SUCCESS FACTORS AND KEY FEATURES FOR IMPLEMENTING

PERFORMANCE MANAGEMENT SYSTEMS

By:

MAJA MALOSE THAKGATSO (201417855)

COLLEGE OF BUSINESS AND ECONOMICS

Course: BCOM Honours Human Resources Management

Lecturer: Dr M Bussin

Date: 28 March 2018

PROBLEM STATEMENT

Organisations fail to implement, maintain and management a working performance

management system in order to ensure effectiveness and efficiency in the running of the
business and creating a high performing culture.

INTRODUCTION

Managing performance in organisations plays an integral role in ensuring effectiveness and

efficiency. Performance management is not only done for organisations but to develop
employees both personally and professionally.

According to Grobler & Warnich (2006), performance management is of a broader nature

than performance appraisals. Performance management dates back to the 1980’s and was
formerly known as Total Quality Management.

Employees play a pivotal role in ensuring that their organisations become competitive in the
industry. If performance management is done correctly, productivity, motivation and morale
of employees will increase. Extensive digging needs to be done in order for employees to
understand what they perceive as fair in performance management (Sharma et al, 2009).

In his handbook, Armstrong (2009, p618), defines performance as a process that is

undertaken to improve organisational performance thus developing employees and teams to
get better results.

Performance management is very challenging in many organisations and how employees

perceive the process is a determinant of effectiveness in implementing this (Makhubela,
Botha & Swanepol, 2016).

This process is an alteration of employee attitudes and values and these have a holistic effect
on the implementation (Ochurub, Bussin & Goosen, 2012).
CRITICAL FACTORS FOR IMPLEMENTING A PERFORMANCE
MANAGAMENT SYSTEM.

Performance management creates an environment that is conducive for profitability and

efficiency. Performance management creates motivation, encouragement and reliability in the
organisation. Creating and implementing a performance management system can rather be
challenging and dismissed by employees because of the transition that is required in their set
of tasks and how these tasks will now be carried out (Ochurub et al, 2012). The ability for
employees to react positively when faced with change is a determinant of how well receptive
they will be towards a new system that is introduced. Employees may, at times feel uneasy
because of job security and their future in the organisation may be threatened. Certain critical
factors will determine how receptive employees and the organisation will be towards the
implementation of Performance Management Systems, namely:

(1) EMPLOYEE PERCEPTIONS AND INVOLVEMENT.

Employees are critical to the organisation thus how they view and value the new
system is very important. (Makhubela et al, 2016) arguably pointed out tha employees
are most likely to be receptive towards this process if they view it as an opportunity to
grow both professionally and personally in their fraternity. Performance Management
should not only be used as a means to an end for the organisation. Productivity,
efficiency and profitability are important in organisations and employees are core
contributors to these areas. Employees should be involved in the process from the
inception to the finish. “Managers must mobilise their organisations, communicate the
roles and responsibilities to those involved in the change process and ensure that the
processes are inclusive, participatory, transparent, simple, realistic, non-punitive and
objective” (Ochurub, et al, 2012, p ). Employees’ attitudes need to be reinforced thus
ensuring positivity and encouragement to participate in the development of
performance management systems. Furthermore, employees must be willing to
undertake this new development and ensure full participation to make the process less
complex.
(2) THE STRUCTURE OF THE ORGANISATION.
Organisational structure usually dictates how well people carry out their day to day
jobs. According to Maduenyi, Oke, Fadey & Ajagbe, (2015), organisational structures
consist of allocated jobs and procedures which should be followed in carrying out
jobs. Organisational structure is defined as the way authority is practiced in an
organisation’ hierarchical level and how the authority interacts with employees
(Maduenyi et al, 2015). The nature and environment in which employees perform
their tasks and given rules determines how well they will perform. Organisations have
stringent and authoritative structures thus obstruct employee’ versatility and the
ability to perform well and create value. The way in which organisations control
workflow and tasks at large is important in performance management.

(3) LEADERSHIP INVOLVEMENT.

How well trained leaders are in performance management play an integral role.
Ensuring good performance management in organisation, leaders should be actively
involved in this process (Williams & Galden, 2015). Proper planning and sound
leadership tools should take great priority in the process. Proper compensation,
extensive communication, training and performance management are very effective in
every organisation and leadership (Williams, et al, 2015, p78). It is very imperative
that communication takes top priority on a daily basis through correct channels and
correspondence. Leaders should be trained rigorously on verbal and oral
communication to ensure optimization of this implementation. Leaders are able to
mentor employees and increase their skillset thus increasing performance (Nwokocha
et al, 2012).

(4) DETERMING EMPLOYEE AND ORGANISATIONAL GOALS.

In the process of introducing a new performance system in the organisation,
employees must align their goals with those of the organisation (Makhubela et al,
2016). A series of benchmarking processes must be undertaken in order for the
employee to understand what the organisation wants to achieve and how the goals co-
 exist. A link exists between employee goals and those of the organisation (Wheeler,
2011). Performance management systems should ensure that both these goals are
achieved thus creating a buy in from all stakeholders in the organisation (Upadhaya et
al, 2014).

(5) COMMITMENT OF MANAGERS.

Performance management should have managers committed in the process. Well
trained managers are able to plan, perform, monitor and review this new system, (Lin
& lee, 2011). Managers need to support performance management in order to make it
more effective (Baloyi, Van Waveren & Chan, 2014). Management has direct
influence on employees thus influencing how well this new system will be supported
in the organisation.

IMPLEMENTING PERFORMANCE MANAGEMENT SYSTEM IN AN

ORGANISATION.

