1.

Introduction

There are many options for the design of performance management systems and processes.
However, they have overall themes in common, as almost all these options involve the setting
and monitoring of clearly defined standards of performance for each role and most include a
goal or objective setting process. Feedback and rewards are also common to most performance
management processes.

A popular design for performance management makes use of the Balanced Scorecard model.
The balanced scorecard model is a strategic planning and management system that aligns
business activities to the vision and strategy of the organisation (Zietlow et. al., 2019:79). It also
aims to improve internal and external communications and monitor organisation performance
against the strategic goals.

The Total Quality Management (TQM) approach can also be used to provide the context and
inform the organisation’s performance management process.

These notes will discuss the implementation of a performance management process in terms of:

 Clarifying the employee’s role including the setting of SMART goals;

 Measuring the living of company values and behaviours;

 Agreeing on development plans to support the employee in delivering on the

performance promise in line with their career plans;

 Methods of appraising performance; and

 Holding interactive discussions.

2. Starting the performance management process

The first step in the performance management process is often to describe the role (also known
as a job description) that an employee is required to fulfil. This role is the reason why the
employee was recruited and selected to join the organisation and why they are paid a regular
salary. It is usually described in terms of key responsibilities (most jobs have between four and
eight). Key responsibilities are statements describing the results required from a role and state
what is required of the role and why, but not how it is done.

Key responsibilities are used as a basis for recruitment specifications, performance management,
and career progression. They are:

 Precise, realistic and descriptive of a separate and distinct end result.

 Fairly consistent over a period of time, even a number of years.

  Worded to emphasise the action that leads to an end result, and therefore start with an
action verb. Examples of these action verbs include: create, develop, promote, persuade,
manufacture, reconcile, monitor, build, resolve, design, recommend, verify, improve, or
advise.

 Often weighted in terms of their importance to the organisation at the time. All key
responsibilities of a role total 100% and no individual key responsibility should have less
than a 15% weighting.

The table below indicates how key responsibilities are effectively written in this form:

Table 1: The formulation of key responsibilities.

What is done? To what/whom? With what outcome or end

result?
(Start with an action
word.)

Promote newly-launched
to existing customer base to meet sales targets.
products and services

to encourage involvement
Create a climate of
within the work team commitment and
motivation
productivity.

according to the system’s

Implement all
guidelines, in the right spirit,
components of the
with all staff members and following the calendar in
company’s performance
the performance
management system
management year.

2.1 Setting and agreeing on goals

Goals are generally set for some or all of the key responsibilities to show where particular
emphasis or focus is required for the six months or year ahead. Goals are outcome-based and
include areas where factors need to be improved or taken advantage of in support of the
organisation’s performance. The manager and respective employees discuss and agree on these
goals. It is common for a maximum of four or five goals to be set. Individual goals can be
weighted in terms of their importance, with all goals totalling 100%. Ideally, no key goal should
be weighted at less than 15%.

All team and individual goals can be written in the style of SMART goals to ensure clarity and
completeness. Clarity on what is expected of staff at the start of the financial year provides a
greater likelihood of success. It guarantees a more constructive review process, as the outputs
will be clearly specified and measurable.
SMART goals are:

 Specific: They describe a single desired output or result and must be understandable to
those who will help reach the goals. Ensure that you do not have several goals combined
into one. Your goals should also be challenging and “stretching” to encourage above-
average performance. These can be ascertained by answering the six “W questions”:
Who? What? Where? When? Which? Why?

 Measurable: Goals should provide for a number of performance indicators. Quantitative

performance indicators may specify dates, percentages, quantities, or numbers to be
achieved. Qualitative performance indicators may specify a standard required, or may
refer to processes, customer surveys, checklists or responses.

 Achievable: This is made possible with the resources available and with certain
circumstances prevailing. Gaining agreement between the manager and employee is the
preferred way to ensure that the appropriate space, support and resources are provided
to support the achievement of identified goals.

 Realistic: Goals should be sensible and consider the time available, along with any
constraints or challenges. They should be achievable through or by a defined process, for
example through an established procedure, with good time planning or by using an
outside resource. Individual goals should be relevant to both organisation-wide and team
goals.

 Time-bound: Goals require a defined schedule (including milestones), which must be

achieved by a specified date. Working towards a goal should also be undertaken at the
right time, which is when the completion of a project is possible and preferable.

A useful three-step framework to structure the writing of SMART goals is provided below:

Table 2: A framework for writing SMART goals.

Specific goal Method Standard or measurement

Reduce investment in by streamlining lead time for a successive 90-day

all inventory between orders and period, and totalling R5m for
(operational excellence) instalments the financial year.

