INTRODUCTION

This chapter intends to provide background information on the nature of the present study, its purpose and significance. It is divided into four seven sections. The first section presents the overview of the study. The second part presents the problem statement of the study. The third part presents the setting of the study. The purpose of the study and its significance are revealed in sections four and five respectively. The sixth part presents the limitation of the study. The final section presents how this study is organized.

1.1 OVERVIEW

In our contemporary life, Establishments have seen some remarkable changes in the way they are organized and conducting their business. Traditional management techniques are no more effective in the competitive era, and companies are looking for new methods to manage effectively their employees. To stay in a competitive position, companies need to attain the highest productivity ratings possible. This requires higher performance from their employees, and for an increasing number of companies, the best way to achieve this is by assembling them into work teams, evaluate their performance, and enhance it by providing appropriate training course. Companies are aware that their employees require specific support structures, leadership, and performance management to function at their highest level and ensure both employee and their satisfaction.

In the same base, companies are realizing that performance appraisal is an important part of their organizational success. Organization top management typically assumes that providing employees with feedback about their performance makes it more likely that performance on the job will be improved. DeNisi and Kluger (2000), who has many contributions in the field of Human Resource Management, suggested that it is widely accepted that feedback is an essential component of an effective performance improvement strategy.

Furthermore, the Literatures of Human Resources management reveals that performance feedback increases job satisfaction and motivation (Hackman and Oldham, 1980). Organization top management that adapted a appraisal feedback approach should emphasizing that individuals learn on the basis of receiving feedback on their performance (DeNisi and Kluger, 2000). Thus, performance feedback plays paramount important role in numerous institutional activities such as career development, job satisfaction, motivation, and performance management.

Recently, and because of the great stress from external customers and stakeholders, organizations top managements all over the world seek vividly to reveals how well their employees perform on their jobs and tasks. Yet it has probably caused more controversy, applied research and practical advice than any other assertion in the history of management writing and thinking. The challenge is that both applied scientists and managers have simply been unable to provide complete feedback about job performance that satisfies an employee’s need to know how well he/she has done and where to improve (Kavanagh, 1997).

The traditional appraisal system works basically on top-to-down evaluation, employer always evaluate their subordinates. As it is single source feedback, employee performance evaluated from just one point of view and the information received one limited. Despite the predominance of feedback mechanisms in management interventions, however, single approach-feedback is not always as effective as is typically assumed.

Organizations become more aware of the limitation of single source feedback that hampers the evaluation process. The current efforts of organization management has shifted it concern from single feedback to evaluating their employees by receiving feedback from different sources in the organization as they seeking to collect the largest amount of data from all levels unlike the traditional approaches.

A relatively recent development in this context is a concept that has been termed “360 feedback” or “multi-rater performance appraisal”. The 360 feedbacks or multi-rater is one of the vehicles that is used to facilitate performance feedback and therefore deserves attention at an academic and practitioner level. The 360 feedback refer to the circular that feedback coming from different direction peers, subordinates, supervision, manager person him/her self and others for two purposes development and assessment tools. Coates (2008) uttered that multi-source appraisal became popular on the corporate since 1980s and at this time was mostly used it as an executive development tool.

The 360 appraisal system add one new criteria that was not included in the traditional appraisal system that is to focus on human behavior including employees competency and skills and thus emphasizing that it should be evaluated (Chawdron, 1990). The 360 feedbacks is consist several steps to implement in right way and to ensure success for this process. This approach should be start with set some issues to follow then to involve in this process (Chappelow, 1990).

The basic idea of 360 feedback is relaying upon two main theoretical principles. The first is that utilizing multiple sources yields higher quality, more valid, more reliable information than single source appraisal (Church and Bracken, 1997). The information collected is usually more reliable, as three or more different raters there is less chance of positive or negative bias. The information is usually more detailed, because when several different sets of feedback are combined they provide more information than just one. It is also more extensive, since there are several different people contributing their perspectives and each interacts with the rater in a different manner or capacity.

The using of 360 feedbacks as performance measurement approach provides more comprehensive information than most traditional methods (Waldman, 1997). In most cases the ratings are multi-directional – they can come from the employees co-workers, internal and external customers, and his/her subordinates (Waldman, 1997). When used effectively, 360 feedback can improve leadership and management abilities, increase communication and learning, assist employee and organizational development, improve customer service, promote teamwork and organizational change, and increase productivity and efficiency (Edwards and Ewen, 1996; Yukl and Lepsinger, 1995).

As the current study attempts to examine 360 feedbacks in the oil sector in the state of Kuwait, thus it’s important first to explain the current status of this sector. Next, the researcher presents brief introduction about Kuwait and the oil sector companies.

1.2 THE SITTING OF THE STUDY

Kuwait’s trade surplus continued to grow upwards since 2003. The Kuwaiti economy continues to rely on oil sector as its major driving force since that time. Oil represents more than 90 percent of Kuwait export earnings and 80 percent of budget revenue. In addition, oil industry is a public sector that dominates the economic sphere in terms of ownership and management of most activities.

On annual basis, both years 2007 and 2008 persist to witness ongoing growth in trade figures to support the prevailing economic growth and development projects in Kuwait. This was coupled as well with ongoing increased production levels of oil and upward prices at end of 2008. According to the latest figures from CBK, Kuwait witnessed trade surplus reaching a new high of KD15.1bn over last year’s surplus of KD11.7bn. As for the whole year, despite such decline, trade balance is estimated to report a surplus of KD2.1bn. Looking forward, Global research has expected the financial turmoil and declining oil prices to have much more impact on trade surplus to decline by more than 20% for 2009 (www.globalinv.net).

However, the recent reports and resea