INTRODUCTION

Performance management is defined as the process of continuous

communication and feedback between a manager and employee towards
the achievement of organizational objectives.

Traditionally, performance management has been a forward-looking

solution based entirely on hindsight. But organizational culture is
evolving to one of continuous feedback powered by technology, where
managers can foresee problems based on current employee
performance and initiate any form of course correction to bring the
employee back on track.

In this article, we offer clear insights into what performance

management is, the performance management cycle and best
practices, the features of an effective performance management
software, and the future of performance management.
Performance management is the process of continuous feedback and
communication between managers and their employees to ensure the
achievement of the strategic objectives of the organization.

The definition of performance management has evolved since it first

appeared as a concept. What was once an annual process is now
transitioning to continuous performance management. The goal is to
ensure that employees are performing efficiently throughout the year,
and in the process, address any issues that may arise along the way
that affect employee performance.

Performance management differs from talent management  in that

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the latter is a set of initiatives taken to engage employees to retain

them. Performance management, on the other hand, is an initiative
that guides employees towards establishing and achieving their goals
in alignment with the organization’s immediate and overarching goals.
Why is performance management important?

1. Performance management supplements the

annual performance review . This prepares both employees and
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managers about what to expect during the annual appraisal. It keeps

both the manager and the employee in the loop about ongoing
changes to the performance management process, what both can do
to streamline it, and how performance overall can be improved.

2. To employees, continuous performance management indicates

that managers value them. Employees believe that their managers
are interested in their work and care about their goals and any issues
they may face in the course of their job. They also become more open
to receiving constructive feedback.

The Performance Management Cycle

The performance management process or cycle is a series of five key
steps. These steps are imperative, regardless of how often you review
employee performance.

1. Planning

This stage entails setting employees’ goals and communicating these

goals with them. While these goals should be disclosed in the job
description to attract quality candidates, they should be communicated
once again when the candidate becomes a new hire. Depending on
the performance management process in your organization, you may
want to assign a percentage to each of these goals to be able to
evaluate their achievement.

2. Monitoring
In this phase, managers are required to monitor the employees
performance on the goal. This is where continuous performance
management comes into the picture. With the right performance
management software, you can track your teams performance in real-
time and modify and correct course whenever required.

3. Developing

This phase includes using the data obtained during the monitoring
phase to improve the performance of employees. It may require
suggesting refresher courses, providing an assignment that helps
them improve their knowledge and performance on the job, or altering
the course of employee development to enhance performance or
sustain excellence.

4. Rating

Each employees performance must be rated periodically and then at

the time of the performance appraisal. Ratings are essential to identify
the state of employee performance and implement changes
accordingly. Both peers and managers can provide these ratings for
360-degree feedback.

5. Rewarding

Recognizing and rewarding good performance is essential to the

performance management process, as well as an important part
of employee engagement . You can do this with a simple thank you,
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social recognition, or a full-scale employee rewards program that

regularly recognizes and rewards excellent performance in the
organization.
CHOOSEN COMPANY
2.0. IMPORTANT USES OF PERFORMANCE EVALUATION IN SELECTED
ORGANIZATIONS

2.1. Introduction

Performance evaluation is an important Human Resources Division activity for effective

management. Performance assessments need to be carried out because organizations can find
out information about employees that can be used for promotion and salary purposes. However,
according to Dessler (2003), an ineffective performance assessment can provoke a conflict
between the employee and the employer with the employee, if the assessment aspect is
unknown to the assessed employee, the criteria used by the organization are less clear and it is
possible that the assessment is carried out unfairly.

If this happens, this situation will adversely affect the cooperation between a working team in an
organization. Hence Human Resource Management Plays an important role in creating this
complex task, namely the evaluation of employee performance. Below will be described about
some of the important uses of performance evaluation in an organization such as MDHS.

2.2. Important Use of Performance Assessment

There are several importance of performance evaluation in an organization described below:

2.2.1. Human Resource Planning and Development

MDHS at the beginning of each year will direct all employees to make work plans where tasks
are listed together with work targets for the rest of the year. At the end of the year, the actual
targets and achievements should be displayed in the performance evaluation form.
From the actual achievements made by the Human Resources Division, the Human
Resources Division can determine which employees need training, courses and learning as well
as the self-development of an employee. The manager is able to organize attractive programs
to improve performance and reduce employee weakness. Programs and courses can certainly
give employees pleasure and are eager to work. This can also improve the position of
employees in the organization.
Apart from courses and training, employees at MDHS are encouraged to participate in
innovation competitions organised annually. From here the employee's expertise in a matter will
be taken into account during the performance evaluation. In this way employees can
demonstrate the abilities that are inherent in them and be able to develop themselves in a more
extensive and successful field in the future.

