INTRODUCTION

Background of the Study

Gold Mine PLC is a prominent mining company specializing in gold extraction and
exploration. With a strong presence in the global mining industry, the company has
consistently delivered impressive results and contributed significantly to the gold production
sector. While no existing strategic plan document is available, official reports and industry
analysis provide valuable insights into the organization's current position and future
prospects.

The organizations have increasingly recognized the potential for their people to be a source of
competitive advantage.

In today’s competitive and rapidly changing business world, organizations especially in the
service industry needs to ensure maximum utilization of their resources to their own
advantage; a necessity for organizational survival. Studies have shown that organizations can
create and sustain competitive position through management of non-substitutable, rare,
valuable, and inimitable internal resources (Barney, 1991).

Human resource management (HRM) policies related to selection, training, development,

performance appraisal, compensation, promotion, incentives, work design, participation,
involvement, communication, and employment security should be developed and
implemented by HRM specialists in collaboration with line managers. These policies aim to
achieve outcomes such as competence, cooperation with management, employee cooperation,
motivation, commitment, satisfaction, retention, and presence. To ensure business survival,
HRM must be recognized as a crucial function within any organization, rather than being
solely entrusted to line managers who lack the expertise and capacity to handle the extensive
responsibilities of a human resource manager.

Formal performance management systems serve to enhance human capabilities. These

systems involve activities such as employee monitoring, evaluating recruitment and training
methods, and endorsing human resource management practices. The complexity of
performance appraisal arises from the various metrics devised by managers to assess
outcomes in diverse contexts. Additionally, performance appraisal is recognized for its direct
impact on job satisfaction and employee motivation. (Ahmad. R, & Ali. NZ, 2004).
Thus, it becomes a big challenge for the human resource professionals to provide better
motivating techniques for good performance.

In today’s business landscape, nearly every organization—whether public or private—needs a

system to evaluate employee performance. Factors such as managerial insights, skills,
standards, commitment, and performance appraisals can significantly impact an employee’s
effectiveness. (Ikram, M, et. al; 2011). In the nineteenth century, Taylor’s approach
predominantly involved a performance appraisal system, and merit rating was developed
through a close system to justify employee wages and performance. In practice, employee
performance appraisal systems are used by managers to enhance human potential and
maximize benefits. Performance appraisal serves as an instrument for effectively overseeing
employee performance. Research indicates that performance appraisal frameworks establish a
connection between additional compensation and rewarding competent employees, thereby
enhancing motivation and overall contributions (Giangreco et al., 2012).

A performance appraisal can be viewed as a systematic description of an individual’s job-

related strengths and weaknesses, used to inform decisions about that individual (Ahmad &
Bujang, 2013). However, it’s important to recognize that evaluation frameworks may heavily
rely on critical measures that are not always suitable or reasonable, particularly from the
perspective of the employee whose performance is being assessed. (Jan, et.al, 2014).

The literature revealed that performance appraisals are a practice to measure how individual
employees are acting and how they can enhance their performance in the organization
(Mohammad, M et.al, 2012). Motivation or commitment is the technique which is commonly
used for capacity building. Motivation is a determined power that leads and coordinated a
man toward some particular goals (Iskandar, et al., 2013). Performance management guides
and persuades employees to expand their endeavors for the benefit of the organization to
meet its key destinations.

Performance Management system (PMS) is the procedure that clearly includes certification
and support of the employees inside the organization and that decides the outcomes, across
the norms that are set by the organization (Neelam, et al., 2013). The performance evaluation
system can upgrade advantages through effective motivation and avoided the suspicions in
the present system (Shahzadi, J, et al., 2014).
Literature Review

The Concept of Human Resource Management (HRM)

