FACULT OF ACCOUNTING AND INFORMATICS

DEPARTMENT OF INFORMATION AND CORPORATE

MANAGAGEMENT

BUSINESS PRINCIPLES AND

MANAGEMENT 111 (MOD 2)
2023

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1. PERFORMANCE MANAGEMENT
At the end of this chapter, the student should be able to:
 Discuss performance management and its benefits.
 Identify and explain all the key elements of the performance
management process.
 Differentiate between the various methods of performance
evaluation.
 Discuss the nature of the performance interview.
 Discuss the legal consideration that relate to performance
management.

2. Introduction
The business world is changing at an ever increasing pace. The
globalisation of markets, the revolution of information and
communication technologies, the increasing importance of financial
markets and the war of talent management are only a few of the change
drivers in our current business climate (Verweier and Van der Berghe,
2004:1). Increasingly competitive success is being achieved by
acquiring and influencing indefinable assets for example skills, systems
and values. Companies are finding that many management systems
that worked well in the past are not effective in this new environment.
Companies need to re-think their performance management processes
in order to stay competitive. It is critical to identify the top talent
available and groom them towards mastery of the required
competencies so that individuals as well as the organisational strategic
objectives are met.
At its core, performance management involves goal-setting, evaluation
and reward. When performance management is done well, employees
become more productive, profitable and creative contributors.
3. Performance management
3.1 What is Performance Management
Performance Management (PM) can be defined as a process of creating
a work environment or setting in which people are enabled to perform to
the best of their abilities for the achievement of shared goals.

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PM is a whole work system that begins when a job is defined as needed
and ends when an employee leaves the organisation.

This process entails the following:

 Clarification and communication of organisational goals.

 The alignment of individual and group goals with the organisational
objectives.
 The monitoring and measurement of individual and group
performance.
 The early identification and reporting of deviations.
 The coaching and mentoring of individuals and groups.
 The continuous review of individual and group performance, and the
re-evaluation of organisational processes and resources.

4. BENEFITS OF PERFORMANCE MANAGEMENT

PM is how the various people management policies are integrated to
support organisational performance. Performance Appraisal is one
aspect of this and an effective Performance Management Scheme,
therefore offering a number of benefits to the individual as well as the
organisation. The benefits include the following:
1. It can identify an individual’s strength, and how best it may be
utilised and weaknesses overcome.
2. It can help to reveal problems that may be restricting progress and
causing inefficient work practices.
3. It can develop a greater degree of consistency through regular
feedback on performance and discussion about potential. This
encourages better performance from staff.
4. It can provide information for Human Resources Planning, to assist
succession planning and Talent Management and to determine
suitability for promotion and for particular types of employment and
training.
5. It can improve communications by giving staff the opportunity to talk
about their ideas and expectations, and how well they are
progressing.

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 5. THE PERFOMANCE MANAGEMENT PROCESS
The process includes four key categories/activities namely:
1. Performance planning
2. Performance coaching and mentoring
3. Performance measurement and evaluation
4. Performance feedback and document

KEY ACTIVITIES – The performance management process

Setting the direction and defining expectations

Determining employee goals and objective
5.1 Performance planning ________________ Determining the evaluator and method to be used
Developing an action plan

5.2 Performance coaching and mentoring______Conducting interim checks on progress

Exploring causes of poor performance

5.3 Performance measurement and evaluation Measuring the performance

Rating the performance

5.4 Performance feedback and documentation Providing performance feedback

Recording and communicating performance results

Performance Management Process

5.1 PERFORMANCE PLANNING

There must be adequate planning for the performance management
process to be as effective as possible. This stage of the process entails:
1. Setting the direction and defining expectations.
2. Determining employee goals and objectives.
3. Determining the evaluator and method to be used during the
evaluation process.
4. Developing an action plan that will assist in guiding the process and
clarify and communicate requirements and responsibilities, as well
as being an effective control tool for the supervisor.