Identity four new clients and build the relationship by thereby closing business to
in the manufacturing adding value through the value of R5m in GP per
industry (customer developing targeted client by September 2020.
 satisfaction) business solutions

Research, develop, and

piloted in June and available
provide relevant by consulting a variety of
from 1 July, at the cost of
training to 400 sales sales managers to identify
R500 pp, and is rated 80% or
staff (people and specific learning needs
above by learners.
culture)

2.2 Discussing company values and agreeing on behaviours

Many organisations do not include values and behaviours as part of their performance
management process, although it is becoming common to include them. In fact, some companies
now only measure and reward performance against their desired behaviour descriptors. This area
of behaviour-based measurement involves discussing the company values and agreeing on the
behaviours that need to be lived as part of all day-to-day work activities.

All employees are encouraged to embrace and live the company values and behaviours that
reflect the culture of the organisation and support the business requirements, opportunities, and
challenges. Employees and managers can be measured against checklists of values and related
behaviours that are ideally developed in consultation with all stakeholders. Importantly, clients
are also able to rate the employees of a company against an agreed-upon set of behaviours.

Behaviours can be rated against any rating scale. For example, consider the following five-point
rating scale:

1 = Below average; 2 = Average; 3 = Good; 4 = Very good; 5 = Excellent

Alternatively, a behaviourally anchored rating scale (BARS) is used. This scale requires an in-depth
understanding of each position’s key tasks, along with an understanding of the full range of
behaviours displayed by individuals in carrying out such tasks. For example, in a hypothetical
position of Human Resources Administrator, part of the role’s responsibilities is to update the
HRIS regarding changes to an employee’s position, title, remuneration, and reporting lines. The
BARS method for this specific task in this role could be defined as:

5 = Excellent performance: Accurately completes and submits all change notices within an hour
of request.

4 = Very good performance: Verifies all change notice information with requesting manager
before submitting.

3 = Good performance: Completes change notice forms by the end of each workday.

2 = Average performance: Uncooperative when requested to complete a status change notice

but does it within a day or two.

1 = Below average performance: Says change notice forms have been submitted when they
have not been.
An example of a values and behaviour checklist for employees is included in the table below.
Similar checklists can be developed for managers who are assessed by their team members. A
manager and employee may agree that only some of the behaviours are important to the role,
and these are earmarked for monitoring and assessment for a period of time.

Table 3: An example of a set of values and behaviours for employees.

Company
Behaviours
value

1 Takes personal responsibility for all actions

2 Keeps projects and tasks well-organised

3 Modifies behaviour to suit particular situations

Self-reliant 4 Shows personal leadership in working with others

Benefits from constructive criticism without being

5
defensive

6 Shares knowledge willingly with others by coaching

7 Delivers quality and complete work

Shows appreciation and concern for quality control

Quality 8
and safety
products and
services 9 Meets deadlines on time and to specification

Responds quickly to requests from customers and

10
others

11 Seeks continual self-development

Shows
12 Takes initiative to improve things
innovation and
initiative Looks for creative or innovative solutions to
13
problems

Builds and generously rewards teamwork and

14
cooperation

Treats customers, both internal and external, as the

Team player 15
most valuable asset

Shows a cooperative “pitch in” attitude with

16
colleagues and clients

2.3 Agreeing on development plans to support performance

A development plan is discussed, agreed on, and documented to support the employee’s
achievement in their role, and also in supporting goal achievement. Only some goals will require
a development plan. Importantly, development plans should be reviewed as part of performance
reviews; this is often done during both the mid-year and the annual reviews.

A well-structured development plan should include a clear description of the knowledge and
skills that require development as well as the way in which development is planned. Some
examples of ways to develop knowledge and skills include the learning activities of coaching, job
rotation, job shadowing, online research and training workshops. The format and components
that make up development plans will be covered in detail in Module 8 (Facilitating Training and
Development).

Note:
The StarTool resource titled “Learning Opportunities for Personal Development” is useful for
development planning. Access the resource in the module downloads.

2.4 The Five Conversations Framework

The Five Conversations Framework includes five themed conversations a human resource
manager should have with their employees. The framework is designed to address one theme per
month for five months; therefore, each topic is covered twice in a year. This iterative review allows
for an employee’s development to be tracked with ease.

The conversations should typically be 15 minutes long and focus on one of the following themes
related to employee development:

 Climate review: To measure job satisfaction and morale.

 Strengths and talents:To identify and develop innate abilities.

 Opportunities for growth:To improve performance and standards.

 Learning and development:To identify and support future learning opportunities.

