HRM3706 – PERFORMANCE MANAGEMENT



HRM3706 – PERFORMANCE MANAGEMENT

MODULE SUMMARY INFORMATION

- Lecturer

Ms Maimela

012-429 3713

maimeem@unisa.ac.za

Unisa, Muckleneuk campus, AJH van der Walt Building, Room 3-70

Fax: 086 561 1488

- Assignment due dates

|ASSIGNMENT # |DUE DATE |UNIQUE NUMER |

|1 |22 August 2011 |288920 |

|2 |19 September 2011 |n/a |

|3 |Self-assessment |n/a |

- Steps when answering questions about a case study

1. Identify the problem

2. Identify the causes of the problem

3. Develop alternative solutions

4. Select the best alternative

5. Develop a strategy (action plan)

- Modules outcomes

1. Demonstrate the ability to explore a shift from performance appraisals to performance management

2. Demonstrate a comprehensive knowledge base of an insight into the dynamics and challenges related to designing and implementing an integrated performance management system in organisations

3. Demonstrate the ability to explore performance management in the organisational context

4. Design a performance management system that incorporates individuals and teams

5. Critically synthesise the strategic nature of performance management

TOPIC 1 (ONE)

- Learning Outcomes

After completing this topic, you should be able to

1. either justify or criticise a shift from performance appraisal to performance management in managing employee performance

2. recognise the difference between an individual and team performance management in the organisational context

3. interpret a link between performance management and the reward system

4. design an employee developmental plan in accordance with a specific job position

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Study Unit 1 (ONE) – Performance Management in Context

- Learning Outcomes

After completing this Study Unit, you should be able to

1. explain the concept of performance management

2. distinguish between performance management and performance appraisal

3. illustrate by means of a diagram the performance management process

4. outline the aim and role of performance management in the organisation

5. explain the contributions a performance management system can make in the organisation

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Learning outcome 1

Performance Management can be defined as:

“A continuous process of identifying, measuring and developing the performance of individuals and teams, and aligning performance with the strategic goals of the organisation”

This definition is thus composed of 2 main components:

❖ Continuous Process: Performance Management is an ongoing. It involves a never ending process of setting goals and objectives, observing performance and receiving ongoing coaching and feedback. Once the end of the process is reached it starts all over again.

❖ Alignment with Strategic goals: Performance management requires managers to ensure that employees’ activities and output are congruent with the organisation’s goals and consequently help the organisation gain competitive advantage. Performance therefore creates a direct link between employee performance and organisational goals and makes the employee’s contribution to the organisation explicit. Performance management systems that do not make explicit the employee’s contribution to the organisational goals are not true performance management systems.

Performance Management is characterized with the following qualities:

❖ Performance management is an ongoing process.

❖ Organisational goals should be linked with individuals’ goals.

❖ Performance should be monitored and reviewed, and feedback provided.

❖ Employee development is crucial to ensure improvement in employee performance.

The Performance Management Process includes the following steps (Aguinis 2009 adaptation): (refer to LO 3 – page 5 for full diagram)

❖ Prerequisites

❖ Performance Planning

❖ Performance Execution

❖ Performance Assessment

❖ Performance Review

❖ Performance Renewal and Re-contracting

Learning outcome 2

Performance management is a forward-looking process, taking frequent measures as work occurs and responding to small steps forward, while performance appraisal is a backward-looking process of performance, measuring what happened in the past.

According to Aguinis (2009:2), performance appraisal refers to a system that involves employee evaluation once a year without any effort to provide feedback and coaching so that performance can be improved. It is a systematic description of an employee’s strengths and weaknesses. Performance management is more than just evaluating employee performance. Performance management is an ongoing process rather than a one-off event taking place, for instance, annually or biannually. It is a comprehensive, continuous and flexible approach to the management of organisations, teams and individuals which involve the maximum amount of dialogue between those concerned.

Comparisons between Performance Management and Performance Appraisal system:

PTO…

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Learning Outcome 3

Learning Outcome 4

Performance Management is most frequently used for Salary Administration, Performance Feedback and Identification of Employees Strengths and Weaknesses. However, Performance Management can serve the following 6 purposes (Anguinis 2009:14):

❖ Strategic Purpose: The first purpose of the performance management system is to help top management achieve strategic business objectives. By linking the organisational goals with individual goals, the performance management system reinforces behaviour consistent with the attainment of organisational goals. Moreover, even if for some reason individual goals are not achieved, linking individual goals with organisational goals serves as a way to communicate what the most crucial business strategic initiatives are.

❖ Administrative Purpose: A second function of the performance management system is to furnish valid and useful information for making administrative decisions about employees. These administrative decisions include salary adjustments, promotions, employee retention or termination of service, recognition of superior individual performance, identification of poor performers, layoffs and merit increases. Therefore, the implementation of reward systems based on information provided by the performance management system falls within the administrative purpose.

❖ Informational Purpose: Performance management serves as an important communication device. First, it informs employees about how they are doing and provides them with information on specific areas where they may need improvement. Secondly, related to the strategic purpose, it provides information on the organisation’s and supervisor’s expectations and what aspects of work the supervisor believes are most important.

❖ Developmental Purpose: Managers can use information gathered during the performance management system, feedback specifically, to coach employees and improve performance on an ongoing basis. This feedback allows for the identification of strengths and weaknesses as well as the causes for performance deficiencies (which could be due to individual, group, or contextual factors)

❖ Organisational Maintenance Purpose: The performance management system also provides information to be used in workforce planning. Workforce planning comprises a set of systems that allow organisations to anticipate and respond to needs emerging within and outside the organisation, to determine priorities and to allocate human resources where they can do the most good. An important component of any workforce planning effort is the talent inventory, which is information on current resources (eg skills, abilities, promotional potential and assignment history of current employees). Performance management systems are the primary means through which accurate talent inventories can be assembled. Other organisational maintenance purposes served by performance management systems include assessing future training needs, evaluating performance achievements at organisational level and evaluating the effectiveness of HR interventions (eg whether employees perform at higher levels after participating in a training programme). These 16 activities cannot be conducted effectively in the absence of a good performance management system. By managing performance the organisation can track down the talent it has and the ones it still has to search for. In the meantime the organisation should endeavour to maintain or keep what it has in its talent inventory.

❖ Documentational purpose: Finally, performance management systems allow organisations to collect useful information that can be used for several documentation purposes. Firstly, performance data can be used to validate newly proposed selection instruments. For example, a newly developed test of computer literacy can be administered to all administrative personnel. Scores on the test can be paired with scores collected through the performance management system. If scores on the test and on the performance measure are correlated, the test can be used with future applicants for the administrative positions. Secondly, the performance management system allows for the documentation of important administrative decisions. This information can be especially useful in court cases. This document will also assist organisations in applying consistency to its decision making.