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5.1.1 Setting the direction and defining expectations

The supervisor and the employee meet to share information about the
goals of the organisation and how best these goals can be achieved.
This step also entails how the organisation’s strategic goals must be
adopted and adapted by the department and the individual. During this
step the supervisor shares with the employee the nature and type of
support and guidance that the employee will be provided to ensure that
the shared goals are achieved.
5.1.2 Determining employee goals and objectives

Departmental goals must be adapted and aligned with the goals of the
employee in order to instil some aspects of intrinsic motivation. If the
goals of the organisation require that employees, for example, must
produce two sales per week, it is important for managers to elicit the
goals of individual employees, based on their competencies and abilities,
and to negotiate these as long as they are above the minimum set by
the organisation.
5.1.3 Determining the evaluator and the evaluation method to be used

During the process planning stage, it must be determined beforehand

who the evaluator is going to be and the nature of the evaluation
process. Agreement must be reached about the basis on which
performance will be measured and the evidence that will be used to
establish levels of competence. Organisational integrity and fairness
prescribes that these must be shared with the employee in advance.
5.1.4 Developing an action plan

The manager and subordinate agree on specific times for forma checks
to be made and on progress towards meeting the established goals.
They also agree on the type and the amount of value that will be added
if the goals are achieved. Finally, they draft a document containing all
the key points of their discussions and agreement, indicating their
different roles and responsibilities regarding the achievement of these
shared goals. This written document that is duly signed by both parties
is useful in checking the progress made towards the achievement of
added value, and can be referred to for clarification and in times of
conflict.

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5.2 PERFORMANCE COACHING AND MENTORING
At this stage of the process the manager conducts interim checks on
progress, explores causes of poor performance, and provides coaching
and mentoring to the employee.
5.2.1 Conducting interim checks on progress

The astute manager engages subordinates as often as possible, in an

informal way, to observe and obtain feedback on the level of their
performance. It is crucial that the performance problems are identified at
an early stage and corrective action administered before substantial
problems or losses are incurred. Informal day-to-day performance
checks are much more important than an annual performance review.
5.2.2 Exploring causes of poor performance

When a team member is not performing adequately, the desire to avoid

conflict can lead team leaders to waste time and personal energy trying
to rationalise, rather than correct the problem. The result is that the
problem is not attend to the under-performer does not improve his or her
performance. Interim progress reviews and coaching meeting are the
key elements in monitoring an employee’s performance. The manager
uses coaching skills to help the employee to improve performance,
offers advice on changing behaviours, and approaches, and encourages
progress towards achieving goals and adding value.

5.3. PEFORMANCE MEASUREMENT AND EVALUATION

Putting performance measurement systems in place can be important
way of keeping track on the progress on an organisation. It gives vital
information about what is happening now and it provides a starting point
of target-setting that will help an organisation to implement strategies for
growth.
5.3.1 Measuring the performance

Employee performance can be measured on the basis of whether the

type of judgement called for is relative or absolute evaluation. Relative
judgements require managers to compare an employee’s performance
to the performance of other employees doing the same job. Relative
judgments force supervisors to differentiate among their workers.
Relative judgements do not make it clear how great or small the
differences between employees are.
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Relative systems do not provide any absolute information and so
managers cannot determine how good or bad the workers performance
is.
Absolute judgements ask managers to make judgement about an
employee’s performance based solely on performance standards.
Feedback to the employee can be more specific and helpful because
ratings are made on separate dimensions of performance. Absolute
ratings systems also have their disadvantages. All workers in a group
can receive the same evaluation if the manager is reluctant to
differentiate among workers. Also, different managers can have different
evaluations standards. Absolute rating systems avoid creating conflict
among workers and are generally harder to defend when legal issues
arise.
The objectives of performance measurement and evaluation
There are two perspectives that can be considered when evaluating an
employee’s performance: the Rational perspective and the Political
perspective. The Rational perspective assumes that the value of each
worker’s performance can be estimated. The Political perspective
assumes that the value of a worker’s performance depends on the
agenda, or goals, of the supervisor. The political approach holds that
performance measurement is a goal-orientated activity and that the goal
is seldom accurate.
Rational Approach Political Approach

 The goal of appraisal is accuracy.  The goal of appraisal is utility.

 Supervisors and workers are  Supervisors and workers are
passive participants in the more motivated participants in
process. the measurement process.
 The focus of appraisal is  The focus of appraisal is
measurement. management.
 A worker’s performance should  What is being assessed is left
be clearly defined. ambiguous.
 Supervisors make dimensional  Appropriate assessment of
and overall assessments based specifics follows the overall
on specific behaviours they have assessment.
observed.

