ABSTRACT
Performance Management processes have become prominent in recent years as means of providing a more integrated and continuous approach to the management of performance in the Public Sector of the economy. Performance management is based on the principles of Management by Agreement or contract, rather than management by command. It emphasizes development and the initiation of self-managed learning plans as well as the integration of individual and corporate objectives. It can, in fact, play a major role in providing for an integrated and coherent range of human resource management processes which are mutually supportive and contribute as a whole to improving organizational effectiveness, as it is forward-looking and developmental. It provides a framework in which managers can support their team members rather than dictate to them, and its impact on results will be much more significant if it is regarded as a transformational rather than as an appraisal process. The overarching objective of Human Resources Management is to contribute to the achievement of high levels of organizational performance. The integration of human resources and business strategies will generally focus on this goal. Boxall and Purcell (2003) suggests that: ‘‘Human Resource advantage can be traced to better people employed in organizations with better processes’’. This echoes the resource-based view of the organization which states that ‘distinctive human resource practices help to create the unique competencies that determine how organizations compete, (Capelli and Cracker-Hefter, 1996). Performance goals within the public service can be achieved with the help of high performance work systems which take into account the factors affecting individual performance and promote flexibility. They also include rigorous recruitment and selection procedures, performance-contingent incentive compensation systems, and management development and training activities linked to the needs of the organization, (Becker et al, 1997). As defined by Boxall and Purcell (2003), the level of individual performance is a function of ability, motivation, and opportunity (AMO). People perform well when they are able to do so, (they can do the job because they have the necessary abilities and skills); when they have the motivation to do so, (they will do the job because they want to and are adequately incentivized); and when their work environment provides the necessary support and avenues for expression, (for example, functioning technology and the opportunity to be heard when problems occur). It is based on the above premises that this research study is conducted on Performance Management as a new strategy for improving public sectors effectiveness, vis-à-vis, the relationship between Human Resources Management and Performance Management, with the hope that people can make an impact on performance, by leading or contributing to the development and successful implementation of high performance work practices, particularly those concerned with job and work design, flexible working, resourcing (increasing skills and extending the skills base), reward and giving employees a voice; the formulation and embedding of a clear vision and set of values (the big idea); the development of a positive psychological contract and means of increasing the motivation and commitment of employees, the formulation and implementation of policies which in the words of Purcell et al (2003), meet the needs of individuals and ‘‘create a great place of work’’; the provision of support and advice to line managers on their role in the implementation of human resources policies and practices; and the effective management of change.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The trend in business environment and the quest for operational excellence as well as the need to improve employee performance have made organizations to place emphasis on performance management system in order to enhance employee productivity(Inyang 2008). Organizations whether construed as political, socio-technical, and rational systems, are increasingly demanding superior skills, operational capability, higher productivity, and improved work-related attitudes from their workers. These demands according to Krett (2000) “necessitated the establishment of effective performance management system as a pre- requisite for evaluating employee performance to ensure conformity to standard”.Chompukum (2006) asserts that “managing performance has been a very important issue for a long time, and it has gained more attention recently due to high competitive business environment, especially when the popularity of balanced score card calls for mechanism to cascade and instill the corporate strategy down through the organization and to ensure that strategy plan is actually implemented, performance management is one of practices that assist organizations to link employee goals to individual goals”.
Performance management is very important to both employers and employees. From the employer’s prospective, it is vital to understand how your employees contribute to the objectives of the organization. Muhammad (2013) asserts that organizations can achieve their goals and objectives only through the combined efforts of their employees, and it is the task of management to get work done. Employee performance management is fundamental to the effective operation of public service. Performance management is an integral part of the employees and organizations relationship. It is essentially an integrating activity that permeates every part of the operations of an organization” (Mullines, 2007).
Rajesh and Nishant (2013)maintain that “performance management is a broad concept that involves understanding and acting on the performance issues at each level of the organization, from individuals, teams and departments to the organization itself”. These issues include leadership, decision making, motivation, encouraging innovation and risk taking among others. “Performance management is a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization, and it is the systematic description of an employee’s strengths and weaknesses” (Rajesh and Nishant, 2013). Performance management is very important to both employers and employees. From the employer’s prospective, it is vital to understand how employees contribute to the objectives of the organization. A good performance management system enables the organization to understand how its employees are currently performing. Muhammad (2013) posits that “performance management allows organizations to undertake a thorough assessment of the training needs of their employees, set development plans and its gives, them the option of using the result of the performance management process to influence an individuals remuneration”. Organizations can achieve their goals and objectives only through the combined efforts of their employees, and it is the task of management to get work done (Muhammad 2013). Employee performance management is fundamental to the effective operation of organizations. According to Mullines (2007), performance management is an integral part of the employees and organizations relationship and” it is essentially an integrating activity that permeates every part of the operations of an organization”.