 Innovation and continuous improvement: To improve own and team effectiveness in

line with business needs.

(Mindtools, n.d)

Explore further:
The Five Conversations Framework is a development planning tool often used to replace
traditional performance review systems. Learn more about the Five Conversations
Framework and the various elements that comprise it by reading the article written by Tim Baker.

It is important for everyone in your organisation to follow the same conversation topic over each
time period. If the climate review conversation is scheduled in January, all managers and
supervisors across the organisation will have this conversation one-on-one with their team
members. This will provide a clear picture of the climate within your organisation.

Additionally, you can create your own themes and schedules to better suit your organisation’s
needs.

3. Methods for appraising performance

Once roles and goals have been defined and decided, behaviours have been highlighted, and
development plans have been set, the focus of the performance management process shifts to
implementing and measuring employees’ performance.

3.1 Performance criteria

There are generally four types of performance criteria (where the fourth type combines the other
three in various ways) that are applied to measure employees’ performance:

1. Trait-based criteria: This focuses on the personal characteristics of employees rather

than on what they achieve in the job. Examples of traits are tenacity, empathy, client-
centrism, and communication skills. These criteria have lost popularity because they are
regarded as being too subjective and susceptible to challenges and disputes.

2. Behaviour-based criteria: This focuses on specific behaviours that are important to

achieve success in the role and goals, and employees are rated on whether they exhibit
these behaviours. Examples of desired behaviours for a sales executive could be, “builds
relationships with clients by identifying clients’ needs” and “promotes products and
related services to clients to achieve sales targets by product”.

3. Results or outcome-based criteria: This focuses on what is produced or achieved rather

than on the way in which it was done. Too much focus on results could lead to
behavioural issues, such as teamwork and quality being ignored.

4. Combination performance criteria: The trend in performance management today is to

combine the different kinds of performance criteria. For example, to achieve results in the
role and reach agreed goals, results-based criteria can be combined with behaviour-
based criteria, so that employees are focused on both what they need to do and achieve,
and how they need to go about achieving it.

3.2 Performance measurements

The methods chosen to measure performance in an organisation are important decisions when
designing and implementing a performance management system. This is because they will clearly
shape the focus and behaviours of employees. Performance is traditionally measured in two
ways:

1. Comparative methods: Employees are rated or ranked against each other.

2. Objective methods: Employees are rated against a rating scale, defined goals or
behaviours.

Objective methods are the more popular method used in business today. The graphic rating scale
rates the employee on some standard or outcome (for example, role and goal achievement,
sometimes combined with work-related behaviours). The rating is often done on a 1 to 3 or the 1
to 5 Likert-type scale, with 1 representing ”poor” and 5 representing “excellent”. The rating scale
method is still used extensively in performance appraisals, although there is a tendency to
describe performance in terms of descriptions rather than by numbers.

Four methods of measuring performance that will be described are:

1. The graphic rating scale;

2. The critical incident checklist;

3. The ranking method; and

4. The behavioural method.

3.2.1 The graphic rating scale

An example of a five-point (Likert-type) graphic performance rating scale that evaluates an

employee’s performance against the agreed role and goals is included in the table below. The
rating levels focus on performance descriptors to emphasise the overall quality of the employee’s
performance. Graphic rating scales are among the most common tools used in the performance
appraisal process. These typically contain a number of traits and characteristics, competencies or
behaviours.

Table 4: A five-point graphic rating scale.

Performance Degree job Performance descriptors

level requirements met
The descriptions below serve as a guide to assess
performance against both the agreed-upon key
responsibilities and goals. The five descriptions
provide guidelines for the judgement that needs
to be made on an appropriate assessment
description that most accurately reflects an
 employee’s performance.

1 – Below Seldom met  Unacceptable level of performance that

average is clearly below the minimum
performance requirements of the role.

 Goals only sometimes met. Avoids

taking responsibility and seldom willing
to work without close, day-to-day
supervision.

 Set a performance improvement plan

and review performance progress
regularly, i.e. daily, weekly, or monthly.

2 – Average Usually met  Acceptable level of performance and

performance narrowly meets the minimum
requirements of the role. Room for
performance improvement.

 Goals usually met to the minimum

standards required.

 Generally willing to take on some

responsibility.

 Set a performance development plan

and review performance progress
regularly, i.e. fortnightly or monthly.

3 – Good Mostly met  Meets requirements of the role and

performance occasionally exceeds expectations. All
goals achieved to the degree required.

 Readily accepts responsibility and sets

own priorities, but still requires some
guidance. Some room for performance
enhancement by development.

