Ellen Motlalepule Mahlulo

Student Number: 189558

Master of Business Administration

Performance Management Assignment (MBA PFM)

Number of pages: 17 excluding the cover page, references

Regenesys Business School

Submission date 27 July 2015

Candidate Declaration of Authenticity

This is to certify that I have read, understand and have complied with the Regenesys Plagiarism Policy. I
understand that failure to comply with this policy will result in us receiving penalties as outlined in the policy

Name: Ellen Motlalepule Mahlulo

ID Number: 7605250336087
Student number 189558

Signature
20 July 2015

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Table of Contents
Candidate Declaration of Authenticity ......................................................................................... 2
Question 1 .................................................................................................................................. 5
Benefits of Good Communication ................................................................................................................... 5
Communication Plan ...................................................................................................................................... 5
Employee Participation and Involvement........................................................................................................ 5
Continuous Feedback and Coaching ............................................................................................................. 6
Documentation and Records of Performance................................................................................................. 6
1.2 Suggest two improvements to the performance management system ...................................................... 7
QUESTION 2.............................................................................................................................. 8
Performance management process ............................................................................................................... 9
Performance Renewal and Reconstruction ............................................................................... 10
Question 3 ................................................................................................................................ 11
Question 4 ................................................................................................................................ 16
Introduction .................................................................................................................................................. 16
Definition of employee engagement ............................................................................................................. 16
The link between employee engagement and performance ......................................................................... 16
Benefits of measuring results in performance management ......................................................................... 18
Types of performance management tools .................................................................................................... 18
Conclusion................................................................................................................................ 19
References ............................................................................................................................... 20
Appendices 1............................................................................................................................ 21

List of Figures
Figure 2: Difference between performance management and performance appraisal adapted ........................ 12
Figure 3: Benefits of employee engagement (adapted from Kruse, 2012) ....................................................... 16

List of Tables
Table 1 Performance aspects neededto increase employee engagement and motivation ............................... 17
Table 2 Example of a Balanced scorecard for bonus payout ........................................................................... 19
Table 3: Strategic Objectives of Admin Assistant ............................................................................................. 21

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Introduction

Performance Management is a comprehensive, continuous, and flexible process that involves strategic
planning of setting goals and objectives of the company and managing the performance of those objectives
whilst continuously giving feedback to those executing the objectives through meaningful dialogue (Aguinis,
2013).
This assignment is based on a case study of performance management from Acme Progressive Company.
The impact of performance using a performance appraisal system which was driven by the Personnel
Department is compared with that of a line manager driven Performance Management System, introduced with
the appointment of a new Divisional Manager.

In this case study, I examined critical components that can improve performance in the company, namely
ongoing communication to clarify job responsibilities and to provide continuous feedback on progress and
performance and alignment of organisational goals and strategies with departmental and individual goals. This
was covered in question 1.

Question 2 unpacked performance management process and it’s usage to retain competitive edge of Acme in
terms of employee retention and satisfaction. The difference between performance management and
performance appraisals was clarified in question 3 using the case study as well as data collection tools to
conduct performance. The latter part of question looked at performance management system at my present
company.
The final part of the assignment presented efforts that organisation can make to increase employee
engagement and motivation including using performance management for developing compensation plans

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Question 1
1.1“Performance Management is an ongoing communication between the manager and each employee to
clarify job responsibilities and improve performance continuously” (Regenesys, 2015)
This essay will attempt justify the quote above to show how the communication methods incorporated at Acme
Progressive Company culminated into improved performance for the employees and ultimately the
organisation. The essay will start by looking at the definition of communication, then the benefits of
incorporating good communication into a performance management system and address key components that
a good communication plan should have according to Aguinis (2013). It will conclude by demonstrating how
communication improved performance at ACME.
Communication is a two-way process of transferring information, ideas and feelings, which can be verbal or
written down to create a shared meaning (Business Dictionary, 2015). Organisations are networks of
individuals, and communication is instrumental to transfer information on job functions in terms of what
management’s expectations are and for employees to receive feedback on their performance.