The difference between the rational and political approaches to performance evaluation

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Methods of performance evaluation
The success of performance evaluation depends on two factors: the
person, or persons, designated to carry out the evaluation, and the
method or technique chosen to measure the performance.
Determining the evaluator
Cascio (2006) notes that the fundamental requirement for any “rater” is
that an adequate opportunity is made available for performance to be
observed over a reasonable period of time. This offers the possibility of
several different choices of “raters”.
a. The immediate supervisor or manager
This is the most popular and easiest choice of a ‘rater’. The manager is
probably most familiar with the employee’s performance and has the
best opportunity to observe actual job performance on a daily basis. The
disadvantage in using immediate supervisor/manager as a ‘rater’ is that
they may be too favourable in rating an employee because want to be
liked by employees.
b. Peers
In certain instances, the immediate supervisor/manager may not be
available in evaluating performance. In such cases, peer/collegial
evaluations can be done. Although objective criteria could be used, the
judgement of peers often provides a perspective on performance that is
different from that of immediate managers. The potential of friendship
bias to skew the feedback value of the information provided is always
present, and it is important to specify exactly what the peers are to
evaluate. Even when peer reviews are done well, it is best to consider
them as part of a system that includes input from other rates as well.
c. Subordinates
This so-called ‘reverse appraisal’ can be useful input to the immediate
manager’s development. Employees know how well a manager
delegates, communicates, plans and organises. Considerable trust and
openness is a prerequisite if subordinate appraisal are to be valuable.
They can work well in a large organisation where a manager has a large
number of employees to manage and anonymity of the employee is
assured.

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d. Self-appraisal
Cascio (2006) believes that the opportunity to participate in the
performance management process, particularly if appraisal is
combined with goal setting and the chance to add value to the
organisation, improves the “rater’s” motivation and reduces
defensiveness during the evaluation interview. Self-appraisal tends
to be more favourable, less variable, and more biased, and
probably more appropriate for counselling and development rather
than for employment decision.
e. Customer appraisal
In many situations, an individual’s internal customers, or the
organisation’s external customers, can provide a unique
perspective on job performance in the form of customer appraisals.
The customer’s objectives cannot be expected to correspond
entirely with those of the individual or the organisation concerned.
f. 360º feedback
Over the past 10 years, 360º feedback, also known as a multi-
source feedback, or the multi-rater system of carrying out
employee evaluation, has revolutionised performance
management. It is a questionnaire that asks many people
(supervisors, subordinates, peers, internal and external customers)
to respond to questions on how well a specific individual performs
in a number of behavioural areas.
The feedback is received from all those around the employee in
the organisation, from the employee’s managers to the employee’s
subordinates and peers. In some instances, customers and
suppliers are also included as “raters”. The feedback given to
employees is anonymous, for the reason that peers or supervisors
cannot be identified and possibly victimised or influenced.
The questionnaire normally consists of a number of statements
rated on a scale, and usually provides opportunity for individuals to
also add a text comment. The feedback from respondents is
collated into a report that displays actual ratings given for each
question, as well as the average response per question and for
each competency.

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An example of the kind of statements found in a 360º questionnaire is
offered in the figure below:

 He or she is someone who is open to questions.

 He or she tries new ideas first with his or her employees.
 He or she keeps firm in difficult matters.
 He or she tries to be as independent as possible.
 He or she has a large social network.
 He or she is easy to understand.

The combination of these multiple perspectives offers a more balanced

view of the employee’s overall performance. 360º feedback can be
valuable if it follows these requirements. It should:
 Be thoroughly tested for reliability and consistency.
 Measure what it says it measures.
 Be easy to use, straightforward, and simple.
 Be clearly focused on a specific set of skills, competencies or
behaviours.
 Generate clear, detailed and personalised feedback.
 Guarantee confidentiality.
The 360º system has been linked to organisational competency models,
so that the feedback is focused directly on the employee’s competency
areas. Although they are conducive to frankness and discussion,
negative feedback could result in the employee:
 Completely neglecting the feedback.
 Taking only positive feedback into account.
 Being demotivated by negative feedback.
 Taking an interest only in feedback that is given by someone
considered “really important” (such as a manager).

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Advantages and disadvantages of the 360º feedback
Advantages
 Individuals benefit from a holistic perspective of their performance.
 Individual strengths and weaknesses are identified.
 Critical key performance areas are re-emphasised.
 The impact of individual’s behaviour on others is highlighted.

Disadvantages
 Feedback is followed by lack of adequate response from mngtment.
 Can be bureaucratic and cumbersome.
 Intimidation of respondents.
 Lack of confidentiality leading to lack of honesty in providing
feedback.

