Abstract
Orientation: The implementation of the performance management system (PMS) within a specific North-West provincial government department appears to be ineffective.
Research purpose: To measure employees’ perceived effectiveness of the PMS.
Motivation for the study: Employees’ experiences of employee PMSs may be different from that which it intends. The motivation for this study was to quantify employees’ perceptions of PMS effectiveness.
Research approach/design and method: The researchers used a quantitative research approach and collected data using self-administered e-mail questionnaires on a total population of 247 employees at a North-West provincial government department.
Main findings: Utilising two measurement constructs, namely, performance management accuracy and fairness, the study revealed that employees perceived the PMS as effective. However, some deficiencies were identified. The major shortcomings related to the lack of coaching provided and manager’s non-compliance with procedural, distributive and procedural justice principles. The overall mean score of the perceived accuracy was slightly above the midpoint of the range, indicating that employees perceived PMS as accurate, and were generally satisfied with the implementation of the system. However, employees perceived the PMS as unfair.
Practical/managerial implications: A perception of effective and accurate PMS does not translate into perceptions of fairness. When employees feel unfairly treated during the appraisal system, morale and performance are likely to be adversely affected. Coaching and/or training related to PMS remains imperative.
Contribution/value-add: This study contributes to the body of knowledge by quantifying the perceptions of employees regarding the factors that determine the effectiveness of PMS, namely, accuracy and fairness. It contributes towards the theory and practice regarding employees’ perceived effectiveness of the PMS.
Keywords: accuracy; fairness; feedback and coaching; justice; performance appraisal; performance management system; performance management effectiveness; performance planning; outcomes.
Introduction
This article reported on a study conducted on employees’ perceived effectiveness of the performance management system (PMS) at a North-West provincial government department. The effectiveness of the PMS is determined by employees’ perceived accuracy and fairness of the system. Therefore, research regarding the effectiveness from the perspective of employees is critical.
There seemed to be limited research on PMS effectiveness. Sharma, Sharma and Agarwal (2016) conducted a study in the Indian context to measure employees’ perceived effectiveness of the PMS, while Dewettinck and Van Dijk (2013) conducted a study in the Netherlands on PMS effectiveness in a public sector institution. Haines and St-Onge (2012) researched PMS effectiveness in both public and private organisations in Canada. In the South African context, Ramulumisi, Schultz and Jordaan (2015) measured the effectiveness of the PMS in a government department, while Makhubela, Botha and Swanepoel (2016) did a similar study in a public sector institution. The limitations of these studies were that the scales developed to measure the effectiveness of the PMS did not extensively cover all the phases of the PMS. From an academic perspective, this article provides a theoretical framework and practical validated instrument that measures employees’ perceived effectiveness of the PMS in the public sector context.
The core research problem investigated was that employees perceived the PMS as ineffective. The objectives were to measure employees’ perceived PMS effectiveness; establish whether there are differences in the perceived PMS effectiveness between gender, age groups and positional levels; establish whether there is an association between the perceived accuracy and fairness of the PMS; and propose remedial interventions to address the identified gaps. Based on the research objectives, the following research questions were formulated: (1) What are employees’ perceptions of PMS effectiveness? (2) Are there differences in employees’ perceptions of the PMS between gender, age groups and post levels? (3) Is there a correlation between PMS accuracy (PMSA) and fairness? This study was conducted among 247 employees at a North-West provincial government department.
The following sections include the literature review, the research approach, followed by the results and discussion. Limitations, recommendations and the conclusion follow this.