Benefits of Good Communication

Poor communication in any organisation can lead to frustrated employees who are unaware of managements’
expectation and frustrated managers who are not receiving the performance they require from employees.
There are many unfair dismissal labour cases won by employees who were either suspended or terminated for
non-performance but argued convincingly that they were not aware that there was a problem with their
performance in the first place (Stockley, 2014).
According to a Gallup study (2013) one of the key differentiating factors of successful organisations was that
managers held regular, comprehensive feedback sessions with employees about their performance. Therefore
progress on performance was clearly communicated and a platform for early warning system of poor
performance was created.
Other benefits of good communication in performance management are that management is able to express
and articulate him/herself clearly on what the expectations are and what good performance looks like. Also,
employees will not be left wondering or guessing what is expected of them but will be able to perform
accordingly. Additionally, problems areas are identified earlier on and can be addressed accordingly. Good
interpersonal relationships are created leading to harmony in the workplace.
Looking at the case study of Acme Progressive Company, it is clearly evident that prior to the recruitment of
Marie, the Divisional Manager/Director into the company, performance was poor though management and staff
seemed to be busy at all times. Symptoms of poor communication in the organisation were evident from how
staff omitted key job functions. Nobody knew exactly who was supposed to perform what function, leading to
repeated mistakes. Productivity was low.

Communication Plan
According to Aguinis (2013), every performance management system should be accompanied by a good
communication plan. Firstly it should show the purpose of performance management and how it will benefit
the employees, the organisations and customers. Benefits can include training, mentorship, coaching,
promotion and career planning.
In the case of Acme, Marie started by informing Michael, the Departmental Manager that because performance
and productivity in all departments was poor, ACME was “in trouble”. Immediately, this communicated the
importance and purpose of a new performance management system to turn the company around to prevent
job losses.

Employee Participation and Involvement

Communication is a two-way channel and it is important for all parties to feel that they are part of the solution.
Marie demonstrated this aspect excellently by giving Michael an opportunity to suggest plausible measures
that can be taken to turn the situation around.

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Michael received mentorship and coaching to also ensure that his 14 staff members were part of the solutions.
He held staff meetings and one-on-one session with each providing them with a platform to contribute towards
aligning their functions with the organisational strategies.
Secondly, the communication plan should explain how performance is aligned to organisational strategies
and goals which should be measurable and linked to performance standards. This key aspect was evident in
Acme after Marie gave Michael the strategic objectives of the company set by vice-presidents from which he
had to draft organizationally aligned departmental objectives. Once more employee participation and
involvement was evident on this point as all staff members contributed.

Continuous Feedback and Coaching

With the introduction of any new system that requires change, employees need to know what is in it for them
before they can buy into. This is one of the concepts introduced by Kotter (1997) on change management. The
importance of communication in this case is answering this question to alleviate any fears or uncertainty.
Through continuous feedback meetings, Marie was able to address firstly Michael’s fear of non-performance
from not meeting the targets, by informing him that her job is to help him do his job. Marie’s non-threatening
and approachable management style provided Michael with the assurance that he required and build his
confidence to improve the performance of his department.
Besides regular staff meetings, Michael also held monthly feedback and coaching sessions with his entire staff
member giving them regular feedback on their performance. This provided multiple channels of communication
that are important to any good performance management system according to Aguinis (2013).

Documentation and Records of Performance

Employees need to be recognized for the good performance, either verbally or in writing, an essential
communication skill of all high performance organisations according to Gallup (2013). Employees who are
recognized for their positive contributions tend to produce even high results consistently.
At Acme, this aspect of communication was demonstrated firstly in written format between Marie and Michael,
and between Michael and Sarah who each recorded tasks, objectives and standards which were agreed using
a “simple documentation process”. This enabled line managers to recognize without any ambiguity
performance and improvements which could be acknowledged and recognized accordingly.
In conclusion, performance management system can only be realized if it is accompanied by a good
communication plan which demonstrates the purpose of the system, how the employees will benefit, clarity on
job responsibilities, standards and goals and importantly how the employees and the organisation will benefit.
Central to the communication plan is ongoing feedback sessions using multiple communication channels and
documenting every achieved target whilst recognising the employee for great performance.