The concept of Human Resource Management was first defined by Bakke (1966) who said
that the general type of activity in any function of management is to use resources effectively
for an organizational objective. The function which is related to the understanding,
maintenance, development, effective employment and integration of the potential in the
resource of „people‟ I shall call simply the human resources function. However, HRM
emerged fully fledged later when the Michigan „matching model‟ (Fombrun et al, 1984) and
what (Boxall 1992) calls the Harvard framework developed by Beer et al (1984) made
statements on the HRM concept revealing the need to take HRM beyond just selection and
compensation to broader issues that demand more comprehensive and more strategic
perspective to an organization’s human resources. The matching model of HRM held that HR
systems and the organization structure should be managed in a way that is congruent with
organizational strategy and further explained that there is a human resource cycle that
consists of four generic processes or functions that are performed in all organizations;
selection, appraisal, rewards and development. The Harvard framework is based on their
belief the problems of historical personnel can only be solved when general managers
develop a viewpoint of how they wish to see employees involved in and developed by the
enterprise and of what HRM policies and practices may achieve those goals. Without either a
central philosophy or a strategic vision which can be provided only by general managers-
HRM is likely to remain a set of independent activities, each guided by its own practice
tradition. This called for the need to have a long-term perspective in managing people and
consideration of people as potential assets rather than merely a variable cost. As Armstrong
(1987) puts it„ HRM is regarded by some personnel managers as just a set of initials or old
wine in new bottles. It could indeed be no more and no less than another name for personnel
management, but as usually perceived, at least it has the virtue of emphasizing the virtue of
treating people as a key resource, the management of which is the direct concern of top
management as part of the strategic planning processes of the enterprise. Although there is
nothing new in the idea, insufficient attention has been paid to it in many organizations‟.

Definition of Human Resource Management

Though the term HRM is widespread; the definition of the term has remained varied and
elusive. Story (1995) therefore defines HRM as: “A distinctive approach to employment
management which seeks to achieve competitive advantage through the strategic deployment
of highly committed and capable workforce, using an integrated array of cultural, structural
and personnel technique” The term Human Resource Management (HRM) is a strategic,
integrated and coherent approach to the employment, development and well-being of the
people working in organizations. To Boxall et al, (2007), it is the management of work and
people towards desired ends. Som, (2008) described HRM as carefully designed
combinations of such practices geared towards improving organizational effectiveness and
hence better performance outcomes.

Imperfect imitability is the third pillar of sustainable competitive advantage that can be drawn
from employees in an organisation. This in other words means that HR processes need to be
developed in such a way that they are too complex for competitors to imitate.

It therefore follows that value, uniqueness and inimitability are argued to enhance HRM
efficiency (Armstrong & Sweeney, 1994; Guest, 1997). In a Midroc gold plc context, this
means that HRM practices with these three characteristics have a positive impact on the
quantity and quality of employees, their deployment in the organisation and the attrition rate.
The mining industry in Midroc gold would harness the rewards associated with the
committed human resources they have at their disposal by deploying them in ways that
maximise returns on the firm guarantee that the employees are committed to the
organisations. This high-commitment model of responsiveness toward employees is similar to
Guest‘s (1987) well-known soft‘ model of HRM, which sees employees as valued assets
because of their commitment, adaptability and high quality (of skills, performance and so on).
The watchwords in such a model are investment and value added, rather than exploitation and
cost minimization (Legge, 1998)

Theories and Perspectives of Human Resource Management

There are several theories underpinning the practice of HRM. Two of these theories;
Resource-based View and Ability and Motivation and Opportunity theories appear to be the
most popular theoretical frameworks applied in the studies that link HRM and organizational
performance. The Resource-Based View (RBV) theory which blends concepts from
organizational economics (Penrose, 1959) and strategic management (Barney, 1991) has it
that HRM delivers added value through the strategic development of the organization’s rare,
valuable, imperfect to imitate and hard to substitute human resources. The RBV establishes
that competitive advantage no more lies in natural resources, technology or economies of
scale, since these are easy to imitate but rather competitive advantage is dependent on the
valuable, rare and costly and hard-to-imitate resources that reside with the human resources
of an organization. HRM‟s role is to ensure that the organization’s human resources meet
those criteria. The Ability, Motivation and Opportunity (AMO) theory also argues that the
formula; Performance = Ability + Motivation + Opportunity to participate provides the basis
for developing HR systems that attend to employees‟ interests, namely their skill
requirements, motivations and the quality of their job. (Appelbaum et al, 2000; Bailey et al,
2001; Boxall and Purcell, 2003) HRM practices therefore impact on individual performance
leading to overall organizational performance if they encourage discretionary efforts, develop
skills and provide with the opportunity to perform. Adding to the array of concepts and
theories is the term Human Capital which was originated by Schultz (1961). Human capital is
the stock of competencies, knowledge, experience, social and personal attributes including
creativity and innovation, embodied in the ability to perform work so as to produce economic
value. Dess & Picken, (1999) assert human capital is generally understood to consist of the
individual’s capabilities, knowledge, skills and experience of the company’s employees and
managers, as they are relevant to the task at hand, as well as the capacity to add to this
reservoir of knowledge, skills and experience through individual learning. This theory is
concerned with how people contribute their knowledge, skills and abilities to enhancing
organizational capability and the significance of that contribution. This is rather broader in
scope than human resources.