If managers use an integral approach to performance evaluation and are

aware of the limitations of the 360º feedback method, they can put in
place action plans to deal with its potential weakness.
The best performance appraisal are a two-way discussions and focus on
the employee assessing his or her performance or her own performance
and setting his or her own goals for improvement.
g. Team appraisals
The growth of self-directed work teams has created a need for a
new way of managing and appraising group performance. Team
evaluations or appraisals require a combination of two approaches,
a measure of how well each member contributes to the team, and a
measure of how well the team accomplishes its goals.
Individual member contributions are usually measured through peer
evaluation. The focus of this team appraisal is usually
developmental. Team performance is most often measured against
specific team’s objectives. Teams are usually created to increase
organisational flexibility. Members often rotate assignments, and a
team must be evaluated as a unit, and rewarded as a unit, with
team incentives.
The team evaluation process is relatively easy if specific and
measurable objectives are in place.

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5.3.2 Rating the performance

1. Comparative methods

Comparative methods can be used to tease our differences

between employees by providing direct comparisons.
These comparative methods are:
a. Ranking
b. Forced distribution
c. Paired comparison

a. Ranking
This is the technique of ranking employees from the most effective
to the least effective. The ranking method is comparative,
managers judge employee performance in relation to each other
instead of against an absolute standard. The advantage of ranking
is that it is fast and easy to complete. The disadvantage is that
employees do not receive feedback about performance
weaknesses and strengths.
Examples of ranking employees by duties
Sales Administration
1. Dugan 3. Peter 1. Douglas 3. Sandra
2. Douglas 4. Sandra 2. Peter 4. Dugan

b. Forced distribution
In forced distribution, managers are forced to assign their
employees’ evaluation to predetermined performance categories,
such as poor, below average, above average and excellent
Below is an example of forced distribution:
Poor Below Average Above Excellent
10% average 40% Average 10%
20% 20%
 Peter  Iris  Siphon  Lionel  Joan
 July  John  Dough  Barry  Chris
 Susan  Sarah  Edith
 Ellis

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c. Paired comparison
Paired comparison is more reliable than simply ranking
employees. It is a system where a manager compares each
employee separately with every other worker. The manager
chooses the best performer form a choice of two employees.
Below is paired comparison rating method:

Nomfuso Harrison 
Nomfuso Thanduxolo 
Nomfuso Lisolomzi 
Harrison Thanduxolo
Harrison Lisolomzi
Thanduxolo  Lisolomzi

Number of favourite comparisons

Nomfuso 0
Harrison 2
Thanduxolo 3
Lisolomzi 1

Ranking
Thanduxolo 1
Harrison 2
Lisolomzi 3
Nomfuso 4

2. Narrative methods

These methods use a description or ‘story’ about an employee’s

performance, or merely give an indication if an employee met a specific
requirement of the job or not.
1. Essay method
2. Critical incidents
3. Checklist and weighted checklist
4. Graphic rating scales
5. Behaviourally-Anchored rating scales
6. Management by Objectives
7. Web-enabled performance management

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1. The essay method
The essay method requires the ‘rater’ to write a report in the form
of an essay, describing the strengths and weaknesses, previous
performance, potential and suggestions for improvement of the
employee. The essay method is a time-consuming, dependent on
the writing skills of the ‘rater’ and reliant on comprehensive report.
It is also difficult to compare essays for different employees as
there is no standardised scoring key.
2. Critical incidents
This technique focuses on the continuous recording, by the
manager, of good and bad performances of an employee, for
example, a manager might note the following behaviour of an
employee. March 12 – Employee H patiently attended to a
customer’s complaint. She was very polite and prompt in attending
the customer’s problem. The critical incidents method is time-
consuming and can be influenced by incidents that the recorded
towards the end of the review period, or by incidents that may
have been forgotten or omitted.
3. Checklist and weighted checklist
A checklist represents, in its simplest form, a set objectives or
descriptive statements about the employee and his or her
behaviour. If the ‘rater’ believes strongly that the employee
possess a particular listed trait, the ‘rater’ checks the item,
otherwise, the ‘rater’ leaves the item blank. Some sample
questions are listed in the checklist below:
 Is the employee really interested in the task assigned? Yes/No
 Is the employee respected by his colleagues (co-workers) Yes/No
 Does the employee show respect for his or her superiors? Yes/No
 Does the employee follow instructions properly? Yes/No
 Does the employee frequently make mistakes? Yes/No