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1.2 Suggest two improvements to the performance management system
A plethora of articles and research have demonstrated that one of the successes of any performance
management system is based on its alignment with the overall strategic goals and objectives of the company.
It is critically important for individual key performance indicators to be in sync and aligned with the business
strategy (Atkins, 1998; Otlely, 1999; Jesuthasan, 2013, Armitage A and Parney, 2013).
This was the first improvement introduced by ACME following the appointment of Marie to improve the
organisational performance. The vice presidents set organisational goals and objectives for the year of each
every department had to contribute towards the achievement thereof. Aguinis (2013:2-3) highlighted that the
main purpose of performance management system is to ensure that organisational goals and objectives are
set on an ongoing basis and that individual’s efforts towards achieving those goals in the form of their
contribution is introduced. Moreover, there has to be continuous feedback and monitoring with employees on
their performance towards the achievement of organisational goals and objectives.
Marie communicated the organisational goals set by the vice presidents to Michael, the departmental head.
She then scheduled a meeting at which Michael’s personal contribution towards achieving those organisational
goals and objectives were set. It was at this meeting that Michael himself suggested and defined what those
goals would be. This aspect is important as people take ownership of what they build. Central to this was the
goals and objectives were measurable so that the achievement thereof can be determined used predetermined
indicators. Furthermore, departmental managers were held accountable and responsible for ensuring the
actualization of those goals and objectives with their staff members.
Following the Departmental goals set, Michael was then expected to schedule meetings with each individual
staff member in his department allowing him/her to suggest what their contribution to the organizationally
aligned departmental goals would be. This included a meeting with Sarah the receptionist and switchboard
operators who agreed that to improve customer service, the phone should ring a maximum of 5 times before it
can be answered.
The second improvement made by ACME on the performance management system was introducing
continuous feedback and communication on departmental and individual performance. Aguinis (2013) argues
that continuous feedback and monitoring is a key thrust and one of the main purposes of an effective
performance management system. This was evident in the monthly meetings that Marie scheduled with
Michael to review performance of the department on the set out goals and objectives. This practice was further
cascaded between Michael and each member of his staff in the department.
In conclusion, Marie helped managers see the picture and the significance of their contributions through the
development of departmental objectives which were aligned with organisational objectives thus performance
was measured on the basis of the progress made towards achieving the set objectives. Also, communication
was key to provide ongoing feedback sessions and measure progress achieved to date as opposed to annual
performance appraisal.

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QUESTION 2

Discuss and explain the performance management process of methods that Marie used, or can use, to retain
its competitive edge in terms of employee retention and satisfaction.
Employee retention is the processes of keeping staff engaged at the workplace for longer periods or until the
end of the project (Business Dictionary, 2015). It has been quoted extensively that employees tend to leave the
organisation if there is no plan to keep them. Moreover, there are huge human resource costs associated with
replacing the staff that left.
This essay will look at performance management process of methods that Marie of Acme Progressive
Company in the case study used or can use to retain its competitive edge in terms of employee retention and
satisfaction.
Reasons why employees
Before attempting to look at employee retention and satisfaction, it is critically important that knowledge be
acquired on reasons why employees leave. Literature review has revealed 5 major reasons that make
employees leave the organisation.
• The job did not meet their expectations
• Absence of growth opportunities in their careers
• Lack of appreciation for their job performance
• Lack of trust and support from management
• Toxic working relations with peers and management
• Remuneration not in line with the performance
• Absence of work-life balance
Judging from the reasons mentioned above, it is evident that performance management system should be
integrated into any employee retention strategy as performance is a contributing factor that can cause the
employee to resign from their workplace.
Components of employee retention strategy
Literature review suggests that employee retention needs to have five components. The components are fair
compensation in line with performance, growth opportunities in terms of career advancement, good working
relationship with management, good working environment, support from management. Therefore, performance
management system needs to incorporate the five elements mentioned above.

Wright (2013) argued that the success of any Performance Management Process in hinged upon it being
integrated into the company’s daily operational activities. In order for Acme Progressive Company to maintain
its competitive edge in the industry in terms of employee retention and strategy, it is imperative that its
performance management process be inter-twined
into the way it does business on a daily basis.

Many authors have demonstrated through research that annual performance management appraisal are
dreaded by employees and rarely fulfill the desired results of improving performance. This can be improved
through the introduction of a performance management process that is integrated and meaningful towards the
engagement and involvement of employees.