HRM practices refer to organizational activities directed at managing the pool of human
resources and ensuring that the resources are employed towards the fulfilment of
organizational goals (Schuler & Jackson, 1987; Schuler & MacMillan, 1984; Wright & Snell,
1991). It was observed that majority of studies define HRM in terms of human resource
practices or systems or bundles of practices. Divergent

views exist on the nature of HRM. Several studies define HRM in terms of individual
practices (Batt, 2002) or systems or bundles of practices (Capelli and Neumark, 2001). There
appears to be no one fixed list of generally applicable HR practices or systems of practices
that define human resource management. The question of how HRM impacts on
organizational performance has ignited three perspectives. The universalistic perspective
(Boxall and Purcell, 2008) projects a bundle of high performance „best practices‟ that should
be adopted by organizations to yield organizational performance. this implies that business
strategies and HRM policies are mutually independent in determining organizational
performance (Katou and Budwar, 2007) The contingency perspective proposes that in order
to be effective, an organization’s HR policies must be consistent with other aspects of the
organization. Rather than adopting best practices, a fit must exist between HRM and
business strategy. (Schuler and Jackson, 1987; Dany et al, 2008) This is also described as
„vertical fit‟. Boxall and Purcell (2003) argue that both perspectives; best practice and best fit
might be right in each in their own way. However, the actual design of HR practice depends
to some extent on the unique organizational context. The third which takes the contingency
perspective a step further is the configurationally perspective (Ulrich and Brockbank, 2005).

This has a holistic approach that emphasizes the importance of the pattern of HR practices
and is concerned with how this pattern of independent variables is related to the dependent
variable of organizational performance. Configuration has been defined by Huczynski and
Buchanan (2007) as „the structures, processes, relationships and boundaries through which an
organization operates‟. All perspectives are relevant in exploring the linkage between HRM
and performance. Delery and Doty (1996) examined the relationship between HR practices
and profitability in a sample of banks in the US. They found that, in general, HR practices
were positively related to profitability, in testing universalistic, contingency and
configurationally approaches to HRM. Human resource management as a concept has
frequently been described with two distinct forms; soft and hard. The soft model whilst
stressing the importance of integrating HR policies with business objectives; emphasizes
on treating employees as valued assets and a source of competitive advantage through their
commitment, adaptability and high quality skill and performance. Employees are proactive
than passive inputs into productive processes, capable of development, worthy of trust and
collaboration which is achieved through participation (Legge, 1995). this model in contrast to
the hard model places emphasis on “human” and is associated with the human relations
school of Herberg and McGregor (Storey,1987). The hard HRM model focuses on the
qualitative, calculative and business-strategic aspects of managing the “headcount” has been
termed human asset accounting (Storey, 1987). The hard HRM approach has some affinity
with scientific management as people are reduced to passive objects that are not cherished as
a whole but assessed on whether they possess the skills or attributes the organization
requires Legge, 1995; Vaughan, 1994; Storey, 1987; Drucker et al, 1996; Keenoy,
1990).
Human Resource Management Function

Many researchers over the period have identified different HRM practices by different names.
Researchers variously refer to certain sets of HRM practices as “best practices” or „high
performance‟ (Huselid, 1995) „sophisticated‟ (Golhar and Deshpande, 1997; Hornsby and
Kuratko, 1990; Goss et al., 1994; Wagner, 1998) or as “professional” (Gnan and Songini,
2003; Matlay, 1999). Pfeffer (1994; 1998) argued the most appropriate term is „Best HRM
practices‟. However, according to Chandler and McEvoy (2000) one of the lingering
questions in HRM research is whether or not there exists a single set of policies or practices
that represents a universally superior approach to managing people. Theories on best
practices suggest that universally, certain HRM practices either separately or in combination
yield improved organizational performance. A number of lists of best practices‟ have been
produced; Guest (1999) drew up the following list.