Learning Outcome 5

The advantages associated with the implementation of a Performance Management system are as follows:

❖ Motivation to perform is increased: Receiving feedback about your performance increases motivation for future performance. Knowledge about how you are doing and recognition about your past successes provides the fuel for future accomplishments.

❖ Self-esteem is raised: Receiving feedback about your performance fulfils a basic need to be recognised and valued at work. This is likely to raise your self-esteem.

❖ Managers gain insight into subordinates: Gaining new insights into a person’s performance and personality will help the manager build a better relationship with that person. Also, supervisors gain a better understanding of each individual’s contribution to the organisation. This can be useful for the direct supervisors, as well as for supervisors once removed.

❖ The job of the person being appraised may be clarified and defined more clearly: In other words, employees gain a better understanding of the behaviour and results required in their specific positions.

❖ Self-insight and development are enhanced: The participants in the system are likely to develop a better understanding of themselves and of the kind of development activities that are of value to them as they progress through the organisation.

❖ Administrative actions are more fair and appropriate: Performance management systems provide valid information about performance that can be used for administrative actions such as merit increases, promotions, transfers and terminations. In general, a performance management system helps ensure that rewards are distributed on a fair and credible basis.

❖ Organisational goals are made clear: The goals of the unit and the organisation are made clear, and the employees understand the link between what they do and the organisational success.

❖ Employees become more competent: An obvious contribution is that employee performance is improved. In addition, there is a solid foundation for helping employees become more successful by establishing developmental plans.

❖ There is better protection from court cases: 4Data collected through the performance management system can help document compliance with regulations (eg equal treatment of all employees regardless of gender, race, ethnic group).

❖ Better and timelier differentiation between good and poor Performers: The performance management system allows for a quicker identification of good and poor performers. It also forces managers to face up to performance problems in good time (i.e. before the problem becomes so entrenched that it cannot be remedied easily).

❖ Manager’s view of performance is communicated more clearly: The performance management system allows managers to communicate to their subordinates their judgments regarding performance.

❖ Organisational change is facilitated: In cases where an organisation wants to change the organisational culture, this initiative can be added to the employees’ list of responsibilities and be subjected to review, together with other performance areas.

❖ Motivation, commitment and intention to stay in the organisation are enhanced: When employees are satisfied with their organisation’s performance management system, they are more likely to be motivated to perform well, to be committed to their organisation and not try to leave the organisation.

Conditions for the successful implementation PM

1. Convey reasons for such a system to all participants

2. ensure tope management’s commitment to the system

3. all participants should take part in the development and implementation

4. organisational culture should have a focus on delivery outputs

5. all managers should be properly trained in applying the PM system

6. PM should not be implemented in isolation, other HR systems should allow for the PM system

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Study Unit 2 (TWO) – Performance Management Process

- Learning Outcomes

After completing this Study Unit, you should be able to

1. apply the stages of the performance management process step by step in the organisational context

2. comment on the interrelatedness of the stages in the performance management process

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Learning outcome 1

Prerequisites Stage

This stage includes 2 important prerequisites for the implementation of the PM system:

❖ Knowledge of he organisations mission and strategic goals

Just knowing the organisational plan is not enough, the presence of a strategic plan does not guarantee that the information will be used effectively as part of the PM system. To ensure that these strategic goals cascade down the org and lead to concrete actions, a conscious effort must be made to link them with individual performance (as depicted above). PM is the 3rd most important factor affecting the success of a strategic plan.

❖ Knowledge of the job in question

This is done due to the process of job analysis (process of determining the key component of a particular job, including activities and processes). This is a pre-requisite for any PM process as it is difficult to understands what constitutes the required duties for a particular job, without it, neither do we know what needs to be evaluated or how to do so. The 2 products of a job analysis are the job description (Knowledge, skills and abilities, KSA’s and working conditions of a particular job) and the job specification. A job analysis is commonly done by way of observation, interview an questionnaire.

Performance Planning

This is the stage where the manager provides the employees with a thorough knowledge of the PM system. The manager and the employee meet to discuss and agree upon what needs to be done and how it should be done. The planning stage gives direction to both managers and non-managers alike. If employees know where the org or work unit is going and what they must contribute, they can coordinate their activities, cooperate with each other, and do what it takes to accomplish those goals.

Planning includes a consideration of results and behaviour as well as developmental plans. These factors need to be clarified during the discussions between manager and employee.

❖ Results

Results refer to what is needed to be done or the outcomes an employee must produce. This needs to include 3 things:

1. The key accountabilities, or broad areas of a job for which an employee is responsible for producing results. This information is obtained from a job description.

2. A discussion of results also includes specific objectives that an employee will achieve as part of each area of accountability.

3. Discussing results also means discussing performance standards

❖ Behaviour

An exclusive emphasis on results can give a skewed picture of employee’s performance. Behaviour or how a job is done constitutes an important component of the planning stage. This is because for some jobs it may be difficult to establish precise objectives and standards; employees may have control over how they do their jobs but not over the results of their behaviour. A consideration of behaviour includes discussing competencies, which are measureable clusters of KSAs that are critical in determining how results will be achieved, e.g: customer service, written or oral communication and creative thinking.

❖ Developmental Plan

The manager and the employee need to agree on a developmental plan. At a minimum, this plan should include identifying areas that need improvement and setting goals to be achieved in each area; highlights an employee’s strengths and provides and action plan to improve areas of weakness. The developmental plan requires the following 3 components:

1. Description of developmental objectives

2. Activities that will be carried out to achieve these objectives

3. Date of completion

Performance Execution

Once employees are aware of the behaviour to display and the results to be achieved, and that a development plan has been submitted, they must get down to fulfilling these commitments. Employees have the primary responsibility for and ownership of this stage. The following factors must be present in the performance execution stage -

Employee:

1. Commitment to goal achievement – enhanced by employee being an active participant in process of setting goals

2. Ongoing performance feedback and coaching – continuous, do not wait till review or until a serious problem develops

3. Communication with manager – regular comms, freedom to request clarity on issues and roles

4. Collecting and sharing performance information – regular updates on progress towards goals to manager.

Manager:

1. Observation and documentation – daily basis, keep track of good and bad performance

2. Updates – revise and update objectives based on changes to org goals.

3. Feedback – on regular basis

4. Resources – ensure employees are equipped with resources and opportunities to participate in developmental plans.

5. Reinforcement – on outstanding performance and remedies on negative performance

Performance Assessment

Both employee and manager are responsible for evaluating the extent to which the desired behaviour has been displayed and whether the desired results have been achieved. This includes an evaluation of the extent to which the goals stated in the development plan have been achieved.