4 – Very good All met, some  Consistently meets and regularly

performance exceeded exceeds the standards expected for the
role and goals.

 Very good level of performance beyond

the role requirements.
  Self-motivated, innovative, creative. Can
always be relied on to set own priorities,
work independently, and achieve highly.

5 – Excellent Exceeded  Consistently exceeds the standards

performance expected for the role and goals.

 Distinguished or exceptional level of

performance, significantly beyond the
requirements of the job.

 Highly self-motivated, innovative,

creative. Seen as a role model and team
player with exceptional self-
management and leadership qualities;
seen by others as an outstanding
achiever.

3.2.2 The critical incident checklist

Critical incidents are one of the so-called narrative methods used to make the appraisal process
more job related than other methods. Several employees and managers generally compile a list
of actual job experiences involving particularly outstanding behaviours or performances and
particularly poor behaviours or performances. Normal and average work performance standards
are not included. The critical incidents method of performance appraisal is based on managers
spending time during the year observing and gathering behavioural data on their employees
while looking extra carefully for those critical incidents. Excellent performance separates the best
performers from the average performers; below-average performers are separated from the
average performers.

Managers are required to keep a record of critical incidents throughout the year that illustrate
excellent performance and below-average performance. At the end of the appraisal year, the
managers can identify who performed well and who did not. Employees whose performance is
not noted or recorded at all are presumed to be in the average category of performance.

The advantage of this method is that it is job-specific with incidents and dates included in the
appraisal. The disadvantages are that it is time-consuming to keep a complete and accurate
record of all employees’ performance, and it is challenging to compare employees against each
other.

3.2.3 The ranking method

Another appraisal method is to rank employees from most effective to least effective, against
each other rather than against an absolute standard, as is the case with rating scales.
The advantage of ranking is that it is relatively quick and easy to complete. Employees can be
recognised and rewarded according to their relative ranking. However, there are serious
disadvantages. For example, ranking is seldom developmental because employees do not receive
feedback about performance strengths and weaknesses or any future direction. Another
disadvantage is that there is no common standard of employees’ performance across
departments. Some systems begin by asking managers to rank their employees and then ask
them to rate their performance using another method to overcome the problems with ranking
already mentioned, for example, by using a graphic rating scale or a behavioural checklist.

3.2.4 The behavioural method

When using the behavioural approach to performance appraisal, the appraiser can make use of a
series of vertical scales, one for each important dimension of job performance. Critical incidents
(worst and best examples of performance) are described and listed on either end of the scale
(enumerated as 1 and 5). It is then relatively easy to rate performance against a specific
dimension as being either towards the good side (5) or the bad side (1), or in the middle (3), and
to what extent from the mid-point (2 or 4).

3.3 Common rating errors

Rating errors are factors that mislead or bias managers in the appraisal process. As a manager, if
you have not set clearly defined roles and goals for employees in the appraisal period, or have
not discussed and agreed on desirable behaviours that should be lived in day-to-day work
activities, you are more susceptible to rating errors. The following rating errors can affect one’s
judgement when rating performance:

 Central tendency: Clustering everyone in the central performance categories to avoid

extremes of good or bad performance. This may prevent some confrontations or
disagreements, but it is unfair to employees who are really making an effort and
achieving results significantly above the average. Also, poor performers may be getting
away with tardy work standards, which serve to demotivate the team.

 Favouritism: Overlooking the flaws or low performance standards of favoured

employees, especially those employees whom everyone likes.

 Grouping: Excusing below-standard performance because it is generally widespread and

inaccurately rating many employees as average.

 Guilt by association or holding a grudge: Rating someone based on the company they
keep, or on a past incident, rather than on the quality of the work they do.

 The halo effect: Allowing one positive work factor that impresses you to affect your
overall assessment of performance.
  The horns effect: The opposite of the halo effect – allowing one negative work factor or
behaviour you particularly dislike to unfairly affect your opinion of other factors.

 Bias: Allowing your biases to influence the rating. Bias can come from a variety of
sources, for example, racial or national prejudices, genders, religion, age, disability,
weight, height, and so-called intelligence, among others.

 Recency: Being unduly affected by only recent performance, albeit good or bad. Data
should be representative of the entire review period rather than by one or two
memorable incidents. A manager needs to keep an ongoing record of events to be able
to accurately describe performance over an entire performance period.

 The sunshine effect: Rating everyone in the team highly, regardless of actual
performance, to make yourself look good as the team leader, or to be able to give higher
compensation to employees.

These and other rating errors can cause the entire performance review programme to lose
credibility among employees. Therefore, more than one person must be involved in this process.