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4. Graphic rating scale
A rating scale is developed by selecting various characteristics that
relate to the specific job. The ‘rater’ makes a choice across a
continuum between two poles, usually ranging from “strongly
agree”, to “strongly disagree” or from exceptional to poor. Graphic
rating scales are easy to apply and understand, they are
standardised, acceptable to users, are less time consuming and
provide high degree of consistency (provided all the ‘raters’ are
trained and are trained to avoid ‘rater’ errors.
The figure below is an example of a five-point graphic rating scale.
Graphic scales are popular because they are easy to understand
and apply, they are standardised, acceptable to users, are less time
consuming, and provide a high degree of consistency (provided that
the ‘raters’ are trained to avoid ‘rater’ errors).
5 4 3 2 1
Exceptional High Average Low Poor
Reliability 
Initiative  
Dependability 
Accuracy 
Interpersonal skills 
Quality of work 
Overall rating:
average
A graphic rating scale

5. Behaviourally-Anchored Rating Scales (BARS)

The BARS techniques combines graphic rating scales with
examples of critical incidents. These ratings scales are job specific
and require a high level of participation from managers. The
employer rates actual behaviour rather than general descriptions or
traits. The complex development procedure of the BARS technique
makes it time-consuming and expensive, but it could provide a
counter argument to the problem.

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6. Management By Objectives (MBO)
The MBO technique provides for an initial goal-setting phase, based
on the performance of long-range organisational objectives that the
cascaded through to departmental goals, and finally individual
goals. The latter goals are set mutually by the employee and his or
her manager. The aspect of joint participations in goal setting is one
of the major strengths of the MBO techniques, provided that the
goals are measurable and achievable.
The manager pursues an open-door strategy, inviting employee to
discuss performance problems on an informal basis at any time.
Periodically, the manager will measure progress towards the goals,
and will coach the employee if progress is lacking or slow. The final
evaluation is carried out at the end of the review period. The regular
interaction between the manager and employee provides
opportunities for building good relationship, but the popularity of the
MBO method has declined somewhat wing, in part, to the fact that it
tends to address results and not how the performance should be
managed.
7. Web-enabled performance management
Online performance management makes it easier for managers and
employees to record performance, monitor agreements and
progress. All this data can be used to assist in performance reviews
and further agreements. The aim is to reduce paperwork and
simplify the process.
Advantages of an online performance management system are
discussed below:
 It is accessible from anywhere: all you need is an internet
connection.
 Makes performance decisions based upon real-time data:
sometimes it is hard to remember all the projects your team has
been working on throughout the year when it is time to do the yearly
performance appraisal. An online system enables managers the
ability to collect performance data throughout the entire review
period.
 Goal accountability: accountability and monitoring of goals are lined
together within an online appraisal systems, allowing managers to
ensure that employees are held accountable for goals set.

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 Employees can record progress on the goals listed with in the online
system, and tier managers can review the status at any time. This
convenient access keeps everyone accountable an on track for
achievement.

3. Rate errors

Performance evaluations are filled with danger, mainly because

many human agendas come into play. Managers can be
unintentionally biased towards (or against) an employee, and
employees can be overly optimistic and present themselves as
excellent performers because this increases career progress and
determines how they are eventually rated. Several issues must be
kept in mind by whoever is undertaking the measurement of
employee performance (Dessler, 2013).
1. Unclear standards
An ongoing problem in performance management processes is
inconsistency of standards between raters. The problem lies in the
way that different people define standards: “good: “average” and
“fair” do not mean the same thing to everyone. The solution is to
develop and include descriptive phrases that define the languages
the rater is required to use. This specificity results in performance
evaluations that are more consistent and more easily explained.

2. Halo effect
The halo effect occurs when a manager’s rating an employee on
one characteristic biases the way that other characteristics are
rated. For example, if the employee has successfully added value to
the organisation through the development of higher skills. She or he
may be rated satisfactory overall, even if she or she has not added
value in other areas that were agreed on. Likewise failure in one
areas my negatively influence overall rating. This is known as a
negative halo, or the “devil’s horn” effect. Being aware of this
problem is a major step towards avoiding it.