Performance Review

This involves a meeting between the employee and the manager to review their assessments. It is called appraisal meeting or discussion and is importance because it provides a formal setting in which the employee receives feedback on his/her performance. Anguinis recommends the following steps for conducting a productive performance review:

1. Identify what the employee has done will and poorly by citing specific positive/negative behaviour

2. Solicit feedback from your employee about these types of behaviour – listen for reactions and explanations

3. Discuss the implications of changing, or not changing. Positive feedback is best, but and employee must be made aware of what will happen if an poor performance continues

4. Explain how sills used in past achievements can help overcome any current performance

5. Agree on an action plan

6. Set up meeting to follow up and agree on the behaviour, actions and attitudes to be evaluated

Performance Renewal and re-contracting

This stage is identical to the performance planning stage except that it uses the insight and information gained from the all other phases

Learning outcome 2

Each stage within the PM cycle has a purpose and if any of these stages/phases are missing the cycle becomes incomplete than rendering the PM system/process ineffective or inefficient. The phases within the PM process add value to the entire process and to the other phases as follows:

1. Prerequisites – this stage provides the minimum criteria for a PM process being knowledge of the organisations mission and strategic goals as well as knowledge of the job in question. Without this stage it is impossible to understand what to use as a ‘goal post’ when planning (phase/stage 2). There is therefore a critical need for complete and accurate understanding of organisational goals and the requirements of the job being evaluated/assessed, the lack of which could yield either incorrect or incomplete information in the following stages thus rendering the process ineffective in it purpose.

2. Performance Planning – once you know what the organisational and the jobs needs are, you are then in a position to plan effectively to ensure that these needs are met (In terms of results, behaviour and a developmental plan). This stage is critical to ensure that both the manager and the employee understand the path to be taken to reach the goal and achieve the required outcomes and what these outcomes are. Understanding where you want to be is great but it is impossible to get there if you don’t know how to. The stage identifies just that, what needs to happen to get to the end goal and properly identifies what the end goal is. There is nothing to execute without planning.

3. Performance Execution – This involves the actual ‘doing’ of the plan and the achievement of the expected results and behaviour. Without this stage all other stages are futile as planning, assessing and reviewing are pointless if there is nothing being implemented.

4. Performance assessment – This is the stage where both the manager and employee recollect and on their own assess progress and positive/negative results/behaviour. No one can possibly sit down at a review meeting without having gone over the facts first and understood what needs to be discussed in advance. This is in effect the preparation for the review meeting to be held at the next stage. What do you discuss if the information has not been assessed first?

5. Performance review – This is the actual meeting. It is superb to go through all of stages 1-4, but if the outcomes from these stages, being the assessment of the execution, are not formally discussed with the employee it is not longer a valuable tool to the organisation. If the employee and the manager do not discuss these matter and arrive at workable solutions for problems, and if the manager does not give credit for positive behaviour in a formal appraisal setting, the employee may consider the entire process to be unfair and useless.

6. Performance renewal & Recontracting – This stage may be exactly like stage 1 but it differs in one important aspect, it is performed with all the knowledge gained from stages 1-5. This is invaluable information and acts as a benchmark for the employee/job in question for years to come. It identifies growth of an employee and allows an organisation to award employees for their positive results and behaviour. This stage is where you allow the employees to see exactly what the outcome or benefit of the PM system is to them as individuals. The absence of this stage means that once a performance review is conducted, the process ends. Employees do not gain value from their positive contributions in the form of renewals of contracts or amendments to salary based on there performance as identified through the rest of the stages.

As seen above it is clear that each and every stage within the process is critical for each or both the manager and the employee and most certainly the organisation. The absence of any of these stage will imply that the process does not add value to all parties and is not be employed as a valuable tool to the organisation.

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Study Unit 3 (THREE) – Performance Appraisal

- Learning Outcomes

After completing this Study Unit, you should be able to

1. explain the purpose and value of performance appraisal

2. analyse the determinants of performance

3. examine the approaches to measuring performance that will be viewed as fair to employees

4. justify the use of multiple sources in gathering employee performance information

5. distinguish between the different errors that raters commit during performance appraisal

6. apply good practice in providing feedback to employees to the extent that results are accepted by employees

7. develop a good approach to deal with poor performers that will lead to these employees being committed to work towards improving their performance

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Performance Appraisal can be defined as:

“the allocation of numerical values according to specific rules and procedures. These are applied to the evaluation of behavioral characteristics and/or work outputs to determine the extent of the deviation (if there is any) from the required performance standards.”

Learning outcome 1

The main purpose of conducting performance appraisal is to develop employees and/or determine levels of remuneration (Pieters 2009:293)

The purpose of performance appraisal is that it provides information, which can be used for the following:

❖ Training and development needs can be identified. And employee’s substandard performance may be due to a lack of knowledge or skills, to be remedied through training.

❖ Career guidance can be given. Top performers can be advised to develop more skills to qualify for promotion. On the other hand, substandard performers may be advised to temper their career expectations.

❖ Selection and placement success can be evaluated. Substandard performance may indicate that the employee is not placed in the most appropriate job.

❖ Succession planning can be conducted. Staff members with potential can be identified and trained for more senior positions

❖ A personnel audit can be conducted. Management gets and overview of the current level of knowledge and skills available and of what knowledge and skills to develop.

❖ Remuneration can be adjusted

❖ Opportunities can be created for communication between the supervisor and subordinate

Performance is:

❖ Evaluative: behaviour can be judged as negative, neutral or positive

❖ Multidimensional: many different kinds of behaviour that can advance or hinder org goals

Learning outcome 2

PERFORMANCE = DECLARATIVE KNOWLEDGE X PROCEDURAL KNOWLEDGE X MOTIVATION

According to Anguinis (2009), a combination of 3 factors allows some people to perform at a higher level than others:

Declarative Knowledge: Information about facts and things, including information regarding a given task’s requirements, labels, principles and goals

Procedural Knowledge: Combination of knowing what to do and how to do it, including cognitive, physical, perceptual, motor and interpersonal skills.

Motivation: Involves 3 types of choices

❖ Expend effort (“I will go to work today”)

❖ Level of effort (“I will put in my best effort at work” vs “ I will not try very hard)

❖ Persist in the expenditure of that level of effort (“I will give up in a little while” vs “I will persist no matter what”).