3.4 Who can perform employee ratings?

Traditionally, only one person assesses the performance of an employee; that is, the supervisor is
the person responsible for appraising their employees. Multiple assessors are now used in many
organisations as part of the design of their performance management systems. Self-assessment is
widely practised, as are peer reviews to a lesser extent. Upward rating (employees rate the
performance of their manager against a set of behaviours) is more unusual. However, this is an
effective way to create some parity in the performance management system.

3.4.1 The role of the supervisor or immediate manager

The immediate manager of the employee is in the best position to define the performance
promise and therefore to ultimately assess the employee’s performance against the agreed role,
goals and behaviours. The manager should also engage the employee in self-appraisal as part of
the assessment process, and involve any other people who are impacted by the performance of
the employee, such as internal and external clients.

3.4.2 Peer evaluations

A functional team will usually be able to evaluate the objective performance of the team and
undertake peer assessments. Experience shows that team members can accurately assess their
colleagues, particularly where the team player behaviours are clearly defined upfront, and where
the manager is closely involved in the team’s work and is a part of the peer assessment process.
Teams that have a competitive culture may find it difficult to objectively assess the team
members because there are other factors in the agenda, for example, the rivalry for promotion
and limelight. The successful introduction of 360-degree evaluation is a complex issue and is
covered in a later section.

3.4.3 Client evaluations

If an employee provides a service to an internal or external client, it makes sense as the recipient
of the service that they are involved in the assessment of the employee’s performance whenever
possible. This can be done in a variety of ways, for example, through client surveys, client
comment cards, and electronic questionnaires. A client’s evaluation is only one part of an
employee’s total performance evaluation, so the manager’s assessment remains relevant.

Customer reaction or evaluation is also being sought in business today in non-service roles, such
as manufacturing and distribution. Employees receive general feedback from clients regarding
the quality of their products and services that can then be incorporated in improvement or
enhancement plans for the team.

3.4.4 720-degree assessment

An interesting approach to assessment is the introduction of 720-degree assessment, which is in

addition to receiving feedback from the direct manager, internal and external clients, peers and
others. The employee gets extended feedback from family, friends, and partners to identify
patterns of performance regardless of the sphere in which they occur. The recent trend of
focusing on employee wellness and mental health can be assessed through a 720-degree
performance assessment.

4. Holding interactive discussions

Effective interpersonal interactions are at the core of any performance management system and
process. There is the opportunity to engage teams and employees at the start, during and at the
end of the performance management process. Providing effective feedback is essential to keep
plans and performance on track.

Take a look at the following video, which provides some useful tips on great feedback and
mistakes to avoid when giving feedback in the workplace.

Video 1: The secret to giving great feedback.

(Source: https://www.youtube.com/watch?v=wtl5UrrgU8c).

4.1 General guidelines for effective feedback

The following guidelines relate to managing effective performance feedback:

 Provide specific and targeted feedback: The manager should emphasise the positives
and provide detailed feedback (ways to sustain and improve performance). Suggestions
should come from both parties on how performance can be maintained and enhanced.
Managers should also suggest ways of developing skills.
  Emphasise strengths and discuss performance problems: Focusing on performance
strengths reinforces performance-enhancing behaviour. This, in turn, increases employee
engagement and promotes a stronger identification with their work. Identifying
performance problems must be accurate and concrete. Specific suggestions on how to
perform better should be provided, and managers should always monitor performance
and provide regular informal feedback.

 Clarify performance expectations: Managers will achieve a much greater employee

performance return by investing sufficient time in ensuring that employees clearly
understand their performance expectations.

Explore further:
Various research concludes that emphasising an employee’s strengths and clarifying performance
expectations can increase their performance by over 30%. According to a global survey by Gallup,
as many as 50% of workers say that they do not really know what is expected of them in their
jobs. Learn more about the importance of setting expectations for employees to improve
employee productivity and the overall performance of a business.

4.2 Holding a performance review session

The following guidelines are useful for the manager and employee when preparing for a
performance review session:

 Evaluate the employee’s performance against agreed role and goals: Refer to the role
and key responsibilities, and evaluate how well the employee has done against
expectations. Then refer to the goals that were set and assess the employee’s
performance against these. Draft your evaluation comments in writing. Be direct and
honest about what they achieved and when it was achieved, as measured against the
original agreement. The employee should undertake self-assessment in tandem with the
manager’s assessment.

 Make a note of any special circumstances: Note any factors that may have affected the
employee’s performance, such as ill-health, environmental factors beyond their control,
personal crises, and business changes, which need to be considered. However, do not use
these as an excuse for failing to confront inadequate performance.

