Performance Assessment and Investment Decision of Small and Medium Scale Enterprises in Nigeria (a Case Study of Some Smes in Delta State).

Performance Assessment and Investment Decision of Small and Medium Scale Enterprises in Nigeria (a Case Study of Some Smes in Delta State).

CHAPTER ONE

Objectives of the study

The general objective of this study is to analyze the relationship between performance assessment and investment decision of SMES in Nigeria and the following the specific objectives:

To examine how a set of analytical tools will aid prospective investors in assessing the financial position of the corporate organization.
To evaluate the performance of a company for investment decision making.
To determine the profitability of the company.
To appraise the fundamental use of performance assessment information, this is to provide information for investment decision making.

CHAPTER TWO

LITERATURE REVIEW

Introduction

This chapter expounds on the content discussed in chapter one. It also discusses literature reviewed on Performance assessment and investment decision. The conceptual framework, theoretical framework and a review of past studies done in this area are included. The literature review was conducted from textbooks, journals, periodicals, seminar material, past research studies and internet search.

Conceptual framework

Content Summary

Concept of Performance assessment

Performance assessment is an analysis of an employee’s recent successes and failures, their personal strengths and weaknesses, their ability to continue their promotion or training, and a periodic evaluation of an employee’s performance against requirements established or presumed professionals (Mani, 2002; Terry & Franklin, 2003) DeNisi and Pritchard (2006) declare that performance evaluation is a discrete, formal and organization-sanctioned event, which generally does not occur more than once or twice a year, which clearly established the dimensions and / or performance criteria used in the evaluation process. Additionally, this is an assessment process, as quantitative scores are often assigned based on the employee’s judged level of work performance in the dimensions or criteria used, and the scores are shared with the employee being assessed. The key goals, targets and objectives of any organization have become an integral part of the performance management process which is however communicated through the performance assessment process. (Marchington and Wilkinson, 2005). Performance assessment is an important factor in identifying people’s talents, abilities, and its outcome can make them aware of progress, plans and goals.

CHAPTER THREE

RESEARCH METHODOLOGY

This chapter deals exclusively with the methods, procedures, and systems which the researcher employed in the collection of the necessary data and information for the research work.

Every stage of research process focuses on some kind of sampling. This is so because it becomes apparently impossible to include the entire variables, which might provide useful information or to use all the data gathered in the final report.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

Data presentation

In this chapter, we are concerned with analysis of the answers to the questions in the questionnaires administered to the respondents. The use of table will be used or adopted to clearly show the responses obtained in each question of the questionnaires and the research hypothesis from chapter one will be used to test hypothesis guiding the study through the use of percentages and chi-square (X²) techniques.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

Summary of findings

This study set out to study the performance assessment and investment decision of small and medium scale enterprises in Nigeria (A case study of some SMEs in Delta State).

From the test of hypotheses, we discovered the following;

Performance assessment is used to be relied upon in investment decision making.
Performance assessments are useful for forecasting company’s performance.
There is a positive and significant relationship between performance assessment and investment decision making.
Performance assessments provide various facts of a business such as, accurate records of its income and expenses and also its assets and liabilities.
The respondents agree that the performance assessment plays an important role in investment decision making.

Finally, the basic aim of this study is to determine the role of performance assessment in investment decision making. This is because prospective investor’s uses performance assessment of concerns as a major parameter for assessing the profitability and the risk of investing in such ventures and the aim of performance assessment is to provide financial information about an entity to interested parties.

The information can become meaningful through financial interpretations and decisions unveil the essence of performance assessment as the major custodian of financial information necessary for any investment decision. Investment are not made on a vacuum hence, there are bedrocks on which they will stand.

Conclusion

The researcher concludes by saying that performance assessment plays a vital role in investment decision making; for instance, where companies invest hundreds of billions of naira every year in fixed assets. By their nature, these investment decisions have the potential to affect the firm’s fortunes over several years. For a good decision can boost earning sharply and dramatically increase the value of the firm. This financial information can be subjected to various scrutiny and analysis depending on the investors before making their investment decisions. This is quickly appreciated in the banking sector as one of the major criteria’s the demand from their borrowers at the performance assessments of the concern for various years. This is subjected to their analysis and interpretations before they can go ahead in the loan negotiation concerning any company. Hence it is opined that companies should try as much as possible to posit performance assessments that reflects a true and fair view of what is propose to represent as a way of appreciating their companies the more.

Recommendations

Having gone through this study the researcher recommend the following as a way of incurring that performance assessment plays a vital rule in investment decisions

Every company should ensure that all material fact is reflected in their performance assessment.
These should be prompt provision of the performance assessment at the end of each financial year.
Investment decision should not be on a vacuum or rule of thumb rather, the performance assessments should be used as bedrock.
Every company should adhere to the demand of subjecting their performance assessments to statutory audit as a way of authenticating their contents
No investment decisions on a company should be taken without the consideration of a company’s performance assessments.

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