Employee attitudes to the performance-management system of a consulting engineering company.

The aim of this study is to determine the attitude of employees towards the performance management system in the company Kantey &. A quantitative study was conducted to gain a holistic understanding of employee attitudes toward a performance management system.

Introduction

Motivation for the study

Kantey & Templer would like to know the attitudes of their employees towards the performance management system. The research question that arises is: What are the attitudes of employees towards the performance management system at Kantey & Templer, an engineering consulting company.

Research objectives

Despite the changes in the business environment, there has been little or no research on employee attitudes that hinder the successful implementation and effectiveness of performance management systems, especially in the South African context. In 2011, Kantey & Templer implemented a performance management system across all their offices in South Africa.

Theoretical approach

Limitations of the study

Summary

Introduction

Definition of performance management

Brudan (2010) further describes performance management as an overarching process concerned with evaluating performance results and ensuring that performance objectives are continuously achieved; it includes strategic goal setting, implementation, training and performance measurement. Performance management is often confused with performance appraisal by many managers and business leaders (Markus, 2008).

Role of performance management in organisations

An employee performance improvement plan is a performance management plan designed to encourage constructive discussion between subordinates and their superiors to clarify work performance that needs improvement (Hough et al., 2011). If incentives and/or rewards are tied to the performance outcome, which ensures an objective, fair and impartial performance management process, employee satisfaction improves and then they do not feel cheated (Swanepoel et al., 2003).

Evolution of performance management

12 Traditionally, performance management in an organizational setting has been divided into three silos, i.e. strategic, operational and individual. Performance management systems have become powerful tools that have brought about change in organizational culture and ethos (Furnham, 2004, Brudan, 2010).

Theories of performance management

Organisational-Environment Theory
Contingency theory
Goal-setting theory
Agency theory

Organizational environment theory supports a systemic approach to organizational management at the strategic performance management level. The implications of performance management in an organization are extremely important because they are key drivers of organizational success.

Implementation of performance management

Planning
Developing
Performance
Review

Designing a performance management system involves identifying performance requirements in terms of objectives, actions and behaviours. The planning phase of a performance management system must address the fundamental question of where the company wants to be in the future.

Performance-management tools

Management by Objectives (MBO)
Performance Appraisals

Performance Appraisal System Implementation
Maintaining the Performance Appraisal System

Performance 360° Feedback Appraisals
Balanced Score Card

It is recommended that an audit and assessment of the effectiveness of the performance appraisal system be carried out annually (Swanepoel et al., 2003). Briefly, the perspectives answer the question: "What are the organizational key areas on which we would focus in order to achieve the mission and its strategic goals?" The BSC complements traditional financial measures with measures to measure performance from the other three perspectives: customers, internal business processes and learning and growth (Valmohammadi and Servati, 2011).

Challenges of performance management

Performance-management design flaws

27 The BSC model's ability to handle change and related revisions of performance indicators hampers the effectiveness of the BSC approach (Hough et al., 2011). Performance management can be used for administrative and developmental purposes”, and according to Swanepoel et al. 2003), the two goals are in direct conflict with each other.

Lack of credibility

The administrative objectives focus on evaluating past performance to help business leaders make decisions about a differential award of salary increases, promotions, etc. Comparison of employees from a ranking procedure, which is in some order of merit based on their performance, gives a feedback process is difficult, and provides limited information for identifying performance deficits, and most importantly, how to address deficits in terms of training and addressing development interventions (Swanepoel et al., 2003).

Employee attitudes towards performance management

There is a lack of consistency in performance evaluations: different evaluators rate employees differently, which calls into question the credibility of the performance management process. The consistent absence of the elements mentioned by many organizations has created negative attitudes towards performance management.

Summary

Horns effect (the opposite of the halo effect) This is a rating error in which a rater gives an employee a poor rating on one performance element, and then uses that rating to negatively affect the overall performance rating of other elements. This is a rating error made when a rater consistently gives an employee a very low rating. Leniency Error This is an error in judgment where an evaluator is too lenient and gives a high performance rating.