Performance Management process according to Aguinis (2013) in a continued, ongoing process that follows
six key steps namely: prerequisite, performance planning, performance execution, performance assessment,
performance review and performance renewal and reconstruction

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Performance management process
Prerequisite
Performance or the management thereof, is not possible unless employees have a clear knowledge and
understanding of the strategic objectives and goals of the company as well the knowledge of their job and job
description following a comprehensive job analysis. This is what Aguinis (2013) defined as prerequisites for
any successfully performance management process.
In the case of ACME, Marie, a new boss hired, communicated the company’s goals and objectives to Michael,
the departmental manager who was in turn expected to communicate them to his employees with a view of
defining how they can contribute meaningfully as individual staff members towards the implementation of those
goals.
The opportunity given to staff to set their own goals in line with the organisational goals and objectives, create
a sense of meaning and ultimately accomplishment when the goals are achieved. Michael did this by holding
individual meeting with all his staff members, giving them an opportunity to link their individual performance in
achieving the set goals of the organisation
The second prerequisite aspect of ensuring that job analysis and job description are conducted does not seem
to have been evident from the case study. An in depth knowledge of the job by employees can boost the
employees’ self-confidence leading to increased job satisfaction and employee retention.

Performance Planning
According to Aguinis (2013), Performance Planning part of the performance management process comprises
of three legs, namely results which defines the outcomes of the job that needs to be done in clear quantifiable
terms; the behaviour, describing attributes that needs to be followed during the execution of the job such as
team commitment and finally, development plan that describes current gaps that the employee currently has
on the result and the behaviour.
In the case of Acme, Performance Planning component was diligently executed from the time Marie introduced
Michael to the concept of setting targets. Michael’s department defined results or outcomes as follows:
• Increase sales by 10%
• Reduce errors in the ordering system to one error a month
• Cut by 50% the number of complaints from customers reaching customer service department
Once employees are cognisant of the expectations from them, it leads to greater job satisfaction and employee
retention
Performance execution and performance assessment
Performance execution entails shared commitment with the employees to carry out the tasks in a manner that
reflects the requisite behaviours taking developmental plans into consideration. It further involves continuous
feedback and review on performance, collecting performance data and preparing for next review meetings.
Marie and Michael met on a monthly basis to review performance of Michael’s department, who in turn had
monthly meetings with individuals from his members of staff. During this review meeting performance data was
collected looking at progress towards meeting the goals as well as problems that might have been
encountered, which was an integral part of performance assessment. In this way, gaps between the planned
results and behaviour against the actual were assessed.
Performance Review
Ongoing meetings or conversation between employees and their managers has been identified as one of the
key components that promote employee engagement (Hayne, 2015). This is what Aguinis (2013) referred to as
the performance review aspect of performance management process. Marie and Michael had regular one on
one review meetings and Michael did the same with his members of staff.

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Performance Renewal and Reconstruction
The last lap in the performance management process entails the repeat of the performance management
planning stage, looking at the results and behaviour again. It involves a reaffirmation of the outcomes,
behaviour and development gaps whilst at the same time making amendments where necessary.
Other suggestions to promote employee retention
Work life balance
Acme needs to introduce a flexible work schedule to allow members of staff to balance their personal life with
the demands of work. Research has shown that employees who are given flexible working times are prone to
be more productive at work place (White et al, 2003).
Career Growth and Development
Recent study showed that close to 50% of staff would consider leaving their current job for another one that
offered same benefits and salary if it also offered greater challenge and career growth and development
(Gallup, 2013). As part of the developmental plan, ACME can consider introducing an element of a career
growth opportunities for staff to see themselves as having reached higher levels of responsibility and
promotions in the next 5 to 10 years.

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Question 3
3.1 Elucidate with the help of the case study, why it is said that performance management should not be
confused with the performance appraisal.