Anguinis further identifies the following 3 aspects as factors affecting determinants of performance:

❖ The employees (abilities and previous experience)

❖ HR Practice

❖ The work environment

These three factors should basically serve as a point of departure when managers address performance problems. This means that managers must first identify which of these factors is hampering performance and then help employees improve their performance.

Learning outcome 3

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Job performance in context (adapted from Aguinis 2009)

Trait approach

Emphasis the individual performer and ignores the specific situation, behaviour and results. The problem with this is that traits are not under the control of individuals and the fact that an individual possess a certain trait does not mean that this trait will necessarily lead to desired results or behaviour. This approach is not fair on employees.

Behavioural approach

This approach emphasises what an employee does on the job and does not consider employees traits or the outcomes resulting from their behaviour. This is a process-orientated approach that emphasises how an employee does the job.

This approach is most appropriate when:

❖ The link between behaviour and results is not obvious

❖ Outcomes are attained in the distant future

❖ Poor results are due to causes beyond the performers control

This is a fair measure of employees

Cascio identifies the following as behaviour orientated rating methods that are widely used in organisations:

|Method |Description |Advantage |Disadvantage |

|Narrative Essay |evaluator writes down the employee’s |Provides detailed feedback |Comparison is almost impossible, |

| |strengths, weaknesses and potential, together|regarding performance |different essays focus on different|

| |with suggestions for improvement | |aspects, results could also depend |

| | | |on writing skill of the rater |

|Ranking |evaluator ranks employee from best to worst |Quick and fairly easy when a small |Difficult for groups >20 & perf. |

| |in terms of an overall criterion |number of employees are involved |Diff. are not indicated, top & |

| | | |worst easy to identify but middle |

| | | |not. |

|Paired comparison |Each employee is compared with every other |Useful for purposes of salary |Provide little basis for individual|

| |employee with reference to ability to execute|administration. |feedback and development |

| |a task. The number of times an employee is | | |

| |preferred determines position on raking | | |

| |order scale | | |

|Forced distribution |Rating in fixed categories |Avoids clustering |Lead to employee resentment |

|Behavioural checklist |Evaluator provided with a series of | | |

| |statements that describes job related | | |

| |behaviour, choose words that best describe | | |

| |the employees behaviour, and then added up | | |

|Graphic rating scale |Rate against a list of characteristics |Results expressed in quantitative |Very time consuming to develop and |

| | |terms, more than one performance |sometimes dimensions or scale |

| | |dimension and facilitate comparison|points are not defined clearly |

|Behaviourally anchored |Makes use of critical incidents as anchor |Define the dimension to be rated in|Very time consuming to develop |

|rating scales (BARS) |statements on a scale. |behavioural terms | |

| | |& use critical incidents to | |

| | |describe various levels of | |

| | |performance | |

Results approach

This approach emphasises the outcomes and results produced by the employee. Bottom line approach.

The results approach is most appropriate under the following circumstances:

❖ Workers are skilled in the needed behaviour

❖ Behaviour and results are obviously related

❖ Results show consistent improvement over time

❖ There are many ways to do the job right

Cascio identifies the following as results orientated rating methods that are widely used in organisations:

|Method |Description |Advantage |Disadvantage |

|Management by objective (MBO) |Relies on goal setting to est. |Cascading process allows success of|Short term oriented |

| |objectives. Measure of each |employees, managers and the |Little insight to employee |

| |employees contribution to the |organisation as a whole |behaviour |

| |success of the org. | |Does not facilitate comparison |

| |Meet to agree on objectives | | |

| |Dev plans – how and when | | |

| |Agree on yardstick to measure | | |

|Work Planning and review |Similar to MBO, but places greater |Frequent review of work plans |Time consuming to implement |

| |emphasis on the periodic review of | |properly and does not facilitate |

| |work plans to identify goals | |comparison across employees |

| |attained, problems encountered and | | |

| |need for training. Based more on | | |

| |judgement than objectives | | |

When should each technique be used?

Cascio (2006) points out that no method is perfect, and that the choice of a rating method should be made by looking at the relevance and acceptability of the rating system. The following advice, which is based on systematic comparisons of the various methods, is given by Cascio:

❖ If the objective is to compare employees across raters for important employment decisions (eg promotions, merit pay), do not use MBO or work planning and review. They are not based on standardised rating schemes for all employees.

❖ If BARS is used, a diary should be kept during the process. This will improve the accuracy of the ratings, and will help managers distinguish between efficient and inefficient employees.

❖ If objective performance data is available, MBO is the best strategy to use. Work planning and review is not as effective as MBO under these circumstances.

❖ In general, appraisal methods that are best in a broad, organisational sense – BARS and MBO – are most difficult to use and maintain.

❖ Methods that focus on describing, rather than evaluating, behaviour (eg BARS, summed rating scale) produce results that are the most interpretable across raters. They help remove the effects of individual differences in raters.

❖ No rating method has been an unqualified success when used as a basis for merit pay and promotional decisions.

❖ When certain statistical corrections are made, the correlations between scores on alternative rating formats are very high

Learning outcome 4

In most organisations the manager is the primary source of performance information because the manager observes employees directly and has good knowledge of performance standards. However, there are also alternative sources of information such as peers, subordinates, self and customers. Because these sources see different aspects of a person’s performance, the use thereof during the performance review offers an effective and credible way to obtain feedback. This allows the manager to assume more of a coaching and mentoring role, helping to interpret the feedback

❖ Manager

Best position to evaluate performance in relation to strategic org. goals. Also make decisions about rewards associated with performance evaluation. Most important source as they are knowledgeable about strategic issues, understand performance and are usually in charge of managing employee performance

➢ Managers however are not always the most effective sources of information as managers may not observe subordinates performance on a regular basis and therefore other sources need to be considered.

➢ Performance appraisals given by managers may evaluate performance based on whether the rate is contributing to goals valued by the manager rather then goals valued by the org. as a whole which further justifies the use of the other sources.

❖ Peers

Peers can provide a perspective on performance that is different from that of immediate managers. Anguinis is of the opinion though that peer evaluation suffers the following weaknesses:

➢ Not readily accepted when employees believe there is a friendship bias

➢ Peers are less discriminating among performance dimensions than are managers

➢ They are likely to be affected by “context effect”

❖ Subordinates

Subordinates are a good source of information regarding the performance of their managers. More accurate when the resulting ratings are to be used for developmental purposes rather then administrative purposes. Confidentiality is the key if subordinates are to be used as a source of performance information.