 Selection and the careful use of selection tests to identify those with potential to make
contribution.
 Training, and in particular a recognition that training is an ongoing activity.
 Job design to ensure flexibility, commitment and motivation, including steps to ensure
that employees have the responsibility and autonomy fully to use their knowledge and
skills.
 Communication to ensure that a two-way process keeps everyone fully informed.
 Employee share ownership programs to increase employees‟ awareness of the
implications of their actions on the financial performance of the firm. Redman and
Mathews (1998) in a study also identified an HRM bundle of key practices that
support services organizations;
 Careful recruitment and selection, for example, „total quality recruitment‟, „zero
defects recruitment‟, „right first-time recruitment‟.
 Training and learning
 Extensive remuneration systems for example bonuses for staff willing to be multi
skilled.
 Team working and flexible job design
 Employee involvement
 Performance appraisal with links to contingent reward systems. The framework of
HRM practices which was developed by Saxena and Tiwari (2009) through
Discussion

performance management system

A performance management system monitors the performance of employees in a consistent

and measurable manner, and the system should be able to ensure that employees in the
company are aligned with the strategic objectives of the organization.

The nature of the performance management system

Goal setting,

performance evaluation,

recognition and feedback support

Performance management system manual, in order to maintain the consistency of the

strategic leadership given by the canter to the organizations under the Midroc Gold mine plc,
this manual sets a system that guides the preparation, support, monitoring and evaluation of
the strategic plan and operational (annual) plan, as well as recognition and encouragement for
the results achieved, so that a clear and continuous performance management system prevails
at the organization level. It has the overall purpose of enabling.

Objectives of Performance Appraisal in Midroc gold mining plc

 Establish a system to measure performance and give feedback

o Measuring performance at a company-wide level
o Identify the limitations of the assessment
o Giving feedback to fill in the limitations
 Installation of incentive or compensation system
o Measuring results objectively;
o Distinguishing those who have achieved high and outstanding results
o Installation of ventilation system
 To make the general view of the leader and the employee linked to the results of the
institution
o Follow modern management practices
o View options that consider changing conditions
 o Ensuring continuous growth in the institution

Performance Appraisal …. (why?)

Because the incentive given for good performance motivates for further better results

It is also appropriate to take corrective action for low performance

Performance evaluation

o Because the evaluation of the result will be seen in terms of achieving the goal held
by the organization
It is appropriate to make the evaluation of all involved parties related to the results
obtained at the organizational level.
o A result at the enterprise level
A supervisor and employee at every level are considered as part of the performance
appraisal calculation.
o A breakdown of the score for each step is provided below

Organizational assessment at Midroc gold mine plc

o Evaluation of financial/profitability goals (55%)

o Productivity Goals (30%)
o Goals that ensure the continuity and growth of the organization (15%)

Financial/profitability goals

When measuring the efficiency of the company, it is appropriate to measure the return of
the investment invested by the investor. It is mainly related to profitability and it is to give
results by measuring what the organization has done in terms of planning in the fiscal
year. It carries 55% weightage of the overall corporate performance rating.

Performance against financial goals will be measured in detail by the following criteria:

Return on Assets (ROA (PBT/TA)) ………………...10%

Return on Capital (ROE (PBT/Equity)) … …………5%

Profit Performance (Profit Before Tax) ……………...40%

At the enterprise level, the percentage of performance against the three financial goal
criteria will be adjusted accordingly for each weighting.

Productivity goals

One of the issues that enable the organization to be competitive in the market is the
increase in productivity, so the criteria related to this are used to evaluate the performance
of the organization.

In terms of productivity, the organization gives results by evaluating what it has done in
terms of planning in the fiscal year. Performance against productivity measurement goals
will be weighted 30% of the overall performance rating of the organization.

Performance against productivity benchmark goals (30%) will be measured against the
following detailed criteria:

Capacity utilization (of design capacity) ……...…... 8%

Sales Performance ................................................... 7%

Asset turnover (Net sales/TA) ……………………...5%

Cash management- Acid test ratio (current asset-inventory- prepaid/current liability) …

5%

Depending on the nature of the organization, by-product, defect, waste, rework, claim,
quality level, leakage rate etc... 5%

Goals that ensure the continuity and growth of the organization

As the implementation of expansion and new projects at the corporate level is crucial to
the continuity and growth of the company, it will give results by measuring the goals
achieved in the fiscal year according to the plan.