(1) MOTIVATE CHANGE

The status quo of performance management in organisations can be changed if views
about the processes are changed. Organisations need to create a shared understanding
of performance management and systems with employees.

(2) CREATE BUY IN FROM EMPLOYEES AND MANAGEMENT

Performance management systems start at the top of the organisations (Komati &
Zhou, 2013). This process should be cascaded to the whole organisation at large in
order to determine reception. Although performance management starts from
influential people in the organisation, it is still very imperative that subordinates
support this process (Hanson, et al; 2015). Top management need to effectively
communicate with employees in order to create a buy in into this new system and
ensuring nothing but outstanding results for all parties concerned.
(3) MAKE THE SYSTEM SIMPLER
According to Brecher, Eerenstein, Farley & Good (2016), organisations spend a
plethora of money and time on performance management however only a selected few
organisations see the effectiveness. Performance management is future orientated thus
employers need to ensure that it works rigorously with improving practices.
Technology has taken a larger part of the workplace, thus this could work to the
organisation’ advantage in that employees will be able to do the rating in their won
comforts and time.

(4) ENSURE THAT PERFORMANCE APPRAISAL IS DONE RIGOROUSLY,

TIMELY AND IMPROVEMENTS MADE THEOROF.

Performance appraisal is afforded an avalanche of definitions. According to Cappelli

& Conyon (2017), performance appraisal is a constant evaluation of an employee
performance on their jobs, not only by management but by fellow colleagues too
. Performance management is integrated in every organisation and ensuring that is
done timely and effectively should the organisation money. Performance appraisals
give an employee and the employer the ability to discuss on a one on one perspective
how to improve from both their ends (Seniwoliba, 2014). Organisations know how an
employee can create competitive advantage. Performance appraisals are fostered to
how well an employee performs in their designated tasks. Conclusion will be drawn
from reviews and findings and better alternatives for performance improvement will
be adopted.

(5) TRAIN EMPLOYEES AND MANAGERS TO POSSESS SKILLS AND

KNOWLEDGE NEEDED IN PERFORMANCE MANAGEMENT SYSTEMS.
Training is very important for both the employee and managers in the new adopted
performance management system, (Komati et al, 2013). Performance management
training must provide both the employee and manager with correct skills to ensure
effectiveness. Employees and managers need extensive interpersonal, communication
skills in order to carry out this system. Without proper training, the system will be
extremely difficult and providing feedback will be ineffective. When employees are
able to receive feedback from performance on how they performed and furnished with
 strategies on how they can better their performance is very important, (Mitushi,
2014). Employees also need to be trained on how to receive feedback and ensure
improvement in the area of lack.

(6) ENSURE MANAGERS AND EMPLOYEES ARE INCLUDED IN THE

WHOLE PROCESS.
Both managers and employees need tom participate in the new performance
management system proposed in the organisation. Their psychological presence is
required than their physical beings. Employees and managers need to bring their
cognitive and emotional beings in the organisation to ensure a well-designed
performance system (Trus et al, 2013). This will see employees availing themselves in
the process authentically and furnishing the process with their opinions and
recommendations. Disengaged employees remain stagnant within the organisation.
PAY FOR PERFORMANCE

YES, I would link performance with pay.

Organisations mostly focus on pay for performance on executives and not their low
tier employees (Joseph, Emett & Louw Potgieter, 2012). Compensations for
performance takes a variety of routes however in most cases, it is monetary based and
following a certain set of criteria and formulae. Salaries and wages are what most
organisations focus on when doing pay for performance (Williams & Galden, 2015).
Depending on the organisation, pay for performance could be an important revelation
and leading to optimum performance, satisfaction and engagement from employees. A
manufacturing company could have an employee get a certain amount of money for a
certain number of units produced. This could form as motivation for many employees
to produce as many units as possible in order to receive a certain amount of money.
Organisations should have very attractive compensations in order to attract highly
skilled and performing employees. Elements such as promotion, recognition and
training & development could take a larger portion of our Pay for Performance
system. Higher performing employees stand a higher chance of being promoted thus
prompting employees to work harder in order to grow in the organisation (Mehta,
Kurbetti & Dhankar, 2014).

Pay for Performance “is based on premises that incentives, usually in a form of cash
bonuses will prompt employees to work harder and smarter, thereby improving their
own performance and attract and retain high quality employees” (Thompson &
Bauman, 2011, P 2).

According to Gohari (2013) compensation and rewards have a significant effect on

how well employees perform in their designated areas of work. Most organisations
remain constant when it comes to performance because employees are not motivated
and satisfied with the outcomes of their work. In ensuring that employees become
productive, organisations should ensure that employees are rewarded accordingly and
still remain within the competitive spectrum. Organisations should be able to reward
performance from a more strategic perspective.

Remunerations structures should be able to distinctively tell between high and low
performing, engaged and disengaged employees in the organisation.
 Vroom (1964)’ expectancy theory of motivation has made assertions that pay for
performance should be able to prompt an employee to perform optimally.

CONCLUSION

It is very imperative that organisations take heed to their structures when determine
how well an employee performs in their jobs. Organisations can be inhibitors of
employee performance thus when doing appraisals, it is also important to look at what
deficiencies the organisation has and take corrective measures. It is in the jurisdiction
of both the employee and employer to ensure that performance management systems
work according and as per their own criteria. Performance management systems need
to be cascaded from top in order to use the influence to get employees to have buy in
into the new system and procedures. Change takes time to be adapted to and it is of
importance that organisations give the new system and employees time to adapt.

Pay for Performance can hinder productivity of employees if too much emphasis is
place on monetary value of a job and not on competitiveness.
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