❖ Self

Based on the idea that employees are most familiar with their work and than their involvement is essential. When employees are given the opportunity to participate in the PM process, their acceptance of the resulting decision is likely to increase and their defensiveness during the appraisal during the interview is likely to decrease. Employees are also in a position to keep track of activities during the review period, whereas managers may have to keep track of the performance of several employees.

Casio identifies the following as common disadvantages of self-appraisal:

➢ They tend to be too lenient

➢ They are less variable

➢ They are more biased

➢ They tend to show less agreement with the judgement of the others

Aguinis suggests the following to improve the quality of self-appraisals:

➢ Use comparative as apposed to absolute measurement

➢ Allow employees to practise their self-rating skills

➢ Assure confidentiality

➢ Emphasis the future

❖ Customers

Performance information from Customers is suitable for jobs that require a high degree of interaction with the public or with particular job-related individuals. Performance information can also be collected from internal customers. Useful regarding promotions, transfer and need for training.

Learning outcome 5

|# |Name of Error |Description |Occurs when |

|1 |Similar to me error |Similarity leads to attraction, so we tend to |Similarities in attitudes, preferences, personality & |

| | |favour those who are similar to us |demographic variables, incl. race and gender |

|2 |Contrast error |When supervisors compare individuals with one |Most likely when supervisors complete multiple |

| | |another instead of against predetermined |appraisal forms at the same time because, it is |

| | |standards |difficult to ignore ratings given to other employees |

|3 |Leniency error |Assigning of high ratings to most or all |Desire to maximise the merit raise/rewards, encourage |

| | |employees – artificial rating inflation |employees, avoid creating a written record of poor |

| | | |performance, avoid confrontation, promote the |

| | | |undesired outcome of the unit, or make managers look |

| | | |good to subordinates |

|4 |Severity error |Assigning of low ratings to most or all |Managers desire to shock employees, teach employees a |

| | |employees |lesion, send a message that the employees should |

| | | |consider leaving, or build a record of poor |

| | | |performance. |

|5 |Central Tendency |When raters use only the middle points on the |Mangers desire to ‘play it safe’ makes it hard to make|

| | |rating scales and avoid using the extremes – |performance-based distinctions among employees rated |

| | |most/all employees rated as average |by the same rater |

|6 |Halo error |Manger fails to distinguish between the |Caused by manager assigning performance ratings based |

| | |different aspects of performance being rated. |on an overall impression about the employee instead of|

| | |Same level of scoring across all dimensions |evaluating each performance dimension independently. |

| | |even though performance in all dimensions may | |

| | |not be the same | |

|7 |Primacy error |When performance appraisal is influenced mainly|When raters are more heavily influenced by behaviour |

| | |by information gathered during the last portion|towards the start of the review period instead of |

| | |of the review period |giving equal importance and paying attention to |

| | | |incidents occurring throughout the review period |

|8 |Recency error |When performance appraisal is influenced mainly|When raters are more heavily influenced by behaviour |

| | |by information gathered during the last portion|towards the end of the review period instead of giving|

| | |of the review period. |equal importance and paying attention to incidents |

| | | |occurring throughout the review period |

|9 |Negativity error |Raters place a heavier weighting on negative |One negative is remembered when more than one positive|

| | |information than on positive or neutral |becomes shadowed by the one negative. |

| | |information. | |

|10 |First impression error |Raters get an initial favourable or |Can be confused with “similar to me error” because |

| | |unfavourable impression of an employee and then|firsts impressions are likely to be based on the |

| | |ignore subsequent information that does not |degree of similarity. |

| | |support the initial impression | |

|11 |Spillover error |Scores from previous review periods unjustly |Assumptions on rating based on the based |

| | |influence current ratings. | |

|12 |Stereotype error |Manager has an oversimplified view of | |

| | |individuals based on group membership and judge| |

| | |all member of the group the same | |

|13 |Attribution error |Manger attributes poor performance to an | |

| | |employees dispositional tendencies instead of | |

| | |features of the situation | |

Raters can be given training, known as rater error training (RET). During this training graters are made aware of different errors they are likely to make during the appraisal process, and they are helped to develop strategies to minimise these errors. The goal of training is to increase rating accuracy by making raters aware of the unintentional errors they are likely to make. RET programmes typically include definitions of the most typical errors and a description of possible causes.

Learning outcome 6

To avoid a feeling of resentment from employees and encourage performance improvement, Cascio (2006:358-360) suggests the following activities before, during and after the performance feedback interview.

➢ Communicate frequently with employees about their performance

➢ Get training in performance feedback and performance appraisal interviewing

➢ Encourage subordinates to prepare

➢ Encourage participation

➢ Judge performance, not personality

➢ Be specific, and be an active listener

➢ Avoid destructive criticism

➢ Set mutually agreeable goals

➢ Continue to communicate and assess progress towards goals regularly

➢ Make organisational rewards in line with performance

Learning outcome 7

Defences are an important and familiar aspect of our lives. When a person is accused of poor performance, the first reaction will sometimes be denial. By denying the fault, the person avoids having to question his/her own competence. Others react to criticism with anger and aggression as you have seen in the statements above.

In any event, understanding and dealing with defensiveness is an important appraisal skill.

When dealing with defensiveness, the manager should

•• recognise that defensive behaviour is normal

•• never attack a person’s defences (don’t try to explain someone to themselves)

•• postpone action

•• recognise his or her own limitations – the manager is not able to solve every problem and should not try to be a psychologist; the most the manager can do is to offer understanding.

The golden rule is that to avoid all these kinds of excuses, the rater should focus on the work standards when appraising employees. Furthermore, where possible, the rater error we discussed in the previous section should be avoided. Finally, employees should be recognised for good performance, always

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Study Unit 4 (FOUR) – Managing team performance

- Learning Outcomes

After completing this Study Unit, you should be able to

1. define the concept of a team in the organisational context

2. discuss why teams are formed in organisations

3. distinguish between different types of teams and examine the implications of each for performance management

4. review team performance management and recognise its challenges

5. discuss basic principles to be followed when designing team performance management systems

6. design a reward system for individuals and teams

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Learning outcome 1

A team is in place when two or more people interact dynamically and interdependently and share a common and valued goal, objective, or mission.

Learning outcome 2

The following are some of the purposes of teams, according to Aguinis:

➢ Businesses are facing increased pressure, including global competition, and the use of teams might be one way to improve products and services and to increase productivity. Also, meeting the needs of global customers often requires teams with members from different parts of the world.

