Effects of Self-assessment on Performance of Commercial Banks Listed in the Nairobi Securities Exchange in Kenya

Abstract

Business organizations are faced with the challenge of achieving economic sustainability and success while limiting the impact that their activities, products, or services may have on the environment and human health. One of the challenges facing organizations is the need for the adoption of performance-improving innovations. The objective of selfassessment is to identify and act on the areas of the improvement process that require additional effort, while recognizing and maintaining that which is already going well These performance insights result in organizations realizing that they need to achieve radical performance improvements merely to survive, let alone prosper and be recognized. Commercial banks listed in the Nairobi Securities Exchange (NSE) represent a significant and influential sector of business that plays a crucial role in the Kenyan economy. Competitiveness among them has been on the increase over the years with banks coming up with innovative products to woe customers over their competitors. This has given rise to many of them adopting the self-appraisal model as a way of improving performance both financial and anion-financial as reflected on their books of account and in their reputation. The study was done on 10 commercial banks using descriptive study in order to establish whether self-appraisal affects performance. A questionnaire was the major instrument used to gather primary data while past records from the NSE and CMA library were also used to supplement the major instrument and findings analyzed using regression analysis. The research noted that listed commercial banks have focused more attention on developing the link between the self-assessment criteria and the business policy development and business planning. Consequently, the leading commercial banks perform self-assessment from the bottom of the organization by initiating internal assessments according to the procedures described in relation to the award guidelines. This has contributed to a great proportion in improving their performance. The study recommends stakeholders to be willing to take proactive action, be innovative, and assume integrated improvement activities to achieve sustainable competitive advantage and superior performance. Further, it recommends to the management to adapt selfassessment as a method for driving continuous improvement activities in a planned way by giving meaning to quality and providing a framework for directing the quality activities. However, further research is recommended for other listed companies in the NSE to facilitate generalization of the findings and conclusively identify the relationship between self-assessment and performance in the NSE.