should do well to trace and listen to these employees if they
have serious organizational changes in mind.
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The second important finding of this study is that employees show
preference for working in teams and have sympathy for fellow weak-
performing employees. In addition, employees do have difficulty in com-
municating with their superiors. This is not strange as the Ghanaian culture
is steeped in hierarchy, where managers are often unitarist and they do
not tolerate dissent and expect everyone to behave in an orderly manner
as ‘‘one big family.’’ These findings align with the literature in the sense that
Ghanaian workers in PSEs such as ECG are not culture neutral; rather, they
transfer their cultural patterns to work. The reverence younger workers have
for their adults or managers or anyone in authority is an extension of an insti-
tutional cultural trait where managers are seen as the ‘‘father figure’’ who
must be obeyed and given due respect, thus confirming the findings of
Appiah-Opoku and Mulamoottil (1997).
Third, perhaps a more heartening finding is that workers display a high
positive attitude to change. This can be harnessed to the organization’s advan-
tage. The starting point would be for managers at all levels to start to pay atten-
tion to issues raised by their juniors. Senior management can then identify the
pool of entrepreneurial talent who can be trained to make the company
efficient and grow prosperously in the foreseeable future. Although our study
provides insight into the evolution of PM system in a public sector enterprise, it
has a limitation. We relied heavily on data from one type of a public sector
enterprise (PSE) in the context of a developing country—Ghana. Thus, the
generalizability of these results to other public sector enterprises outside
Ghana remains to be established. This study has gone some way to ‘‘close
the gap’’ in terms of our understanding of some of the perceptions of and chal-
lenges employees face with performance management in an African context.
In this respect we have obtained, through our data, a ‘‘snapshot’’ of what some
of these challenges look like. While our one-country, one-public sector design
provided certain advantages, a multicountry study of the advantages and dis-
advantages of PM system within the SSA region would be particularly provoca-
tive. Therefore, the next step might be to conduct a more in-depth qualitative
analysis of employees’ experiences and the stories of their work to explore
how these identified factors are further experienced in their specific contexts.
In other words, despite the limitations in terms of a more in-depth understand-
ing, an issue that applies to much quantitative research, this study has allowed
some key issues to surface that will help frame further work.
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