Performance management and performance appraisals to the uninformed can sometimes are used
interchangeably and even as synonyms. Performance appraisal is a component of performance management
systems. This question will clarify, using the case study, the difference between performance management
and performance appraisals.
Performance Management is a comprehensive, continuous, and flexible process that involves strategic
planning of setting goals and objectives of the company and managing the performance of those objectives
whilst continuously giving feedback to those executing the objectives through meaningful dialogue (Aguinis,
2013).
It entails reviewing or assessing the performance of the employee. It is usually top down, using a rating
system. Most organisation perform the much dreaded performance appraisals annually by completing forms
drafted by the Human Resources Department which are often filed and forgotten until the next appraisals
review meetings the following. This was the case also with Acme Progressive company before Marie was hired
from outside.
Annual “dance of performance appraisals” as they were sarcastically called by staff was pushed by the
personnel department and completed by each employed after which the line managers would discuss the
forms with each employee for 15 minutes, sign the forms, send them to the Personnel Department, who would
file them in e-folders and forget about them until the next appraisal sessions the following year.
In spite of the conscious effort by personnel department to meet the deadline of annual appraisals there was
no real improvement of the organisational performance especially in Michael’s department. Staff members
missed deadlines and were uncertain about their job description, critical tasks were mostly omitted, there were
uncertainty on job allocations and gross repeat ion of costly errors, even though everybody seem to be busy.
In contrast performance management is conducted jointly by the employee and the line manager by means of
dialogue at regular time intervals. The performance of the staff is managed line managers and not by the
Personnel Department. It entails aligning employees’ performance with the strategic goals and objectives of
the company and gives employees an opportunity to contribute towards setting measurable targets towards the
fulfillment of those objectives jointly with line managers, conducting job analysis, and identifying developmental
gaps.
The introduction of Marie at Acme demonstrated a shifting from the annual performance appraisals to the more
integrated performance management. Marie and Michael jointly set measurable objectives for Michael who
also did the same for his 14 staff members. Importantly, the listed objectives are the ones which were used to
evaluate the performance of Michael and his staff. They were clearly typed on a single paper sheet, signed by
Management and staff and each kept a copy.
Michael had meetings with each staff member, were jobs were clarified and developmental gaps identified. He
met regularly on monthly intervals to review their performance and updated Marie. Performance reviews at the
end of the year was a culmination of regular feedback sessions which he had been having with his staff
members unlike the performance appraisals that were not linked with organisational goals.

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Source: http://www.whatishumanresource.com/performance-management-vs-performance-appraisal

Figure 1: Difference between performance management and performance appraisal adapted

In conclusion performance appraisal is a component of performance management and can only be

meaningfully conducted if performance management is in place and is linked to organisational goals and
objectives. Outside a performance management system, performance appraisal will simply be a top down, HR
department led and occurring as an annual event void organisational performance.

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3.2 Critically analyse the most common tools that the new boss of Acme Progressive Company has used for
data collection in performance appraisal
Data collection is an important tool in performance management process as it enables management to make
key decisions based on the data collected. Data has to be reliable, accurate, valid and current if it is to have
any meaningful value for managers. Importantly, the cost of collecting the data should be reasonable.
This question is going to analyse the tools that Marie, the new boss of Acme Progressive Company used for
data collection in performance appraisal.
Data can be collected either qualitative or quantitative though most good managers and high performance
organisations use both. Qualitative data, often referred to as “soft data” is based on perception and
experiences of customers with relation to aspects such as service, courtesy and responsiveness (Fairfax
County, 2007). These can be measured by means of satisfaction surveys or the number of customer
complaints received.
In the case of Acme Progressive, their target was to improve customer satisfaction and the tool that was
deployed to measure this was by means of the number of “justified customer complaints’ going to the customer
service department. This qualitative data was linked with quantitative data as the set target was to reduce the
number of such complaints to 50%.
Quantitative data referred to amounts, measurements and quantities. It’s often linked to inputs, outputs and
efficiency (Fairfax County, 2007).
For performance appraisal, Marie used a combination of various tools to collect her data. These included
Employee information
• Responsibilities, objectives and standards
• Developmental needs, plans and goals:
• Signatures

Responsibilities, Objectives and standards

In Acme, Managers and employees agreed on job specific responsibilities and targets linked to organisational
targets. These were drafted on a page and signed by the parties concerned as a demonstration of the formality
of the tool.

Developmental Needs, plans and Goals

Employees were given an opportunity to state their developmental needs as well as barriers that may prevent
them from performing their responsibilities. In expensive minor amendments were made together with training
and coaching were gaps exist. This tool not only removes performance barriers, but also ensures that
employees do not have any flimsy excuse that prevented them from performing during performance appraisals
or reviews

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 3.3 Based on your understanding of performance management paradigm, do you think that the
performance appraisal adopted in your current organisation is in alignment with the measurement
approaches of the performance management system?