Literature review
According to Armstrong (2009), performance management was established in the late 1980s in response to negative aspects of merit rating and management by objectives. Armstrong (2009) suggested that the strength of performance management lies in its continuous, integrated performance approach. Rantanen, Kulmala, Lönnqvist and Kujansivu (2007) concluded that performance management systems were established as a means through which large organisations could support their strategic management functions. Performance management is intended to increase people’s ability to come up to and go beyond expectations and to realise their potential to the full, to their own benefit and that of the organisation with four primary purposes, namely strategic communication, relationship building, employee development and employee evaluation (Armstrong, 2006). Armstrong (2009, p. 1) described performance management as a system consisting of interlocking elements designed to achieve high performance and stated that this system encompasses processes of planning, goal-setting, monitoring, feedback, performance assessment, reviewing, coaching and dealing with under-performance. Bacal (2003, p. viii) held a different view, stating that performance management is a continuous process of communication, engaged in between an employee in partnership with his or her supervisor. It entails the stating of expectations that are clear and job functions that are fully understood, how an employee contributes towards organisational goals, measurement, barriers that hinder performance and how the employee and the supervisor will work together to improve performance.
Tyson (2006) argued that a critically important task in people management is to ensure that employees become effective in their jobs. Employees harbour needs of motivation regarding development and recognition, status and achievement. These needs can and should be satisfied using work satisfaction and performance achievement. Slavić, Berber and Leković (2013) defined performance measurement as a quantifying process, a process that measures both the efficiency and the effectiveness of what is performed. It is also a comparison of results against expectations that have been agreed upon, with the aim of guiding, motivating and improving decision-making. Selden and Sowa (2011) noted the critical starting point of explaining the process through which individual employee performance will be managed. Furthermore, the process also begins at the top of the organisation. Demartini (2014) described performance management as a set of mechanisms. These mechanisms are both formal and informal processes as well as systems and networks that organisations put to use to convey crucial objectives and goals required by management for assisting the strategic process and ongoing management by planning, analysis, control, measurement, reward and management of performance. Performance appraisals, as one performance management practice, are often regarded as irreconcilable with quality management principles (Haines, St-Onge, & Marcoux, 2004), although an appropriately designed system of performance management could assist in maintaining quality (Haines et al., 2004). Thomas and Lazarova (2014) postulated that the PMS has both evaluative and developmental components as part of its goal. Rees and Smith (2014) reiterated the importance of establishing performance targets, a system of measuring performance and a clear linkage of performance results to rewards. Haines and St-Onge (2012) viewed performance management as a means through which strategic initiatives and the management of the development of the workforce are implemented. However, a poorly implemented PMS results in unfavourable outcomes, such as job dissatisfaction, employee burnout, increased turnover and damaged relationships (Smither & London, 2009).
Goal-setting theory (Maitland & Gervis, 2010) formed the theoretical foundation of performance management. Goal-setting theory, grounded in Locke and Latham (1990), advocated that conscious goals and intentions govern individual actions and performance. This theory emphasises the importance of goal specificity (Latham, Brcic, & Steinhauer, 2017). Yearta, Maitlis and Briner (1995) defined goal-setting as a broadly used motivational technique to improve performance (Maitland & Gervis, 2010) by affecting the performance through the arousal, direction and intensity of behaviour (Bipp & Kleingeld, 2011). Fried and Slowik (2004) asserted that goal-setting theory suggests that the expectancy, instrumentality and valence of outcomes will be high if goals are challenging, specific and attainable. Goal effects are moderated by commitment to goals, confidence in one’s own abilities, complexity of tasks, feedback on performance as well as consistent and timely feedback (Bipp & Kleingeld, 2011; Latham, 2016; Locke & Latham, 2002, 2006; Motel & Motel, 2016; Scobbie, Wyke & Dixon, 2009). Furthermore, challenging goals cause people to work longer on a task (Fried & Slowik, 2004).