2.2.2. Recognition / Qualification

At the end of each year, MDHS employees will be celebrated by employers by holding the
Excellent Service Award (APC) celebration. Through the performance evaluation system MDHS
can recognize outstanding employees and be given a prize money of RM 1,000.00 as well as a
certificate of excellent service.

The data and scoring information obtained can assist the Human Resources Division in
managing the promotion and salary increase of an employee. In addition, excellent employees
are encouraged to participate in management mentoring programmes and be an example to
other employees to further improve their performance in the future and help MDHS achieve its
objectives and goals.
An employee who does not show consistent work can be changed or terminated from a
contract. To that end, pre-emptive assessment is especially important when the Human
Resources Division needs to make a performance evaluation report in writing as a formal written
record is essential for future assessments and is important for implementing legal procedures.

2.2.3. Rewards

Rewards are also one of the important uses in implementing performance evaluations in an
organization such as MDHS. It is a basis for managers to decide to award rewards such as
bonuses or special allowances to outstanding employees.

At MDHS, bonuses will be awarded at the end of the year according to the marks given by the
manager to the employees. At least only 1% of staff will get a bonus of 2 months' salary
according to the performance assessment given. The rest will enjoy a bonus of 1 month's salary
or a maximum of RM 1,000.00. This will undoubtedly encourage for employees to be more
eager to perform the duties and work assigned by the supervisor.
In this regard, a good performance evaluation system can encourage employees to try their best
by expecting that the better the work then the higher the rewards and allowances received. To
promote good performance, performance-based rewards need to be implemented by Human
Resource Management. This is further reinforced by the statement by Snell, Morris &
Bohlander, 2016 that awarding performance-based rewards can have a positive impact on
employees and organizations.

2.2.4. Motivation

According to Boselie, Paauwe & Jansen (2000) Human Resource Management activities carried
out effectively can influence employees in terms of increased motivation and commitment. A
consistent and effective performance evaluation process can increase the level of self-
motivation of an employee. Motivation can also encourage and drive efforts towards improving
employee performance.

One of the principles of motivation is to promote positive competition in improving quality and
productivity to achieve the objectives of the organization. If the employee is increasingly
motivated, this will do the employee himself a good in performing their daily tasks more
productively and efficiently.

Performance evaluation plays a role in shaping motivation in employees. Pushing towards good
motivation, managers should ensure that performance assessments are effectively and more
transparently implemented.

3.0. ANALYSIS ON THE USE OF IMPORTANT PERFORMANCE ASSESSMENTS TO

ACHIEVE ORGANIZATIONAL GOALS

3.1. Analysis 1 - Human Resource Development and Planning

MDHS takes the development of each of its employees seriously. Employees should be given
the opportunity to develop themselves. MDHS always organises self-development courses or
trainings as well as providing opportunities for employees to pursue higher education. Course
and training information will be used as a performance gauge.
The MDHS needs to see whether the employee has been sent for the appropriate course to
each selected employee. After that, monitoring should be done whether the course content is
applied at the workplace or not. If not, the manager can discuss with the employee and identify
the real problem facing the employee. If necessary, the employee may be sent back for a
course or training that is appropriate to the field of work pursued. Managers should also ensure
that the training environment is attractive with comfortable facilities. This can give employees a
course of encouragement.
3.2. Analysis 2 – Recognition / Qualification

Employees who perform well should already get a high performance rating compared to
employees who perform poorly or poorly. High performance assessment provides an
opportunity for employees to promotion and raise their salaries as well as special awards in
accordance with the achievements of an employee. Employees are notified of the results of the
assessment obtained whether they have reached the level required by the department. The
Manager shall inform the requirements of the task in order to correct the weaknesses that occur.
If the employee still shows a decline and does not seek to improve performance then the
employee is unlikely to be raised or terminated if the department is forced to do so. Employees
who do not show interest in the work or assigned tasks are likely to find it difficult to get
promoted or higher grades. For the improvement of the grade of an employee will be filtered in
terms of the qualification of the performance assessment that has been made. Various other
aspects will be taken into account such as the attendance of employees to the office,
assessment scores and attitudes in the course of the task.
The Manager should identify employees who are not interested in the duties and
responsibilities that have been assigned. Managers can discuss and provide opportunities for
problematic employees by making job turnovers or being transferred to a more suitable
department. If the employee still does not show positive changes, then the act of terminating the
service of such an employee is justified.