 Review progress made against development plans: Refer to the development plans
agreed on during the earlier goal-setting session and evaluate what progress has been
made. Draft comments and consider any changes.
The purpose of the performance review meeting is to discuss progress, give and receive feedback
and update goals, if needed. It is not the time to decide on a performance rating. This is done at
the end of the performance appraisal period. The manager and the employee must be well
prepared for the progress review meeting. The following agenda could be followed for the review
meeting:

 Employee’s general self-evaluation: The employee begins by giving a general self-

evaluation of performance to date, against the agreed role and goals. The manager
should comment on this.

 Employee’s specific and detailed self-evaluation against goals: The employee gives a
thorough self-evaluation against the first goal, giving examples to illustrate their self-
assessment. The manager either agrees with the employee’s evaluation and reinforces
good performance, or disagrees with the assessment or aspects of it by giving specific,
unbiased examples to illustrate a different perception. This should be a two-way
discussion where assessments are shared openly and directly. The objective of this
process is to agree on an accurate and fair summary of the employee’s performance. Each
goal is discussed in turn.

 Manager records feedback: The manager should record feedback as the discussion
progresses. If the employee and the manager disagree on an issue after having discussed
it at length, the manager has the final say on what is finally recorded. The employee
should be offered the opportunity to record their concerns or disagreement if needed.

 Review of values and behaviours: Roles and goals focus on what is expected of the
employee. Behaviours focus attention on how the employee should behave while
achieving the goals. The discussion should revolve around specific examples of
behaviours that were observed while the employee was fulfilling the role and achieving
the goals.

 Progress made against development plan: The employee begins by saying what
progress has been made, relative to the agreed development plan. The manager then
comments on the employee’s statement and a discussion commences. Any required
changes to the development plan should be discussed, agreed on and recorded.

 The next progress review meeting: Finally, agree on and record a date for the next
progress review meeting.

4.3 Introducing 360-degree assessment feedback

Many of today’s performance management systems are designed to include feedback
mechanisms from a variety of sources; this is often referred to as a 360-degree assessment.
Sources have already been mentioned, that is, the direct manager, peers, internal and external
clients, suppliers, and others. All members of a department or organisation are encouraged to
give open and honest feedback to each other (including employee to manager feedback) against
an agreed set of behavioural criteria, as part of the 360-degree feedback process.

Watch the following video that discusses how 360-degree assessment feedback can be a useful
tool in providing motivational feedback.

Video 2: How to provide 360-degree feedback.

(Source: https://www.youtube.com/watch?v=aN0w8Sng1_w).

When introducing the process to both managers and employees in an organisation, the following
six-month to year-long process is suggested to establish trust between and among employees

Table 5: A suggested timeframe for a 360-degree feedback process.

Stage Time period

 Self-evaluation to serve as a benchmark. Immediately or as desired

Employees and managers decide privately
on the areas of their self-assessment
where improvement is needed.

 Employees assess the manager A month after the self-evaluation

anonymously. One employee collects the
forms from all staff and passes them to
the manager to ensure anonymity. The
manager summarises the feedback in a
non-defensive way and commits to the
group of employees to take action to
improve on any low ratings and maximise
high ratings.

 All employees and the manager give and Two months after manager
receive feedback from each other evaluation
anonymously. Employees should keep the
results of the feedback confidential and
privately identify what needs to be
improved.

 All staff members and the manager give Two months after private general
and receive feedback from each other, peer review
and the results are shared with the
manager in a private, one-on-one setting.
 The staff member and manager agree on
actions to take to improve the staff
member’s performance based on the
feedback received. The manager shares
the feedback they received from staff
members.

 All employees and the manager give and Two months after the second
receive feedback from each other, with peer review
the results being shared with team
members in a controlled, open forum.
Employees share their assessment results
and commit to taking specific actions to
improve. Little or no cross-questioning by
team members is allowed at this stage.

 All employees and the manager give and Two months after the third peer
receive feedback from each other, with review
results being shared with team members
in an open forum. Employees share their
assessment results and commit to taking
specific actions to improve. Team
members also suggest actions to improve.

 Employees receive and give feedback to Two months after the fourth peer
one another in an open review, including review
feedback from other departments or
organisations that depend on the
employee doing their work effectively.

4.4 Supporting performance improvement

An essential part of any performance management process is to support performance

improvement when an employee is not meeting the required standards or expected results. The
manager should begin by coaching the employee on their performance using a performance
improvement coaching framework (like the example included in Table 6). You may need to hold
several coaching sessions before the performance improves. Be sure to keep a record of all
interventions or meetings. An email confirming the summary of the action plan and follow-up
date is a good way to keep track and create a record of dated actions and agreements.