➢ Many orgs have gone through downsizing and restructuring, which has led them to become flatter and has reduced the number of hierarchical levels, Using teams provides greater flexibility for these orgs.

➢ Products and services are becoming very complex, requiring many people to contribute their diverse talents to the same project. In most cases, no one individuals can surpass the combined talent of an entire group

➢ Rapidly changing business environments are also responsible for the popularity of teams because teams can respond more quickly and more effectively to changes than individuals who work alone.

Learning outcome 3

|Type of team |Attributes |Eg |

|Work or service teams/Process teams |-Process teams |Permanent team working at the assembly line in |

| |-routine tasks |a car manufacturing plant |

| |-multi-skilling | |

| |-high level of interdependence | |

|Project teams |-assembled for a specific purpose, disbanded after |Special projects team |

| |tasks are completed | |

| |-outside core production or service of org | |

| |-High degree of autonomy | |

| |-Range from Short-term to virtually permanent | |

| |-Not routine tasks | |

|Network/parallel teams |-Members not constrained by time or space and not |Team that meets periodically to consider ways |

| |limited to org. boundaries |of improving product quality or workplace |

| |-Usually geographically dispersed |safety. |

| |-Combination of temp. and full-time works, | |

| |customers, vendors and consultants | |

Learning outcome 4

In the specific case of a system concerned with team performance, one additional organisational goal is to make all team members accountable and to motivate them to have a stake in the team performance.

1. How do we assess relative individual contribution

2. How do we balance individual and team performance

3. How do we identify individual and team measures of performance

Learning outcome 5

According to Anguinis, designing a performance management system that includes team performance is not difficult if the following 6 basic principles are followed:

|Principle |Description |

|Make sure your team really is a team |Common goal not a competing one |

|Make the investment to measure |Commitment to measures to yield useful data, by: |

| |-Identifying accountabilities among team members |

| |-Identifying objectives expected of the team |

| |-Identifying what the performance standards are and what the critical competencies are in |

| |determining how results will be achieved |

|Define measurements & goals clearly |Clearly define how data will be used, admin or dev or both |

| |Source of data, how collected etc |

|Use a multi-method approach to measurement |Use multiple methods and sources of data |

|Focus on process as well as outcomes |Use behavioural/process-orientated measures as well as results orientated. |

| |Serious consideration must be given to how both types of measures will be used within the |

| |context of managing team performance |

|Measure long-term challenges |Team performance must be sampled over a variety of contexts and also over long time. Team |

| |performance should be linked to strategic goals of the organisation |

Learning outcome 6

Study Unit 5 (FIVE) – Performance Management and rewards

- Learning Outcomes

After completing this Study Unit, you should be able to

1. Distinguish between the concepts of pay entitlement and pay for performance

2. Discuss general objectives of performance related reward plans

3. Discuss different categories of rewards and provide and example of how each is awarded in an organisation

4. Briefly explain how a choice can be made between individual and group plans

5. Discuss the disadvantages of rewards in general

6. Briefly explain problems associated with pay-for-performance plans

7. Discuss the advantages and disadvantages of individual and group performance related rewards

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Learning outcome 1

• Pay entitlement – fixed salary received irrespective of the performance by the individual

• Pay for Performance – Pay received is subject and proportional to the performance of the individual, with the aim to: Support strategic objectives; Managing labour costs and Attracting, retaining and motivating talent.

Learning outcome 2

|Economic Objective |Performance-related rewards increase employee task motivation and work efforts increase and therefore also |

| |the desired outcomes |

| |Increasing task motivation: motivate greater work effort per unit of time worked – translate into increased |

| |labour productivity and reduced labour costs |

| |Altering Performance standard: using a combination of formal performance measurement and |

| |performance-contingent rewards to renegotiate pre-existing performance criteria or standards |

| |Increasing labour cost flexibility: ie. financial flexibility, using performance-contingent pay to vary pay |

| |levels and aggregate labour in line with changes over time in the organisation ie. Capacity to pay |

|Cultural Objective |Transformation of employee values, attitudes and behaviour so to elicit higher levels of organisational |

| |commitment, membership behaviour and/or organisational citizenship behaviour. |

Learning outcome 3

|Individual performance-related rewards |Merit raised or increments |

| |Merit bonuses |

| |Piece rates |

| |Sales commissions |

| |Goal-based bonuses |

|Performance-related rewards based on the measured results of large or |Profit sharing |

|small work groups internal to the organisation as a whole |Gain-sharing |

| |Goal-sharing |

| |Team incentives |

|Collective performance-related rewards based on results achieved by |Share bonus plans |

|the organisation as a whole |Share purchase plans |

| |Share Option plans |

Learning outcome 4

Learning outcome 5

Authors have identified the following disadvantages of performance-related rewards despite all the good it does:

1. Incentives undermine intrinsic interest in the job

2. Rewards motivate people to pursue one thing above all else-the reward

3. Rewards punish

4. Rewards rupture cooperative work relationships

5. Reward ignore underlying reasons for work problems

6. Reward discourage risk-taking

Learning outcome 6

Anguinis identifies the following factors as problems associated with pay-for-performance plans:

1. A poor performance management system is in place

2. There is the folly of rewarding A while hoping for B

3. Rewards are not considered significant

4. Managers are not accountable

5. Extrinsic motivation exists at the expense of intrinsic motivation

6. Reward for executives are disproportionately large compare to rewards for everyone

Learning outcome 7

Individual

|Advantages |Disadvantages |

|They make a substantial contribution to raising productivity, lowering|Greater conflict may emerge between employees seeking to maximise |

|production costs and increasing works earnings |output and managers concerned about deteriorating quality levels |

|Less direct supervision is required to maintain reasonable levels of |Attempts to introduce new technology may be resisted by employees |

|output than underpayment by time |concerned about the impact on production standards |

|In most cases, systems of payment by results, if accompanied by |They reduce employees willingness to suggest new production methods |

|improved org and work measurement, enable labour costs to be estimated|for fear of subsequent increases in production standards |

|more accurately than underpayment by time. In other words, they | |

|improve costing and budgetary control | |

| |There are increasing complaints that equipment is poorly maintain, |

| |hindering employee efforts to earn larger incentives |

| |Increased turnover among new employees is encouraged by unwillingess |

| |of experienced workers to cooperating in on-the-job training |

| |There are elevated levels of mistrust between works and management |

Group

|Advantages |Disadvantages |

|The mere presence of team members who have some stake in the rewards |It may product unintended side effects, such as competition among |