3.3. Analysis 3 – Rewards

The award of rewards or any other form of prize money given by the department is an impetus
to employees in achieving the goals of the department. It can give impetus to employees to
perform tasks more diligently and always comply with the rules of the department and
organization. Low valuation results can be a challenge for employees and will further improve
work efficiency in the future in the hope of being rewarded or praised by the organization.

Rewards or gifts can be kept confidential so that employees will be more motivated to
perform their duties more quickly and efficiently to know the rewards that the department will
give. Bonuses, on the other hand, should be given consistently to employees in order to give
satisfaction and joy when receiving them. In addition, birthday gifts can be created to further
enhance the work spirit of employees individually or in groups.
3.4. Analysis 4 – Motivation

To increase motivation, employees can be sent to attend courses of interest. Even if the course
does not meet the employee's daily duties, the manager should be sensitive to the courses or
training attended by the employee to be taken into account when evaluating the performance.
This can give the employee some motivation.

Managers should make appropriate job turnovers so as not to reduce the motivation of
employees to continue working and eventually work performance will decrease. In addition, the
manager should inform about the assessment scores obtained by the employee whether
satisfactory or not. This can provide an opportunity for employees to talk about the tasks that
have been solved and to be able to express any problems encountered in the course of the
task. A manager or supervisor who always provides support will positively motivate the
employee and will have a positive effect on the organization in achieving its goals.

4.0. RECOMMENDATIONS ON HOW TO INCREASE THE USE OF PERFORMANCE

EVALUATION IN THE ORGANIZATION IN ACHIEVING OBJECTIVES

4.1. Conduct appropriate training

Following observation, MDHS regularly sends employees to attend courses and trainings.
However, employees are not notified in advance before being selected to attend courses or
trainings. Therefore, it is recommended that the Human Resources Division first check whether
the selected employee is interested or not to attend the courses that have been set by the
department.

The management may ask the employee to list the courses or trainings that the employee wants
to follow. This can reduce the sense of stress faced by employees because they feel that the
courses are not suitable for themselves and the areas of work. By finding this the management
can also plan the course and provide as much information as possible about the training
program and course as well as inform the chosen purpose of the training before the training
actually takes place. This can give an idea to employees who are going to attend training or
courses and will feel more at ease in the face of it.
4.2. Equal division of work

The management shall review the duties assigned to the employees in a unit divided equally.
An equal and fair division of work and duties can prevent employees from considering
management biased. Of course, employees who are burdened with work and many tasks will
complete the assigned tasks more slowly compared to those who are burdened with little
responsibility. This will cause injustice to occur when making a performance assessment.

The manager should review that the list of tasks that have been arranged to the employee is
divided equally so as not to burden some employees in the department. The smoothness of this
equal division of work can help managers make more accurate and effective performance
assessments.

4.3. Reliable Performance Measurement Methods

There is a confused management or department head to perform an assessment to an

employee through the supplied performance evaluation form. Assessment through a form is
something of a general nature in terms and evaluation criteria that are found to be not specific to
the assignment and scope of work of the employee. This is a challenge for managers or
supervisors to evaluate performance through acquired tools on the assumption of assessing
what is necessary and leaving irrelevant criteria.
Management needs to have reliable performance evaluation tools or measurement methods to
enable employee performance information to be properly collected and evaluated. Errors can
occur due to flaws in the assessment system through forms. The manager can cause errors in
evaluating the employee by giving a lower score while the employee has done his job well.
Therefore, it is recommended that the appraiser first be given a course on how to give a correct
assessment. The management should create a more specific and easy-to-understand
assessment form and the criteria on the form are suitable for all employees in an organization.
This way the manager is easier to discuss and explain the criteria and standards that have been
set.
 a) Issues and problems (Need to provide source to your
claims, it can be journals, reports, articles, statistics
etc. You are required to provide a copy/digital copy/
website).

