HRM3706
EXAM
PREPARATION
NOTES
,PERFORMANCE MANAGEMENT (HRM3706)
WORKBOOK 1: Performance Management in the context
THE SHIFT FROM PERFORMANCE ASSESSMENT TO PERFORMANCE MANAGEMENT
MANAGEMENT
Performance assessment has a long history based on comparative judgements of human worth.
Modern performance assessment developed from sophisticated rating systems designed by
work psychologists for military use during the two world wars. Performance assessment was
initially used for promotions, salary increases, and discipline. Fletcher and Williams (1992:5-8)
provide an overview of the development of performance management. They trace the origins of
performance management as far back as the First World War, focusing on the period since the
1950s, a decade that involved personality-based appraisal. The focus then was on evaluating
performance, but with no intension of improving it.
Fletcher and Williams (1992) further observe that, in the 1960s, appraisal practices shifted to a
greater emphasis on goal-setting and assessment of performance-related abilities (and more
recently, competencies) rather than personalities. The late 1980s and the whole of the 1990s
saw organisations undergo a process of rapid and successive change. Almost inevitably, what
Fletcher and Williams (1992) call “performance appraisal” became a central mechanism in a
more holistic approach towards managing people and business in general.
According to Mello (2015:438), the terms “performance evaluation” and “performance appraisal”
imply a one-sided judgemental approach to performance management, where employees have
limited involvement in the process. Traditional performance appraisal simply involves evaluative
supervisory comments on the past performance of employees.
According to Houldsworth and Jirasinghe (2006:6–7), things shifted again in the 1990s, when
performance management began to be seen as more of a core management process, growing
out of its “appraisal” box, and developing into an integrated, strategic and grown-up concept.
Compiled by T Mudyano _ MCom, BCom Hons, BCom HRM, Certificate in HR Hiring (UNISA) _ 078 717
3916 _ Email: proftmudyano.hrm@gmail.com
,Performance Management refers to the continuous process of identifying, measuring and
developing the performance of individuals and teams, and aligning performance with the
strategic goals of the organization.
This definition is thus composed of 2 main components:
Continuous Process: Performance Management is an ongoing. It involves a never
ending process of setting goals and objectives, observing performance and receiving
ongoing coaching and feedback. Once the end of the process is reached it starts all over
again.
Alignment with Strategic goals: Performance management requires managers to ensure
that employees’ activities and output are congruent with the organisation’s goals and
consequently help the organisation gain competitive advantage. Performance therefore
creates a direct link between employee performance and organisational goals and makes
the employee’s contribution to the organisation explicit. Performance management
systems that do not make explicit the employee’s contribution to the organisational goals
are not true performance management systems.
Performance Management is characterized with the following qualities:
Performance management is an ongoing process.
Organisational goals should be linked with individuals’ goals.
Performance should be monitored and reviewed, and feedback provided.
Employee development is crucial to ensure improvement in employee performance.
PERFORMANCE MANAGEMENT WITHIN AN INTEGRATED HUMAN RESOURCE
MANAGEMENT (HRM) SYSTEM
According to Werner, Schuler and Jackson (2012:290), performance management activities
should be aligned with the organisation’s internal environment, the external environment and
other HR activities. The internal environment refers to the organisation’s business strategy, the
company culture and technology. The external environment includes laws and regulations, the
labour market and the country culture. Other HR activities refer to performance-based
incentives and employee development.
Compiled by T Mudyano _ MCom, BCom Hons, BCom HRM, Certificate in HR Hiring (UNISA) _ 078 717
3916 _ Email: proftmudyano.hrm@gmail.com
, The internal environment
Performance management activities can only be effective if they are aligned with the
organisation’s business strategy and the company culture in the internal environment. Managers
should translate the objectives of the organisation’s business strategy into specific behaviours
and goals for their employees. When a company’s culture depends on effective performance
management, it can be described as a performance-driven culture. Companies with
performance-driven cultures share a common focus on monitoring and improving performance.
Technology also plays an increasingly important role in performance-driven cultures by making
it possible for employees to receive detailed information about their behaviour and performance,
which can then be used in their performance development.
Question: How can organisations ensure that their performance management activities in the
internal environment are effective?
Answer:
For performance management activities to be effective, employees’ activities and output should
be congruent with the organisation’s goals
The external environment
Three key issues in the external environment influence performance management, namely the
legal environment, the labour market and the country culture.
The laws and regulations in the legal environment serve as the basic principles to ensure the
legality of performance management practices. These principles are similar to those for
selection practices. These laws and regulations protect employees against negative
consequences in the workplace caused by unfair discrimination and the use of inappropriate
information when making employment decisions.
The labour market refers to the geographical area from which employers recruit their employees
for particular jobs. Companies must compete for employees and sometimes seek them
domestically, in global markets, or both. The characteristics of the labour market are unique and
always changing.
Compiled by T Mudyano _ MCom, BCom Hons, BCom HRM, Certificate in HR Hiring (UNISA) _ 078 717
3916 _ Email: proftmudyano.hrm@gmail.com