According to Aguinis (2013), performance management system has two essential components that underpins
and drives it. The first component is that performance management has to be aligned with organisation goals
and objectives, which are cascaded to departments or business units and aligned to individual performance
management.
The second attribute is that performance management has to be ongoing and continuous, providing
meaningful dialogue and feedback between line managers and staff.
Sedibeng Business School is a newly established skills development training provider that offers
entrepreneurship training learnership to previously disadvantaged youth, located in Sebokeng, a township near
Vereeniging, South of Johannesburg. Learners from the school are funded by Services Seta as well as the
Gauteng Entrepreneurship Propeller to complete the course and start their own businesses during their term
with us. The author is the co-founder and Director of the School.
This short essay will attempt to unpack, based on my understanding of performance management paradigm,
whether Sedibeng Business School (SBS) is in alignment with measurement approaches of performance
management System.
Background
SBS has a staff component of 7 office employees comprising of two directors, 2 Facilitators, Office Manager,
Human Resource Officer and Admin Assistant. According to the contract with SETA the 50 learners should be
regarded also as employees as they receive a monthly allowance of R1,500 each for 12 months. Classes
commenced on 01 June 2015 with two directors and one Office Admin
Based on the knowledge learned during the Performance Management Course at Regenesys, I have realized
that although, the organisational goals and objectives were known to myself, I have never documented them
nor explained them to my staff members. The strategic goals have subsequently been penned and are
represented in the figure below.
Vision
To be the leading and preferred institution of learning, providing vocational and business skills that will lead to substantial job creation.
Business Goals and Objectives
a) To provide training to our students on entrepreneurship in a fun stimulating environment whilst fulfilling all seta requirements
b) To change the mindset of our students so that they see themselves as rich millionaires who are able to achieve anything
c) To expose our learners to business networks that will create long lasting business relationships
d)To network our students with institutions that can provide business support, mentorship and coaching as well as funding opportunities
e) To expose our students to business opportunities that will be financially beneficially to the growth of their business
f) To ensure that our students have all the necessary legal documentation required in the business fraternity
g) To provide intellectual, emotional, spiritual support to our students so that they can reach their full potential during their time with us as students.

Following recruitment of 4 additional staff members, on 01 July, I drafted a spreadsheet, which I termed
Monthly Strategic Objectives for each staff member delineating their job functions and targets for the month. As
much as possible, the objectives were drafted to be SMART (Specific, Measurable, Attainable, Realistic and
Time Bound) and they had a space where each employee had to complete to report daily on progress per
objective and also the percentage of completion. The daily report is then signed by myself after commenting on
progress achieved and not achieved and filed in the employees personnel file.
Rewards and Recognition
It is in the employment contract of the employees that a 100% completion of the set targets on time each
month will attract a R1,000 bonus paid for that month. Also during the staff meetings, staff who have achieved
all their daily targets are given a verbal praise which they greatly value. The Strategic Objectives are attached
as appendices.
Shortcomings of the Performance Management System at SBS

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The shortcoming of providing employees with developed monthly objectives is that employees were never
given an opportunity to contribute towards the development of the strategic objectives. However, for the month
of August, office staff will be given an opportunity to develop their own monthly objectives.
Secondly, the objectives were not deliberately developed to be aligned to the organisational strategy.
Feedback Sessions and Developmental Gaps
We hold staff meetings every morning to review progress achieved the previous day. During these sessions,
staff is given oral feedback on their progress based on their performance. Developmental gaps are identified
and addressed at the meeting.
Cognisant should be taken that our recruitment strategy is to hire employees who are recent graduates and
have little or no work experience. We see our company as a spring board that develops and offer experiential
learning to young graduates. Our Two Facilitators are Master Students in their final year of Entrepreneurship
from the North West University and the Vaal University of Technology (VUT). The HR office is a recently
graduated young lady who holds a BTech in Human Resource from VUT. Therefore, there are huge
developmental gaps with regards to the performance, hence the need for daily performance meetings and
micro-management to a certain degree

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Question 4
Briefly explain the efforts required by organisations to provide context and meaning of performance
management for employees, thus increas
increasing employee engagement and motivation.

Introduction
Only 13% of employees in the world are actively engaged at their workplace. This is according to a research
conducted by Gallup (2013) across 142 countries. The remaining 87% are emotionally disconnected from their
work and are often hostile and unproductive leading to poor organisational performance. The challenge for
managers worldwide is to develop strategies and approapproaches
aches that will increase employee engagement and
motivation. This essay will attempt to unpack efforts that organisations require to provide context and meaning
of performance management for employees towards improving employee engagement.