1.2 Statement of the Problem
Most of the organizations have used performance appraisal as compared to performance management in which the focus is made on comparison between the performance standards being made by the organization and the actual productivity of employees, while no one actually compares the performance against employees’ objectives. This affects the achievement of employee objectives negatively. Consequently, it is pertinent to state that the nature or structure of the organization can be a varying factor in determining the nature and criteria of the performance management system (Jamil & Mohammed, 2011). Thus, there is need for managers to create a vivid system that is linked to employee strategy, and appropriate in measuring acceptable and non-acceptable behaviour for improved employee productivity. The performance management system should systemically evolve starting from the level of employee, and ultimately to the level of the organization. The organization’s objective should be clearly stated for easy implementation, and the performance management system should be tailored directly to it. Inability of the organization to design or develop distinct performance objectives, stated in quantitative and qualitative terms against which performance can be measured can distort employees’ perception of their relevance to the organization (Kazim, 2008). However, the problem lies with failure of managers to manage performance, align individual goals to a common vision and effectively utilize the organization’s performance management system to stimulate employeeproductivity for enhanced employee performance. Pulako (2004) asserts that a lot of organizations face the problem of “performance planning, performance review, 360 degree feedback ,performance evaluation,self-assessment and employee input which in return create ineffectiveness for many organizations”. Performance management system begins with performance planning, which strategically examines those key areas especially work related attitudes of the employees. In doing this, employees are also reviewed, in terms of the expected attitudes and their respective results they are apparently expected to attain. The aforementioned enhanceemployee effectiveness. Pulako (2014).
Many scholars have examined the implementation of performance management in the employee productivity. Farheen, Faiza and Syed (2014) found that employees of Alfalah bank have faced the problem of dissatisfaction from their current performance management and also the current performance management system of Alfalah bank lacks motivation and proper reward system. Also, Rajesh and Nishant (2013) study revealed that performance management system helps employees to set their individual goals with the employee goals and achieve meaningful outcomes. Zhang (2012) examined the impact of performance management on employee performance and found a positive but insignificant relationship between performance management and employee performance. Others like Homayounizadpanah and Baqerkord (2012), Chompukum (2006), Ahmad (2012) and Tanvi Newaz (2012) examined performance management in relation to productivity, efficiency, effectiveness, employee culture and psychological contract. It is obvious that none of the studies have examined performance management in relation to employee productivity in south-east; hence this study is hypothesized to fill this gap.
1.3 Objectives of the Study
The main objective of the study is to examine the effect of performance management, as a new strategy for improving public sectors’ effectiveness. The specific objectives include to:
- Determine the influence of 360 degree feedback appraisal on employee productivity.
- Examine the effect of performance evaluationon employee productivity.
- Investigate the influence of self-assessment on employee productivity.
- Examine the influence of performance review on employee productivity.
1.4 Research Questions
The following research questions guided this study.
- To what extent does 360 degree feedback appraisal influence employee productivity?
- What is the effect of performance evaluation on employee productivity?
- To what extent does self-assessment influence employee l productivity?
- To what degree does performance review influence employee productivity?
1.5 Hypotheses
The under-listed tentative statements were formulated to guide this study.
Ho1: 360 degree feedback appraisal has no significant influence on employee productivity. Ho2: Performance evaluation does not have significant effect on employee productivity.
Ho3: Self-assessment has no significant influence on employee productivity
Ho4: Performance review has no significant effect on employee productivity
1.6 Significance of the Study
The study will be beneficial to the human resources manager, employees, policy formulators and researchers/academics.
To human resources managers and policy formulators:This study will provide an insight on the relationship between performance management and employee productivity. It is hoped that the findings of this study will assist the human resource managers and policy makers to better understand employee performance practices in order to improve the overall performance of the organization. It will enlighten them on how to use performance management to achieve employee productivity.
Organization:Organizations will be aided in the implementing of the most appropriate and effective performance management system. Employees will be made to understand the role they will play in order to achieve organizations objectives. The benefit is that the system will help employees and supervisors to have a cordial relationship and address the outcomes of performance management. It is paramount to tighten the link between strategic organization objectives and the daily tasks in an organization. Proper goal setting should include turnaround times and put in place a system to track progress and identify hurdles. Progress should be monitored against performance. This is a sure and clear way to recognize and reward employees who meet and exceed the organizations expectations.
Employees: The study will enlighten them on what performance management is all about. It will give them an insight in to the link between performance management and employee productivity.
Human Resource Practitioners: Human resource practitioners would benefit through provision of information that will assist in understanding the role of employees in improving significantly and providing a framework by which they can incorporate the aspects of employee contributions in performance management.
Researchers and Academics: This study will provide researchers and academics theoretical and empirical insight on performance management and employee productivity. It will help them in their future research on related topics.
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