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3. Central tendency
Some raters find it difficult or unpleasant to evaluate individual
employees higher or lower than others, even though job
performance may reflect substantial differences. In this case, they
may tend to rate everyone as average, resulting in a central
tendency. This problem can also occur if managers are unfamiliar
with the work of the employee, if the lack supervisory ability, or if
they fear a reprimand for rating too leniently or too strictly. The
solution to this problem lies in ascertaining the reason for applying
the central tendency, and then counselling the manager.

4. Leniency or strictness
Inexperienced managers often appraise performance too leniently,
and rate an employee high because they feel it is the easiest route
to follow. In some cases, the employees may not deserve the rating
on the other hand, there could be individuals in the department
whose performance has been above average and who do deserve a
high rating. In addition, some managers may feel that they will win
popularity if they use a lenient approach. This could result in
feelings that the evaluation has been unfair, or does not account for
much. Strictness could occur if the manager believes that no one
has achieved the standards required. In both cases, counselling is
probably the best method of dealing with the problem.

5. Recency
Raters can be easily influenced by recent incidents in the employee
performance. This tends to influence the manager’s overall
perception of the individual’s performance. One way of solving this
would be to hold more frequent and regular performance
evaluations throughout the performance management cycle.

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6. Bias
Manager bias may occur when the rater is influenced by
characteristics such as the age, gender, race, or seniority of the
employee. Bias may be conscious or unconscious, and can be
difficult to overcome because it is usually hidden or
unacknowledged. Counselling is the only way that the manager can
be made aware of this problem.
On the whole, proper rater training and specific development of the
appraisal system by means of job analysis can improve
performance evaluations. Many rater errors can be dealt with in this
way.

5.4 PERFORMANCE FEEDBACK AND DOCUMENTATION

The role of the observer and documenting employee performance
is frequently neglected. Keep in mind that memories are fallible,
and it is not possible to remember all the events and outcomes
over the course of a year that related to an individual’s
performance. For this reason, it is important that the supervisor
maintains measurements and keeps records of performance
throughout the period of review. Employees are also responsible
for documenting their own performance throughout the year.
5.4.1 Providing performance feedback

1. Before the interview

2. During the interview
3. After the interview

The appraisal interview should be both evaluative and

developmental. Goals that have been met do not warrant long
discussion except perhaps for the praise that should accompany
these achievements.

The interviews should take 3 sessions namely:

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Before the interview:
The rater must:
1. Communicate frequently with employee about their performance.
2. Get training in performance appraisal interviewing.
3. Plan to use a problem-solving approach rather than “tell-and-sell”.
4. Encourage employees to prepare for the interview.

During the interview

The rater must:
1. Encourage ratee participation
2. Judge performance, not personality
3. Be specific
4. Be an active listener\set mutually agreeable goals for future
improvements
5. Avoid destructive criticism
After the interview
The rater must:
1. Communicate frequently with rates about their performance
2. Periodically assess progress towards goals
3. Make organisational goals contingent on performance
4. Should salary matters be discussed during the performance
feedback interview?
The role of the observing and documenting employee performance is
frequently neglected. Keep in mind that memories are fallible, and it is
not possible to remember all the events and outcomes over the course
of a year that relate to an individual’s performance. For this reason, it is
important that the manager maintains measurements and keeps records
of performance throughout the period of review. Employees are also
responsible for documenting their own performance throughout the year.
Should salary matters be discussed during the performance feedback
interview. There’s is strong view that a discussion of salary matters
during the interview may provoke feelings of hostility and anxiety that
may divert attention from the objectives of the interview. A different view
argues that in order for ratees to take the interview seriously there is a
need for salary matter and implications to be included.

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Scheduling the feedback interview
It is difficult to prescribe how often feedback interviews should take
place. The structure of the performance management system will
provide guidelines in this regard. If the system is cyclical, formal
feedback should occur at least twice a year. Continuous feedback is
recommended even if it is largely on an informal basis.
Problems with the performance management interview
According to Grobler (2009), the performance management interview is
very worrying and a difficult duty for many managers. Some managers
invent ways to avoid the interview, even though it may be required by
policy. In other cases, the interview is glossed over or conducted in a
mechanical fashion, its value is then highly suspect.
According to Sullivan (2011) the most serious performance appraisal
problems are:
 Actual performance is not assessed: when the assessment focuses
on the “traits” and “personality” of an employee, the appraisals will
be ineffective.
 Infrequent feedback: not enough information is given on a regular
basis.
 Non-data-based assessment, managers rely on the “memory” of
performance.
 Lack of accountability: managers are not held accountable for
providing feedback.
Further performance appraisal problems arise in the area of four
emotional variable that are also important to address:
 Playing God: the manager believes that he or she has the authority
to make judgements over the employee.
 Inability to give (and take) criticism: managers have difficulty giving
constructive criticism because employees become defensive.
 Personality biases: some managers evaluate an employee’s
personality instead of the duties and responsibilities.
 Inability to give effective feedback: managers neglect to give
feedback on areas where the employee needs to improve.