|creates social pressure and evokes more vigorous behaviour than when |groups which may or may not complement goal attainment. |

|individuals work alone | |

|The competition among co-workers is replaced by cooperation |Team incentives also involve admin responsibilities that are at least |

| |as great as those associated with individual incentive plans |

|The strength of the rewards is increased since they are now paired |Althought he lin-of-sight is clearer with team incentives, it may not |

|with social rewards, such as praise and camaraderie |be as clearer as with individual incentives. Some members may not |

| |work hard as they receive the bonus as long as the team achieves. |

|The performance of another group member can serve as a model, | |

|encouraging other team embers to imitate successful behaviour | |

Study Unit 6 (SIX) – Managing employee performance improvement

- Learning Outcomes

After completing this Study Unit, you should be able to

1. Identify situations in which a developmental plan can be initiated

2. Discuss the objectives of a developmental plan

3. Identify the important components of a good developmental plan

4. Describe different activities in the developmental plan through which employees can reach set objectives

5. Critically discuss the role of the direct supervisor in the creation and completion of a developmental plan

6. Explain the meaning of coaching

7. Discuss the role of coaching in an endeavour to improve employee performance

8. Explain what needs to be done for coaching to turn feedback into results

9. Discuss 4 guiding principles that provide a good framework for successful coaching

10. Draw and discuss the coaching process diagram

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Learning outcome 1

The following situations initiate developmental plans

1. When a performance appraisal indicates performance improvement is needed

2. To “benchmark” the status of improvements so far in a developmental effort

3. As part of professional development for the employee or group of employees, in which case here is not a performance gap as much as “growth gap”

4. As part of succession planning to help an employee be eligible for a planned change in role in the org, in which case there is not a performance gap as much as an “opportunity gap”

5. to “pilot” or test, the operation of a new performance management system

Learning outcome 2

Developmental plans have the following objectives:

1. Improve performance n current job

2. Sustain performance in current job

3. Prepare employees for advancement

4. Enrich employees work experience

Learning outcome 3

A good developmental plan contains the following components:

1. A description of specific steps to be taken and specific objectives to be reached

2. Completion date and how the manager will know whether the new sill has indeed been acquired.

3. Objectives should be practical specific, time orientated, linked to a standard and developed jointly by the supervisor and the employee.

4. Should keep the needs if both the organisation and the employee in mind

Learning outcome 4

There are several ways through which employees can reach the objectives stated in their developmental plans, such as the following:

1. On-the-job- training

2. Courses

3. Self-guided reading

4. Mentoring

5. Attending a conference

6. Getting a degree

7. Job rotation

8. Temporary assignments

9. Leadership role in professional or trade organisation

Learning outcome 5

The direct supervisor or line manager has an important role in the creation and completion of the employees’ developmental plan. Because of the pivotal role of the direct supervisor in the employee developmental process, it is a good idea for the supervisor to have his/her own development role.

Anguinis points out the following as the roles of the supervisor in the creation and completion of the employees developmental plan:

1. The supervisor needs to explain what should be required for he employee to achieve the desire performance level, including the steps that an employee must take to improve his/her performance. This information needs to be provided together with information on the probability of success if the employee completes the suggested steps.

2. The supervisor has a primary role in referring the employee to the appropriate developmental activities that can assist the employee in achieving his/her goals. This includes helping the employee select a mentor, appropriate reading resources, courses and so forth

3. The super reviews and makes suggestions about the developmental objectives. Specifically, the supervisor helps ensure that the goals are achievable, specific and do able

4. The super has the primary responsibility of checking on the employees progress towards achieving developmental goals

5. The super needs to provide reinforcements so the employee will be motivated to achieve the goals.

Learning outcome 6

Coaching is a collaborative, ongoing process n which a manager interacts with hi/her employees and takes and active role and interest in their performance. It involves directing, motivating and rewarding employee behaviour. It’s a day-to-day function that involves observing performance, complimenting good work and helping to correct and improve any performance the does not meet expectations and standards. It is also concerned with long-term performance and involves ensuring that the dev plan is being achieved.

Learning outcome 7

Learning outcome 8

Coaching helps turn feedback into results, for that to happen, coaches need to do the following:

1. Establish dev objectives

2. Communicate effectively

3. Motivate employees

4. Document performance

5. Give feedback

6. Diagnose performance problems

7. Develop employees

Learning outcome 9

1. A good coaching relationship

2. The employee is the source and director of change

3. The employee is whole and unique

4. The coach is the facilitator of the employees growth

Learning outcome 10

Reasonable, attainable and derived from a careful analysis of the areas in which an employee can improve

Identify resources and strategies that will help the employee achieve the developmental goals

Implement strategies that will allow the employee to achieve the development goals

Collect and evaluate data to assess the extent to which each of the developmental goals has been achieved

Provides feedback to the employee and, based on the extent to which each of the goals has been achieve, the developmental goals are revised and the entire process begins again

Study Unit 7 (Seven) – Strategic performance management in context

- Learning Outcomes

After completing this Study Unit, you should be able to

1. Explain the concept of strategic performance management

2. Illustrate with the aid of a diagram the process of strategic performance management

3. justify the application of SPM by critically evaluating the shortcomings of the traditional system and discussing its benefits

4. defend the use of the CSFs and KPIs when applying SPM

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Learning outcome 1

The process where steering of the organisation takes place through the systematic definition of mission, strategy and objectives of the organisation, making these measurable through critical success factors and key performance indicators, in order to take corrective actions to keep the organisation on track.

SPM goes beyond individual and team performance and focuses on the performance of an organisation as a whole.

Learning outcome 2

|Strategy development |Clear strategic action plan for measurable performance improvement-thorough understanding of key |

| |value drivers aimed at achieving a competitive advantage |

|Budgeting/target setting |Results in clear ops action plan for improving the key value drivers, for committing resources |

| |and for setting financial targets for he coming year |

|Execution/forecasting |Execute the activities that have to lead to the desired results. Regular forecasts are made to |

| |predict whether the org is still on track or whether corrective actions are needed to solve |

| |current or predicted problems |

|Performance measurement |Collects, processes and distributes data and information to allow effective execution of the |

| |other sub processes. Information is presented in the form of CSFs and KPIs |

|Performance review |Periodically reviews actual performance, targets and forecasts in order to ensure that timely |

| |preventive and corrective action is take to keep the company on track |

|Incentive compensation |Links strategic operation action for key value drivers, in a balanced way with compensation and |

| |benefit policies. This involves ensuring that the organisation rewards the right |

| |performance-driven behaviour of org members |

Learning outcome 3

|Shortcomings of traditional approach |Benefits of SPM |

|One-sided information | |

|Low-quality information |High quality information |

|Tardy Information |Timely information |

|Information overload | |

|Low relevance information | |

|Lack of communication |Efficient Communication |

|Misalignment culture |Aligned Culture |

| |Management Support |

Learning outcome 4

A CSF provides a qualitative description of an element of the strategy in which the organisation has to excel in order to be successful. The CSF is quantified by a KPI. The use of CSFs and KPIs enables measurement, and thus control of strategic objectives. If performance indicators that measure the execution of the strategy and the creation of value are not included in the performance management process, it will remain unclear whether strategic objectives and value creation are being achieved.