The PMS used in the public service is referred to as the employee performance and development system. For this article, the PMS and the employee performance and development system were used synonymously. The employee performance management and development system (EPMDS) was developed by the South African Department of Public Service and Administration (DPSA) with the aim of managing employee performance through training, development and reward systems. The DPSA developed EPMDS to guide public institutions in implementing employee performance and development (DPSA, 2007). The Public Service Regulation 2001 was also developed to provide a framework that ensures the use of EPMDS to govern the performance and development of public service employees. In 1997, the government of the Republic of South Africa instituted a White Paper on HRM in the public arena to act as a guiding principle for the implementation of performance management of civil servants (White Paper on HRM in the Public Service, 1997). The Public Service Human Resource Development Strategic Framework Vision 2015 was drawn up to act as a palliative in respect of public service performance gaps. The main purpose of this framework is to improve public service capacity through skills development to ensure service delivery to all South Africans (Public Service Commission, 2010). The success of this depends mainly on the efficiency and effectiveness with which public servants carry out their duties (White Paper on HRM in the Public Service, 1997). Managing performance is, therefore, a critical HRM tool to ensure that employees know what they are expected to do; managers know whether employee performance is delivering what is required; a performance that is unsatisfactory is recognised and subsequently improved; and performance that is satisfactory and outstanding is singled out and rewarded.
The PMS is a cycle consisting of various steps that start with a clarification of expectations. This first step must ensure that employees clearly comprehend what the objective entails and what is necessary to effect the measure associated with the objective. After that, performance facilitation, performance monitoring, providing feedback, coaching and support follow. Finally, good performance is acknowledged (Viedge, 2017). According to Rowley and Jackson (2011), the process starts as employees place their individual goals in line with the organisational goals, identify core competency improvements and key result areas, agree with the supervisor on the actions needed to accomplish the objectives and together lay out a personal development plan. Kirkpatrick (2006) stated that performance reviews are key to the process, as are extended discussions related to past performance and future performance plans between employee and manager (Stredwick, 2005). Performance appraisals are formal and systematic processes to review and provide oral and/or written feedback on employee performance (Selden & Sowa, 2011). Improving employee performance remains a crucial part of the ongoing performance management process (Armstrong, 2006). Then follows reward and recognition, which Rowley and Jackson (2011) defined as a systematic process that is used to link performance targets with rewards through, for example, merit pay, commission or incentive pay bonus. Employees with a high performance are rewarded and, equally, poor performers should be corrected (Amos, Ristow, Ristow, & Pearse, 2012). The performance management cycle in the public service covers 12 months, starting 01 April and ending on 31 March, with five stages, namely performance planning, performance review, performance assessment and appraisals, developing performance, reward and recognition.
The construct effectiveness of the PMS is measured by two factors, namely, accuracy and fairness. Vlãsceanu, Grünberg and Pârlea (2007) define effectiveness as a means to measure whether a system is successful in reaching particular goals. They asserted that there is a difference between effectiveness and efficiency. The latter is measured as the ability to achieve stated objectives with the barest minimum waste of materials or other assets. The perception of the effectiveness of the PMS by employees is measured by focusing on accuracy and fairness within the PMS context (Sharma et al., 2016). Performance management system effectiveness is determined by how employees perceive the accuracy and fairness of the system’s implementation (Luthra & Jain, 2012). Sharma et al. (2016) suggested that employee acceptance is a significant factor in the system of performance management.
The accuracy of the PMS is an indication of the perception of employees relating to PMS correctness through the alignment of employees with organisational goals. Further, that goal clarity, standards, skills and behaviours that are expected at various levels are aligned with business needs and goals. Performance evaluation is then measured against planned standards, correctly evaluated through regular feedback and employee development facilitation, to ensure that PMS outcomes are met (Sharma et al., 2016). Appraisal accuracy processes imply trustworthy information concerning the feedback source’s true intention of the real level of the recipient’s performance; feedback that is considered to be correct may be regarded as fair (Roberson & Stewart, 2006). Son and Park (2016) defined accuracy as employees’ perceptions about how their employers use information as evidence when PMS rules are implemented, taking into account the correctness, relevance and thoroughness of the information. Tsai and Wang (2013) argued that perceived appraisal accuracy has been shown to influence employees’ behaviour and performance and, in turn, organisational performance.