Table 6: An example of a checklist for a performance improvement coaching session.

Stage Steps
Open the discussion and set
the scene
Discuss and agree on the
standards of performance
required
Agree on the standard
currently being achieved by
the staff member
Agree on an action plan
Monitor the results of the
action plan and follow up
 Choose an appropriate time (it may be
immediately).
 Choose a neutral venue at which to meet.
 Point out the specific area that needs
improvement.
 Ask the staff member for, or state, the
performance standards required of the task.
 Ensure the standards are fully understood and
agreed (preferably written down) before giving
feedback on the staff member’s performance.
 Ask the staff member to tell you how they
currently do the task, how well they do it, and
which areas may be causing problems.
 Give your views on the staff member’s current
performance. Use constructive criticism and
give specific examples of poor performance.
Resolve any disagreements in a non-defensive
way.
 Ask the staff member to suggest solutions to
improve performance and give your reaction to
these suggestions.
 If needed, offer your own solution(s) and ask
the staff member for their reaction.
 Summarise what has been agreed upon to
improve performance; for example, to re-coach,
allow more time, or try a different approach.
 Take agreed-upon action to improve the staff
member’s performance.
 Monitor and follow up after action has been
taken to evaluate progress. The time period for
review should be within two weeks, Decide on
any next steps or changes to the action plan.
If performance does not improve after three or four performance coaching sessions, it is probably
the right time to take more serious action. Consult your Human Resources support person if you
feel it necessary to take further action.

5. Assessing performance management implementation

The following general assessment of how well performance management is being implemented
in an organisation is a useful way to assess progress and identify areas requiring more attention
or improvement. The manager and team members are required to evaluate the circumstances in
the team, as measured against the seven performance management practices. A rating scale of 1
to 5 is used, with 1 being a definite “No” and 5 a definite “Yes”. The manager and individual team
members can complete the assessment from their perspectives, and the results can be analysed
and discussed for improvement planning. An overall average rating of 28+ would indicate the
effective implementation of performance management in an organisation.

Table 7: A template for assessing performance management practices.

No ? Yes
Assessment of performance management
practices
1 2 3 4 5

1. All employees have an agreed-upon and up-

to-date performance promise with a clearly-
stated role (key responsibilities) and
measurable goals, which is completed early in
the financial year.

2. All employees are aware of their contributions

to the company’s strategic objectives and
team goals, and focus their efforts on
supporting these.

3. All employees have an agreed-upon and

documented personal development plan to
help them perform effectively in their role and
achieve their goals.

4. Employees regularly receive informal feedback

on their performance as measured against
their role, goals, and the company values
(over and above any formal annual or
biannual review process).

5. Employees are encouraged to evaluate their

 performance rather than solely relying on
feedback from their managers or others.

6. Any poor performance problems are

managed quickly, fairly, and supportively.

7. Employees believe that their performance is

recognised and rewarded accordingly in
relation to what they have measurably
achieved.

6. Conclusion

Trends in performance management systems and processes have recently undergone some
radical changes and shifts in emphases. Rather than performance management being a series of
events scheduled throughout the business year, many companies now see performance
management as an ongoing process that actually defines how all work gets done. Some
companies have removed the awkward performance rating process and replaced it with some
simpler yes or no questions.

The role of HR is to provide managers and employees in an organisation with the tools and
processes to effectively manage performance and development. Managers and employees
decide how to best make use of the available tools. HR no longer needs to play the policing role
to ensure that performance management is being implemented. Managers are accountable for
the performance of their staff and can decide on how they want to achieve this.

Contemporary performance management should be seen as an ongoing and continual process

rather than a series of scheduled events.

Please note: Additional information on performance management can be found in the

comprehensive StarTools included in the module downloads section of this module.

7. Bibliography
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http://hr.blr.com/HR-news/Performance-Termination/Performance-Employee-Appraisal/
zn-10-Rating-Errors-Avoid-in-Performance-Reviews.

Bersin. 2015. Performance management. Available: http://www.bersin.com/Practice/Subject.aspx?

s=Performance-Management.

Lloyd, K. 2015. Behind BARS: Evaluating employees with behaviourally anchored rating
scales. Available: http://www.dummies.com/how-to/content/behind-bars-evaluating-
employees-with-behaviorally.html.
Lloyd, K. 2015. Types of employee-performance rating systems. Available:
http://www.dummies.com/how-to/content/types-of-employeeperformance-rating-
systems.html.