Performance management is a powerful tool for companies looking to boost employee

engagement and productivity. But when companies fail to use it correctly, problems can arise
which affect their bottom line.
Jim Harter’s article for Gallup, titled ‘Failed Performance Management: The Fix, outlines the
need to transform the way we conduct performance management’ states:
“For organisations and managers, the need to shift from performance management to
performance development couldn’t be more urgent. More than 90% of employees who change
jobs leave their company. What employees — and particularly those in the up-and-coming
millennial generation — want in a new organisation is overwhelmingly ‘career progress.’”
The article continues:
“Employees today demand more from their companies. They are asking for meaningful work
and managers who care about them as people and provide ongoing communication, clear work
expectations, and opportunities to learn and grow. This requires extreme alignment and
harmony in how organisations develop people and hold them accountable.”
Clearly, there are challenges for business leaders who are attempting to get performance
management right. 
In this article, we’ll explore five of the most common performance management issues, and the
steps you can take to overcome them.
1. POOR COMMUNICATION
Clear communication is the lifeblood of any successful company. On the other hand, poor
communication can lead to a wide range of problems.
Poor communication can take on many forms, including:
 Badly-worded emails which are misunderstood and result in a lack of action
 Poor communications systems which fail to deliver information to the right people
 Unproductive meetings which go off-topic
 Distracted managers and team leaders who fail to understand the problems their
employees are facing
The effects of poor communication are varied. Employees can lack an understanding of
expectations, leading to negativity and poor performance. Lack of trust, absence and sickness,
and low morale will follow.
Relationships also begin to suffer, leading to a loss of feedback. If business leaders don’t step in
to address the problem it can get out of hand.
Poor communication is one of the most common performance management issues. Fortunately,
there are systems that can be put in place to prevent this from happening.
Using a multi-channel communications platform
Multi-channel communications give businesses the framework for a consistent communications
strategy. Rather than focusing comms in one direction, they allow for the flow of information
across platforms including emails, SMS, and in-app push notifications. 
This is crucial for companies that have adopted a hybrid work model, with remote workers and
other off-site employees working with staff based in the office. With a multi-channel
communications platform in place, they can:
 Create more opportunities for dialogue
  Implement steps to confirm messages have been read and understood
 Reach employees wherever they’re working, including via phones if they’re on the road
 Personalise communications to bring them in line with company culture
 Gather data into the effectiveness of the communications strategy
 Set priorities and alerts for urgent messages
2. MICROMANAGEMENT
Micro-managers often feel like they are doing the right thing for their employees and teams. But
often their input only serves to lower morale and increase employee stress. 
Some of the signs of micromanagement include:
 A manager involves themselves in other people’s work
 A focus on the details instead of the big picture
 Ignoring the experiences and skills of their colleagues
 Discouraging others from making their own decisions
 Expecting regular reports
Micromanagement is one of the more serious performance management issues, blocking
creativity and giving rise to poor performance. Micro-managers see themselves as looking out
for the company’s best interests. But the end result is often the opposite.
Using performance management tools to avoid micromanagement
Performance management software features tools that can be used to reduce the impact of
micro-managers on the workforce. 
Visual dashboards
One of the main problems with micro-managers is their constant need to check in on progress.
With a performance management dashboard, they can monitor the progress of individuals,
teams, and departments without the need to interrupt their work. 
This allows them to focus their efforts only on those employees who appear to be falling behind
with their tasks. Employees who are on top of their workload can then be left to their own
devices.
Scheduled check-ins
Providing a clear structure regarding where and when employees meet to discuss progress can
help to reduce the interference from micro-managers. One of the major issues with
micromanagement is that of constant interruptions. Regularly scheduled check-ins force them to
restrict interactions to a set time and place.
3. LACK OF TRUST
There are a number of studies that emphasise the link between employee trust and workplace
performance. These studies have found a positive link between trust and performance, which
increases in the context of dealing with remote workers. 
An article from Forbes explains how the shift towards digital communications has played a key
role in how trust is preserved with ongoing feedback.
“The key to performance management across a remote workforce is to enable continuous
feedback to be generated and acted upon. It’s only through better quality feedback that better
quality outcomes are delivered. This has always been the case, but COVID-19 has really