Definition of employee engagement

Employee engagement refers to the emotional commitment that employees es has with the organisation,
demonstrated by their care and love for their work and the strategic goals and objectives of the company, they
don’t just work for their next salary or getting a promotion and will often go the extra mile using discretionary
efforts for the company without being asked (Kruse, 2012).
Active engagement of employees at their workplace is not only critically necessary for the organisation’s
profitability, but will be beneficial to economic growth of the country. Kruse (2012) argued that engaged
employees will lead to increased productivity levels which will result in higher customer satisfaction which leads
to increased sales resulting in increased profit culminating to sustainable organisation and economic growth.
(see figure below)

Increased Higher
Employee Productivity Increased Increased Sustainble Economic
Customer
Engagement Sales Profit Organisation Growth
Satisfaction

Figure 2:: Benefits of employee engagement (adapted from Kruse, 2012)

The link between employee engagement and performance

A functional performance management system has been argued as one of the ways through which companies
can create a connection
onnection between the emotions of the employee with the goals and objectives of the
organisation (Mone and London, 2010; Baumruk 2004). Performance management system that is aligned to
the organisational values, objectives and goals, which has been transla
translated
ted to departmental or business units
objectives and to the employee’s job description
description, give employees reason to engage providing them with a
greater purpose and meaning in life (Regenesys Business School, 2015)

Kahn (1990:705),
), the father of employee engag
engagement identified three important psychological attributes that
drives employee engagement:

• Meaningfulness (taskstasks that are challenging and offer autonomy, creativity with an
a unambiguous
clarification of job expectation
• Safety (non-threatening
threatening and predictab
predictable
le work environment that allows one to express themselves
without fear, competent managers that show support)
• Availability (existing levels of physical and emotional resources
resources)

In 2002, Saks identified attributes required for employee engagement to include, job characteristics, perceived
organisational support, perceived supervisor support, rewards and recognition, procedural justice and
distributive justice.

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Looking at Kahns and Saks requirements for employee engagement, it becomes clearly evident that
organisations need to put efforts in the mention attributes when developing contextually relevant and
meaningful performance management for the employees.

The recent determinants of employee engagement as conducted by Anitha (2014) following on Kahns and
Saks requirements were identified as 9 but are somehow interlinked have been summarized in the table below.

Table 1 Performance aspects neededto increase employee engagement and motivation

Performance Employee Engagement Requirement
Management Aspect
Kahn (1990 Saks (2002) Joshi and Sodhi Anitha (2014)
(2011)

job
Alignment of Meaningfulness Job content that allows Organisational policies,
characteristics,
organisational values and autonomy and procedures and values
objectives with individual challenge
objectives and job
description

perceived
Ongoing feedback Safety Monetary compensation Supportive work
organisational
between staff and support, that is in line with environment, interpersonal
management on perceived qualification and harmony, showing genuine
performance supervisor concerns for employees
support, Top management and feelings
employee interpersonal
relationship Effective, authentic and
supportive inspiring
leadership.

perceived
Identifying development Availability Clear career pathing Training and Career
supervisor
gaps and closing the gaps support, and advancement Development boost
with interventions opportunities that are employees confidence
fair and transparent

rewards and
Recognition and reward Monetary compensation Financial and non-financial
recognition,
System based on that is in line with rewards motivate
performance qualification and employees to do more and
responsibility be better engaged.

Work life balance

It is therefore imperative that management adds context and meaning to performance management by
ensuring that the attributes mentioned above are incorporated into performance management and review.

Page 17 of 21
4.2 Argue the potential of measuring results in performance measurement and justify that evaluation of
performance has an effect on the salaries of employees

Performance appraisals have traditionally been used to determine annual salary increase. However,
progressive companies such as General Electric, Amazon have taken bold steps to do away with annual
performance appraisal and adopted a more integrated and continued performance management system. The
goal now is to take a more holistic approach that looks at aspects such as staff development by addressing
developmental gaps, measuring performance of the team and not just of individuals in promoting team
building, performance improvement, feedback and coaching, as well as career planning when performance is
measured. However, the bottom line for most employees is still the need for financial benefits accruing from
performance measurements in the form of salary increases or bonuses (White et al, 2003).
Increasingly, performance management has moved from just what needs to be done (outputs and results) but
also the behaviour (how the job was done) demonstrated during execution. Data collection for measuring
behavior may be subjective as can only in most cases be determined qualititatively based on perceptions and
experiences.
This essay will demonstrate that measurable performance evaluation can still have an effect on salaries of
employee, since financial benefits still remain the key driver for performance of most employees. However, this
can only be possible depending on the type of performance management tool that is being deployed. The
essay will look at a variety of performance measuring tools and based on their usage demonstrate whether
they can be used to effect salary changes or not. Examples will include 360 degree feedback and Balance
Scorecard.