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5.4.2 Recording and communicating performance results

Performance appraisals should be monitored by the rater’s supervisor to

ensure that all appraisals have been completed when required, and
conducted in a fair and consistent manner. The HR departmental also
has an important role in the appraisal process. The department should
maintain documentation of all performance appraisals and corrective or
follow-up action taken.

Legal imperatives
The Bill of Rights contained in or democratic and progressive
Constitution (1996) guarantees the right of all employees to fair labour
practices. The provision of the labour relations act (No 66 of 1995) have
special relevance in this regard. Human Resource professionals and
those in charge of performance management programmes must take
these into account in the design, development and implementation of
their programmes.
The Code of Good Practice: Dismissal enjoins any person determining
whether a dismissal for poor work performance is unfair, to consider the
following:
a. Whether or not the employee failed to meet a performance
standard, and
b. The employee was given a fair opportunity to meet the required
performance standard, and
c. Dismissal was an appropriate sanction for not meeting the required
performance standard.

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Dismissal on the grounds of poor performance is justifiable in terms of
the Labour Relations Act, but due regard to the above considerations
may enable an employer to avoid unnecessary litigation. Some
guidelines that organisations dealing with poor performers need to
consider are:
1. Written appraisals must be conducted at all level in the organisation
and must never be backdated or altered later. All raters, where
supervisors, subordinates, peers or even customers must be trained
in the evaluation process.
2. Standards must be job-related and must be consistent, explicit and
objective.
3. Rater errors must be guarded against.
4. Problem areas must be identified.
5. Timetables and specific goals for improvement must be established
when substandard performance is identified.
6. Employees must be given clear opportunities to respond to negative
feedback.
7. Written evidence must be provided that the employee received the
performance evaluation.
8. Past performance evaluations must be checked for evidence of poor
performance, especially if there are grounds for dismissals.

Katz (200) acknowledges that managers often dread appraising their

employees’ performance but believes the appraisals can be enjoyable,
productive, and successful if the following steps are followed:
1. Preparation – a critical responsibility is assessing and given timely
feedback to staff.
2. Assessment – a critical responsibility is assessing and giving timely
feedback to staff.
3. Reviewing documents – this entails reviewing all relevant
documentation for the assessment period, including
recommendations, memoranda received from other staff members
about the employee’s performance, and notes from meetings.
4. Appropriate settings – the manager’s office is not the best place for
a feedback discussion. Neutral territory, away from interruptions and
distractions, such as a conference room or even a private corner of
the cafeteria, outside of mealtimes, if often better.

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5. Deliver the feedback clearly – simple language must be used,
without code words, jargon, or abbreviations, and must allow the
employee to respond.
6. Encouragement – the employee must be motivated to continue what
she or he does well and to improve in the areas where there is room
for growth.
Performance result must be recorded appropriately and communicated
to stakeholder departments such as the HR department, where results
can be utilised for purposes of promotion, personal development, and
career planning.
CHARACTERISTICS OF HIGH-PERFORMANCE COMPANIES
This chapter would be incomplete without some viewpoints on what
effective performance management can achieve in an organisation. The
product of successful performers is a high-performance company with an
unmistakable profile that distinguishes it from the mediocre. Key
attributes that differentiate the culture of high-performance organisations
are as follows:
1. High performance organisations have a simple, compelling vision
for the future.
2. They promote a ‘true believer’ mentality (where everyone believes
in the vision of the organisation, certain that it will bring success).
3. Three or four plain values guide the organisation, such as self-
confidence, speed, and simplicity.
4. Employees are proud of their organisation, but never quite satisfied
with their current performance.
5. There is a learning opportunity in every mistake and every success.
6. The urge to earn and maintain peer respect is the greatest
motivator.
7. Employees in high-performance organisations expect that long-term
relationships will foster their careers.
8. A single person’s success is celebrated throughout the company.

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