emphasised its importance.”
Performance management tools offer the perfect opportunity to set up a broad range of
processes to enhance trust. These include:
1. A company culture which understands the importance of trust. Business leaders
who model this value are more likely to develop a workforce which reflects it themselves.
Performance management software can be used to embed values in an employee’s
daily workflow.
2. Employee sentiment feedback systems. Using feedback systems such as employee
Net Promoter Scores (eNPS) gives business leaders a direct line to the sentiment of the
workforce. These feedback systems will highlight if and when trust is dropping.
3. Awards and recognition tools. When employees feel their work is valued their levels of
trust increases. These awards should go beyond the traditional manager-to-peer awards
and include peer-to-peer recognition. This ensures trust and appreciation runs
throughout the company.
4. Real-time performance feedback. Performance-related feedback needs to be
proactive. When employees feel their problems are being addressed in a timely manner,
they trust their leaders more. Regular conversations also help to build relationships and
connect people on a personal level.
4. NOT SETTING GOALS OR EXPECTATIONS
A failure to set clear goals leads to employees who lack focus and direction. Clear goals give
employees something to aim towards. Such goals help establish the expected standards and
the rewards for success.
Performance management tools overcome problems associated with goals and expectations.
They provide a platform to set and track a range of goals. Activities and results can all be
tracked through clear metrics to make sure employees know exactly what is expected of them.
Using Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs)
OKRs and KPIs are both excellent ways to set goals and measure progress towards success.
OKRs allow users to break down large tasks into easy to manage schedules. 
KPIs function in a similar way, and can be used to line up individual objectives with the company
at large. When tracked through performance management software, these goals can be viewed
via the dashboard feature. This keeps managers and employees up to date on tasks and
deadlines so that expectations are clear.
5. FOCUSING ON THE WRONG THINGS
Many performance management issues arise because the tools are being used for the wrong
tasks. Here are some of the key areas of focus that need to be considered when developing a
performance management strategy.
Performance ratings
Josh Bersin outlined the problem with performance ratings in his article, ‘We Wasted Ten Years
Talking About Performance Ratings’. He describes a new shift away from the old approach to
ratings towards a focus on development.
“The highest-performing companies surveyed in Bersin’s new study said the goal of
performance management is ‘growth and development’ – helping people perform better in their
role and grow their career.”
This echoes Jim Harter’s sentiments in the Gallup article: performance management fails when
it avoids focusing on opportunities to learn and grow. In this sense, performance management is
better framed as “performance development”, moving away from the evaluative aspect of the
process.
Emphasising annual performance appraisals
The move away from annual performance appraisals has been as consistent as they move from
paper-based documentation to digital. Yet many companies are still locked in the once-a-year
mindset. Instead, they should be moving towards monthly or quarterly reviews. 
Annual reviews can be inaccurate, as opinions are often skewed by their recent experience of
the employee’s performance. This bias is removed when employees are reviewed regularly. As
with feedback more generally, employee reviews should be part of an ongoing process if
performance is to be effectively managed
b) How does it affect employment in Malaysia
c) Explain about the issues in Malaysian context or
Companies / Industries
d) Compare with what is being practice in other
countries.
e) Suggest actions that can be done to overcome /
minimize it.
f) High light the role of the government, organizations,
employee or trade union.
g) Conclusion
5.0. SUMMARY

Based on the explanation and explanation made on the important uses of performance
evaluation, it can be summarized that an organization is very important in implementing the
performance evaluation process consistently and systematically. The manager should plan
ahead of time and always make fair and fair monitoring between each employee. This can avoid
conflict among workers.
.
Before making an assessment or giving marks the manager should meet with the employee to
discuss the problem and explain the scoring to be given and discuss the criteria to be evaluated.
This is to give satisfaction to the employee and not to become a dispute in the future. The
recommended improvement recommendations are expected to assist MDHS in implementing a
more effective performance evaluation system so as to avoid conflict in the department and
achieve its objectives and goals.

Therefore, an organization should form a performance evaluation system capable of motivating

employees to improve performance in order to increase the productivity of the organization.
With this, an effective performance evaluation system can ensure that all parties, i.e. employers
and employees benefit from the assessment while also strengthening their position and smooth
Human Resource Management and subsequently achieve the organisation's objectives, vision
and mission.