Benefits of measuring results in performance management

The importance of measuring results in performance management is to determine whether progress has been
achieved. It is to evaluate whether the employee has advanced from one level to the other since the last
performance review meeting.
It is to determine whether the business unit or teams or individuals have met the goals, targets and objectives
that they were set out to achieve and determine areas of weakness that require special attention.

Types of performance management tools

a. 360 Degree Feedback

Managers receive feedback, completed by anonymous respondents, who can be external or internal
stakeholders, peers, customers, subordinates, superiors, suppliers etc, that s/he interacts with. The value of
this feedback is to identify training and development needs as well as competence assessment for succession
planning. It is not a useful tool for measuring salary increases (Regenesys, 2015)
b. Balance Score Card

Developed in 1990 by Kaplan and Norton a Balanced Scorecard is a performance management tool that links
the organisations missions and vision with departmental or individual’s performance on four perspectives:
financial, internal business processes, customer satisfaction, learning and growth. It is argued that Balanced
Scorecard is one of the most transparent ways to link performance with salary increase but the most
demanding to implement (Snapka and Copikova, 2011). Different perspectives under the Balanced Score card
can be given a weight totaling 100% and performance of each be measured against the target set at the
beginning. Measuring performance in this way can be linked salary increases or bonus for the department. See
figure below showing an example of a scorecard of a general manager who was measured on seven attributes.

Page 18 of 21
Table 2 Example of a Balanced scorecard for bonus payout
Perspective Measure Target Weight Actual Payout

Financial Return on Equity 15% 35% 17% 3,5%

Customer Market share 75% 10% 70% 0%
Customer satisfaction 70% 18% 73% 1,8%
Internal process On-time delivery 85% 10% 83% 0%
Manufacturing efficiency 80% 10% 80% 1%
Learning and Growth Employee turnover 5% 8% 3% 0.8%
Employee satisfaction 70% 12% 75% 1,2%
Total payout 8.3%

Adapted from (Snapka and Copikova, 2011)

Conclusion
In conclusion, performance management system can only be realized if it is accompanied by a good
communication plan which demonstrates the purpose of the system, how the employees will benefit, clarity on
job responsibilities, standards and goals and importantly how the employees and the organisation will benefit.
Central to the communication plan is ongoing feedback sessions using multiple communication channels and
documenting every achieved target whilst recognising the employee for great performance.
It is possible to use a variety of data collection tools to measure performance by means of instruments such as
Balanced Scorecard to increase employee engagement and develop a compensation plan that is in line the
measured performance. However, some data collection tools are qualitative and may have a degree of
subjectivity. A balanced scorecard remains the most transparent instrument to measure performance though
demanding to implement.

A good performance management involves is continued and aligned to organisational goals and strategies.

Page 19 of 21
References
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People and Strategy, 36 (2)175-183
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Appendices 1
Table 3: Strategic Objectives of Admin Assistant
Strategic Objective Of Admin
1. Ensure efficient filing of office documents
2. Provide admin assistance in the compilation
and of SETA admin monthly as per contract
stipulations time
3. Ensure that all learners academic records are
updated weekly
4. Ensure that all learners obtain their individual
performance records are filed in the PoE within
one week of completing the Unit standard
5. Work with facilitators to print out manuals for
each unit standard
6. Collection of invoice for Monthly Finance
records
7. Perform other Finance and Admin duties as per
the companies policies and procedures
Monthly Target Daily Report %completion
1.1 Open administration file for students and
include the following ID, qualifications, bank
letter, application form, interview form, test
scores.
1.2 Monitor students who did not submit their RIM
1.3 Open office staff files and file certified ID,
qualifications, bank letter, application form
1.4 Collect daily reports of all office staff and ensure
that it signed and filed
2.1 Provide Assistance to Office Manager to
th
compile sent invoices to seta by the 18 of
each month.
2.2 Provide assistance in the compilation of all
supporting documents to seta e.g. attendance
register etc.
3.1 Provide assistance in the compilation of each
learners’ scores on a hard and soft copy by
Tuesday of each week
3.2 Ensure that all SETA documents for
assessments and evaluation are completed
correctly filed in the PoE (Pre Assessment
Evaluation
4.1 File individual progress reports for all learners
per unit standard
5.1 Print and organise the manuals for each
student each week
(29 manuals printed)
5.2 Monitor learners who have not submitted the
required stationery (rims etc)
6.1 Collect and correctly file all invoices
7.1 As per management request.