Introduction

Research question

Objectives of the study

Methods of data collection

36 There were well-known facts about employee attitudes towards performance management in other organizations. However, performance management at Kantey & Templer was newly implemented and therefore secondary data was not available. On the other hand, Gelo et al. 2008) described the qualitative approach as one that does not involve numerical values for data collection.

Source of data: sample design

Ideally, the characteristics of the sample should correspond to the larger population of interest; therefore, the results of the sample can be generalized to the population (Gelo et al., 2008). The purpose of the study was to obtain information and understanding of properties or characteristics of the sample. The stratified random sampling is one of the sampling methods under the probability sampling group.

Sample-size selection

The unrestricted or random sampling would pose a risk of biasing the results from the unbalanced representation of the different strata in the sample. Sampling design and sample size are both equally important to ensure that the sample results can be generalized to the population of interest. External validity threats address the question of the generalizability of the test results to the population of interest.

Sample demarcation

Internal validity threats include experimental procedures, behaviors, and experiences of participants that prevent the researcher from drawing correct interpretations from the data in an experiment (Ihantola and Kihn, 2011). A statistical inference threat occurs when experimenters draw inaccurate interpretations due to the violation of statistical test assumptions used for the data collected. He also excluded himself from participation and withheld his personal experiences with and opinions about the performance management system.

Research tool for data-collection

Constructing the questionnaire

Distributing the questionnaire

The content of the follow-up emails reminding participants to complete the questionnaire was checked by the researcher's supervisor, ensuring that the emails would not be interpreted as unfair behaviour. The purpose of the research study was discussed in advance with senior management and the HR department. Respondents were informed of the purpose of the study and told that it was expressly for academic purposes.

Ethical conditions

Data collected from respondents was treated as strictly confidential even for senior management or directors of the organization. None of the employees, including the sample participants, knew the identities of those selected for the sample. The sample of respondents selected to participate in the survey were requested to participate fully by answering and completing the research questionnaire; and.

Summary

The researcher ensured that, as far as was reasonably practicable, the company's management or any other party did not influence or attempt to influence the participants' responses. As a research instrument for data collection, a structured questionnaire was designed 47 based on the topics defined in the research question and objectives. The next chapter will be devoted to the presentation of the research findings and the discussion of the results.

Introduction

Description of the sample

Biographical details of the sample

49 of behavior, that is, biographical data provides high predictive levels of employee behavior; it increases the validity and accuracy of the results analysis (Egan, 2000).

Analysis of the objectives

Objective 1: Establish the importance of having a performance-management

Benefits of performance management

The responses to the question showed that the majority of respondents understood what the performance management system aims to achieve, and what benefits were expected from its implementation (Table 4.3). This was interpreted as a positive indicator that the majority of employees realized the importance and benefits of the performance management system. The results indicated that employees believed that the performance management system improved employee performance in addressing performance gaps.

Objective 2: Establish employee attitude towards the performance-management

Impression of the performance reviews
Belief in performance management at Kantey & Templer
Company's commitment to performance management
Company's lack of commitment to performance management
Appraisal of performance management system at Kantey & Templer
Suggested actions which would improve the performance management

It is clear from figure 4.2 that the majority of the responses gave a fair impression of the performance management reviews. The results indicated that employee expectations were consistent with the requirements of the performance management processes. 58 It is clear from Table 4.7 that the majority of respondents believed that the performance management system was working, but it needed some improvement.

Figure 4.2: Impression of the performance reviews

Objective 3: Ascertain whether the performance-management system is working

Who was involved in your performance review?
How relevant was the performance review to your job description?
Was your performance measured against the factors agreed upon with your line
What was your performance measured against?
How relevant to your job description were the performance-assessment criteria
What do you think affected the outcome of your performance review?

Simmons (2008) emphasized that managers or appraisers must be trained in order to implement performance management processes effectively and competently. This was cause for concern, as such factors are the main sources of employee mistrust and lack of confidence in the performance management system. It will help the company to understand the areas of concern and where to improve the implementation of the performance management system.