Study Unit 8 (eight) – Designing and implementing CSFs and KPIs

- Learning Outcomes

After completing this Study Unit, you should be able to

1. distinguish between the concepts of CSFs and KPIs and explain why they were developed

2. develop CSFs and KPIs for a specific functional area of an organization

3. explain the relationship between the concepts of CSF and KPI

4. draw a diagram to illustrate the development process of the CSFs and KPIs

5. provide four ways of measuring whether CSFs have been achieved in a specific functional area

6. illustrate by means of a diagram the five building blocks of the performance measurement pyramid

7. discuss the concept of organisational key processes

8. comment on the influence of the environment on the organisation’s business results

9. discuss the concept of result and effort CSFs

10. develop CSFs and KPIs and the KPI targets that are of the required quality

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Learning outcome 1

A CSF can be defined as a “qualitative description of an element of the strategy in which the organisation has to excel in order to be successful”. A CSF is made quantifiable with KPI’s.

CSFs and KPIs were introduced because many of the intangible assets such as patents trademarks and human capital were not included in the formal reporting of the organisation, as most of these systems were built to report financial information. This resulted in the introduction of the CSFs and KPIs, which combines non-financial leading indicators with financial lagging indicators in one system.

Learning outcome 2

Learning outcome 3

A CSF can be defined as a “qualitative description of an element of the strategy in which the organisation has to excel in order to be successful”. A CSF is made quantifiable with KPI’s.

Learning outcome 4

Learning outcome 5

To determine if each functional area has achieved its CSFs, there are generally 4 types of measures:

• Quality

• Quantity

• Time

• Money

Learning outcome 6

Learning outcome 7

To achieve the objectives, every organisation has key process. This means that just monitoring and measuring the achievement of these objectives is not enough. A key process is one that directly influences the achievement and results of objectives, and can therefore be directly linked to that objective.

Learning outcome 8

Environmental factors are factors that are outside of the organisations control but have a huge influence on organisations. This factors cannot always be anticipated accurately and therefore can be even that more devastating to an organisation.

If an organisation wants to know how it is influenced by its environment, it needs to identify indicators that provide information on the environment it operates in and on develops that effect the organisation.

Learning outcome 9

The result CSFs monitor the result of an objective, whereas the effort CSFs monitor the efforts taken to achieve the set objective.

The results CSF can be determined by answering the following questions:

What is the result when we achieve the objectives successfully?

What is the result when we execute the key process successfully?

The effort CSF can be determined by answering the following questions:

What do we absolutely need to do to achieve the objective successfully?

Learning outcome 10

Study Unit 9 (nine) – Measuring organisational performance: the balanced scorecard

- Learning Outcomes

After completing this Study Unit, you should be able to

1. Illustrate the concept of the balanced scorecard with the aid of a diagram

2. Discuss the drawbacks associated with traditionally based performance measurement approaches

3. Discuss the implementation pitfalls organisation should avoid when introducing and maintaining the BSC

4. Illustrate, with the aid of diagram, the cause-effect relationships between the 4 perspectives of the BSC

5. Argue why the organizational strategy needs to be cascaded down to business unit division and team levels

6. Apply the concept of personal scorecard in the organizational context

7. Critically discuss the different point of criticisms against the BSC

8. Describe the dos and don’ts of the successful implementation of a BSC in an endeavor to eliminate these criticisms

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Learning outcome 1

The balance in the BSC can be found in several perspectives:

1. None-financial data complements financial data

2. Leading information complements lagging information

3. Internal information complements external information

Learning outcome 2

Davies identifies the following as serious drawbacks associated with traditional, financially based performance measurement approaches:

1. Outcome focus

2. The drivers of business success

3. Strategy into action

4. Strategic communication, involvement and ownership

Learning outcome 3

The following implementation pitfalls have been identified to avoid when introducing and maintaining a BSC:

1. Vision and strategy not actionable

2. Strategy not linked to departmental team, and individual goals

3. Strategy not linked to resource allocation

4. Feedback that is tactical, not strategic

5. Management style

6. The paper chase

7. Centralised measures

8. Lack of integration

9. Ignoring conceptual issues

10. Excluding stakeholders

Learning outcome 4

Cause-an-effect relationships refer to the interrelatedness of the outcome measure and performance drivers in the 4 perspectives of the BSC. This interrelatedness manifests itself in the form of a chain, indicating that each outcome measure in one perspective can only be achieved if others in the other perspectives are also achieved. For example the organisation can enjoy loyal customers, who will have a positive impact on the ROCE, only if it delivers on time, which is the performance driver for the internal processes’ outcome measures, namely the process quality and process cycle time.

Learning outcome 5

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Learning outcome 6

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Learning outcome 7

The following are the points of criticism against the BSC

1. Imbalance in the number of stakeholders that are accounted for

2. The Social context and the environment do not have an “official” place in the scorecard layout

3. BSC disregards the human element, and underrepresents IP and Intellectual capital

4. Many case studies show that dividing performance indicators over he perspectives of he BSC makes the performance less understood by lower-level managers, which creates the opposite effect from what senior management intended.

5. And the one-way linear cause-and-effect relationships are hotly debated. Several authors argue that there are no causal relationships between the 4 perspectives because they are independent.

Learning outcome 8

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Study Unit 10 (ten) – Legal perspectives in performance management

- Learning Outcomes

After completing this Study Unit, you should be able to

1. Discuss legal traps of performance management

2. Identify SA labour legislation that impacts on performance management

3. design a performance appraisal system that is legally sound

4. apply ethical and legal considerations in the performance management process

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Learning outcome 1

According to Anguinis there are 6 important concepts that are often relevant in the case of litigation related to the implementation of a performance management system:

1. Employment at will

2. Negligence

3. Defamation

4. Misrepresentation

5. Adverse impact

6. Illegal discrimination

Learning outcome 2

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Learning outcome 3

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