Lumese, 2015. Performance management: Building the business case. Available:

http://www.lumesse.nl/media/983470/lumesse_insightpaper_performancemanagement_bui
ldingbusinesscase_enuk.pdf.

MindTools. n.d. The Five Conversations Framework: An alternative to appraisals. Available:

https://www.mindtools.com/pages/article/the-five-conversations-framework.htm [2020,
August 26].

Wärnich, S., Carrell, M.R., Elbert, N.F. & Hatfield, R.D. 2018. Human resource management in South
Africa. Rev. 6thed. Pretoria: South-Western Cengage Learning.

Wilter, J. 2013. StarTools: People management tools, tips and templates. Randburg: Knowledge
Resources Publishing.

Zietlow, J., Hankin, J., Seidner, A. & O'Brien, T. 2019. Financial Management for Nonprofit
Organizations: Policies and Practices. New Jersey: John Wiley & Sons, Inc.

Informal performance management takes place when an employee needs positive or constructive feedback, not
necessarily at regularly scheduled intervals as in the case of formal evaluation

However, there is growing consensus among business leaders that a customised performance management
system that aligns with an organisation's strategic goals and culture can lead to improved employee engagement,
productivity, and business outcomes. A tailored performance management system can help identify individual
strengths and development areas, align employee goals with organisational objectives, and support ongoing
employee growth and development.

a customised performance management system can help build a positive organisational culture by fostering trust
and accountability, promoting employee recognition and rewards, and enabling regular communication and
feedback between managers and employees. As a result, employees are more likely to feel valued and motivated
to perform at their best, which can lead to increased job satisfaction, retention, and overall business success.

Formal advantages

Structure: It aids in the development of a formal structure of communication between the supervisor and the
employee. It also encourages the development of solutions to improve employee performance.

Annual Planning: The performance management system assists in making concrete decisions about hiring,
training and development practices, and goal setting.

Feedback: It allows employees to receive feedback on their performance in the organization in order to improve
it further.

Motivation: Data from the performance management system can be used to create a comprehensive
compensation strategy for motivating employees to improve their performance.
Disadvantages

Negative Experiences: If performance management system data is not authentic, employees may have a negative
experience. As a result, managers must keep a close eye on obtaining accurate and fair performance appraisal
data.

Time-consuming: When there are a large number of employees, a performance appraisal system can be time-
consuming.

Natural Biases: When managers are biased, fair data may not be generated, resulting in errors in final ratings.

A customized performance management system can contribute to the development of a positive organizational
culture by encouraging trust and accountability, promoting employee recognition and rewards, and facilitating
regular communication and feedback between managers and employees. Employees are more likely to feel
valued and motivated to do their best as a result, which can lead to increased job satisfaction, retention, and
overall business success.
Informal check-ins are a great way for managers to learn about their employees' goals and set expectations in a
less formal setting. Employees are much more willing to discuss problems or opportunities when their managers
engage them outside of formal assessments. If the proper performance management tools are in place, the team
will exceed the manager's expectations.

The disadvantages of informal evaluation include employees comparing themselves to their peers in an
unhelpful manner, which reduces teamwork. Employees may experience stress as a result of a highly critical
performance review, especially if they are concerned about their job security.

Formal performance evaluation aids in the development of a formal structure of communication between the
supervisor and the employee. It also encourages the development of solutions to improve employee
performance. This evaluation also allows employees to receive feedback on their performance in the
organization in order to improve it further.

Possible disadvantages ,formalities can be time-consuming, when there are a large number of employees, a
performance appraisal system can be time-consuming. If performance management system data is not authentic,
employees may have a negative experience. As a result, managers must keep a close eye on obtaining accurate
and fair performance appraisal data. When managers are biased, fair data may not be generated, resulting in
errors in final ratings.

Employee motivation is created by performance management; one theory of motivation is Expectancy, which
states that employee satisfaction is driven by expectations of what an organization will offer in return.
Woolworth's Holdings maintains remuneration policies with the goal of attracting and retaining the best talent,
ensuring that they are congruent with the company's strategies, and that they are the determinants of
performance during the short and long phases. The policy takes into account both the board members and the
employees. This policy manages the company's employees by providing

References

Formal and informal performance management – get the best out of your team (2023) Welcome. Available at:
https://www.surgehrsolutions.com/2018/08/24/formal-and-informal-performance-management-get-the-
best-out-of-your-team/

Kelly, L. (no date) Performance reviews vs continuous feedback: Pros and cons, PeopleGoal. Available at:
https://www.peoplegoal.com/blog/performance-reviews

Valamis (2023) Performance management: Best practices and examples, Valamis. Valamis. Available at:
https://www.valamis.com/hub/performance-management