Figure 4.3: Performance assessments evaluators

Objective 5: Establish the improvements which must be made to the performance-

To what extent are line managers involved in managing employees’ performance?
Which elements do you think should be eliminated in order to improve the

These opinions tend to be biased, making employees reluctant to accept the implementation of performance management systems. 68 The results presented in Figure 4.9 show the poor involvement of managers in the implementation of the performance management system. Figure 4.10 shows that the majority of respondents were not sure about the reasons for the lack of commitment of managers to the implementation of the performance management system.

Figure 4.10: Reasons for the lack of managers’ involvement

Objective 6: Determine what must be done to promote employee engagement

What encourages you to participate?
What discourages you from participating?

72 The results in Figure 4.12 showed that a greater number of respondents were encouraged to participate in the performance review in order to assess their performance and provide training where required, thereby improving their performance. 73 Referring to the results in Figure 4.12, 76% of respondents indicated that they were encouraged to participate in performance reviews, evaluating their performance and providing training where required, to improve their performance; and 10%. Derived from the financial benefit findings, it shows that as much as the majority of respondents were interested in participating in performance reviews, having their performance appraised and receiving training where required to improve their performance, however, they still expected some rewards for their performance.

Figure 4.13: Elements discouraging to participating in performance reviews

Miscellaneous Findings

Data Analysis: Cross-Tabulation

Null Hypothesis: There is a relationship between the age of respondents and the factors that encourage them to participate in performance management reviews. Null Hypothesis: There is a relationship between respondents' seniority in the company and how they rated the performance management system. It is evident that the majority of employees (66%) positively evaluate the performance management system, but it needs to be improved.

Table 4.10: Cross-tabulation of performance-management implementation and work departments

Summary

Introduction

Discussion of key findings and conclusions

Purpose and benefits of performance management
Attitude towards the performance-management system

Performance review outcomes
Employees’ impression of the performance reviews
Employees’ belief in the performance-management system
Kantey & Templer’s commitment to Performance Management
Kantey & Templer’s lack of commitment to Performance Management

Assessing the effectiveness of the performance-management system

Management’s involvement in performance reviews
Relevancy of performance reviews to job description
Agreement on performance measurements

Determine the reasons for ineffectiveness of the performance-management
Establishing improvements required for the performance-management system

Managers involvement in managing employees’ performance
Element to be eliminated so as to improve the performance-management system
Elements discouraging employees from participating in performance reviews

We can conclude that the implementation of the performance management system did not meet the expectations of the majority. The results showed that 28% of the respondents believed that the implementation of cyclical performance reviews is evidence of the company's commitment to the performance management system. The majority of respondents (65%) indicated that most of the performance measures used during performance reviews were agreed upon with their managers.

Limitations of the study

As mentioned, the study focused on the implementation of the performance management system and its processes; it did not focus on establishing performance measurement criteria that would link performance measurement results to performance rewards; and. The study also did not focus on the performance management aspect related to handling or managing poor performance and implementing punitive or corrective measures.

Recommendations

Purpose and benefits of performance management
Employees’ belief in performance management
Kantey & Templer’s commitment to Performance Management
Relevancy of performance reviews to job description
Managers involvement in managing employees’ performance
Elements to be eliminated so as to improve the performance-management system;

93 The respondents pointed to several elements that indicate the company's commitment to the implementation of the performance management system. They will need to adhere to the requirements of the performance management cycle to ensure that the results of performance appraisals are implemented to improve employees. The results indicated that more than two-thirds of the respondents believed that eliminating the elements of subjectivity and favoritism/bias would improve employee attitudes toward the performance management system.

Recommendations for future studies

Employees can then accept it as an inclusive performance management system that is implemented for improving employee performance and thereby achieving better results for the company.

Conclusion

Do you believe that Kantey & Templer is fully committed to implementing the performance management system. Which element do you think should be removed to improve the performance management system at Kantey & Templer. Do you have anything else you would like to add regarding the performance management system at Kantey & Templer.

Summary of the research chapters

Human errors, pitfalls and weakness to performance management

Sample proportion

Biological details of the sample

Purpose of performance management

Benefits of performance management

Belief in performance management at Kantey & Templer

Company’s commitment to performance management

Company’s lack of commitment to performance management

Appraisal of performance management at Kantey & Templer

Suggested actions to improve performance management …

Miscellaneous findings