As the company can be competitive in the market when it can increase the number of
customers by attracting customers, increasing the number of customers is included as one
of the criteria.
 In addition, organizations should follow procedures that can ensure the continuity of the
organization by increasing their interaction and social participation with the local
community.

It will carry 15% weightage of the overall performance of the organization.

Detailed criteria and their weight are given below.

Implementation of expansion and new projects ………. 6%

Acquisition of new customers 5% increase in number of customers

In terms of fulfilling corporate social responsibility ……….4%

Departmental performance appraisal

Since the contribution of management to the effectiveness of the organization is high and
important, it is possible to measure the leadership in the organization.

One by including the actual results obtained at the organizational level and the
achievement of the goals held by the department

It is also necessary to consider the results of the quality of leadership, knowledge and
skills in the field, the coordination of the employees at the bottom and the efforts to
achieve a single goal, bringing about a comprehensive change in the organization, the
ethics, the relationship and interaction with the group, management members, employees
and other parties.

Accordingly, the evaluation of the management members who are accountable to the
manager and at the department level will be conducted as follows: -

o Organizational Assessment Score of Total Performance Criteria ... 50%

o Evaluation of results based on the department's main function and goal of plan
execution....50%

Individual performance evaluation

To evaluate the performance of the individual It is necessary to have a detailed plan based on
the goals of the organization, which extends to the individual employee, not only the work
that is planned at the level of the organization.
The evaluation of individual performance involves giving weighted results from the manager
to the lower employee, and the evaluation process at each level is discussed below.

General manager evaluation

80% -- holds the results of the organization's assessment

10% -- Deputy S/executive in terms of leadership

According to the standards set assessment

10% -- Deputy General Manager and Chief

The manager who is responsible for the manager evaluation of members

Deputy General Manager Evaluation

It accounts for 80% of the company's evaluation results

10% evaluation by the organization's CEO based on the criteria set in terms of leadership;

10% evaluation of the managing members who are accountable to the Deputy General
Manager

Evaluation of officials at the level of department manager

 70% of the department's evaluation result, that is, according to the method mentioned.
o 35% of the company's evaluation results and
o Consists of 35% of departmental assessment results;

 15% will be evaluated according to the leadership criteria set by the responsible
M/CEO/CEO according to the structure of the organization;

 10% in the evaluation of the managers and employees who are accountable to the
department manager;
 5% by performance evaluation by other management members

Appraisal of supervisors, foremen and similar level officials

Holds 60% of the results of the performance appraisal in their position of responsibility;
30% of the performance of the department to which he is responsible, that is, according to
No. 8.3.2. According to the said procedure

15% of the company's assessment results and

15% consists of departmental assessment results;

10 % immediate supervisor evaluation

Employee personal assessment

70% of the employee's work plan or performance evaluation results against the standard;

15% of the performance of the department that is responsible, that is, according to No.
According to the said procedure

7.5% of the company's evaluation results and

7.5% of the departmental assessment results;

15 % evaluation of the immediate supervisor

Inclusion will be weighted based on the score out of 100.

Implementation of incentives
Based on the results of the company's performance, based on the performance evaluation
results of management and employees at all levels, incentives will be given to motivate and
encourage them to do better work.

The incentive payment is made based on the results of the organization and the individual's
performance, and the incentive payment will be based on the results obtained based on the
calculation of individual performance.

Therefore, employee incentive payment will be given as a percentage of the individual's

performance evaluation result.
Conclusions

The motivated and committed human capital is a determinant resource, for the company to
succeed in delivering high quality product and service. Thus, securing and retaining highly
motivated and well-trained staff is necessary. In view of this the company has formulated
policies like; Personnel Administration policy manual, management staff policy manual,
Performance evaluation manual as well as new salary scale and job grade and various
benefit package directives to motivate and retain the high performing employees.

recommendations

The company didn’t yet conduct employee’s satisfaction survey to assess the impact of these
policies on the employees‟ motivation. Furthermore, competency matrix which assist to
know the available knowledge and the gap is not exercised. Since the competency matrix
could be the base to identify the knowledge gap between the job holding senior management
staff or senior professional and a prospected successor.

References