Within the context of this study, accuracy relates to the process of performance planning (Sharma et al., 2016), feedback and coaching (Mathis & Jackson, 2011), review (Tsai & Wang, 2013) and outcomes (Baird, Schoch, & Chen, 2012). Performance planning accuracy is the degree to which the employees perceived that the performance planning phase of PMS ensures the alignment of the employee’s performance goals (through relevant behaviours or skills) with the organisational goals (Sharma et al., 2016). The organisational policy requires immediate supervisors to first establish performance standards for each employee at the start of the appraisal period (Narcisse & Harcourt, 2008). These authors (Narcisse & Harcourt, 2008) argued that performance standards should be discussed with employees and revised when necessary; however, it is found that all of the participants whom they interviewed were concerned about not being given clear performance standards or objectives in advance. They furthermore concluded that supervisors take for granted that a job description will suffice for employees to know what is expected of them (Narcisse & Harcourt, 2008). Tsai and Wang (2013) argued that if employees are involved in the design of the PMS, it will help to create a sense of control over the whole system and this, in turn, may cultivate employees’ perceived appraisal accuracy.
Feedback and coaching accuracy is the extent to which employees perceive that the feedback and coaching phase of PMS ensures the alignment of the employee’s delivered performance with the planned performance through regular feedback and coaching (Sharma et al., 2016). Upon setting standards, supervisors ought to monitor the performance of the employee and provide continuous, constructive feedback over the appraisal period (Narcisse & Harcourt, 2008). Developing an individual’s potential is a critical role of feedback and coaching accuracy. In this role, the manager is a mentor rather than a judge. The emphasis is on identifying performance gaps, potentials and planning employees’ growth opportunities and direction (Mathis & Jackson, 2011). Mathis and Jackson (2011) reported that most employees have a strong need to know how well they are performing, making continuous employee feedback imperative. There should be minimal surprises during a performance review (Mathis & Jackson, 2011). Managers should handle daily performance problems when they arise and not allow them to pile up for longer periods, and then address them during the performance appraisal interview (Ibeogu & Ozturen, 2015).
Sharma et al. (2016) defined performance review accuracy as the degree to which the employee perceives that the annual performance review phase of PMS measures the alignment of the employee’s annual performance with the planned performance through an assessment of the employee’s performance against planned goals (behaviours or skills). Supervisors must assess each employee’s performance against the set performance standards (Narcisse & Harcourt, 2008). The authors further argued that employees should be given an opportunity to go through a completed appraisal before it can be discussed with the supervisor. Finally, when development gaps are identified, the supervisor must initiate appropriate action for performance improvement (Narcisse & Harcourt, 2008). A study conducted by Tsai and Wang (2013) showed that when organisations provide adequate and clear information and regular face-to-face communications regarding changes, employees become happy and feel that the PMS is fairer than when they are not provided with information. Selvarajan and Cloninger (2012) argued that improved interactions between employees and managers are attributed to frequent appraisals, leading to positive interactional fairness on the part of employees. Well-timed appraisals may be perceived as following appropriate procedures for providing feedback, as opposed to late feedback, which may be seen as procedurally unfair (Selvarajan & Cloninger, 2012).
Outcomes accuracy is defined by Sharma et al. (2016) as the extent to which the employee perceives that the PMS out-comes phase ensures that the performance-based rating, compensation, reward and/or recognition are tied to the employee’s annual performance review. Lawler (2003) found when there is a connection between the results of the PMS and the reward system, the performance appraisal system is perceived to be effective. This is consistent with Baird et al. (2012), whose findings suggested that when employees observe a linkage of performance and rewards, they are most likely to work towards the achievement of organisational objectives and goals.
Fairness is not necessarily a detailed version of the work outputs of employees. Rather, a common feeling of being treated like others are treated, and an explanation of decisions and rewards allocation. Collins and Mossholder (2014) found that fairness has a greater influence on employees deeply interested in their jobs than in the case of less devoted workers. Colquitt (2001) provided empirical confirmation that justice can be seen as consisting of four distinct, highly correlated factors: fairness of procedures (procedural), outcomes fairness (distributive, interpersonal treatment fairness or quality), interpersonal and explanation fairness (informational). Fairness is further understood against organisational justice theory, suggesting that the manner in which people are treated influences their judgement of fairness (Lau & Martin-Sardesai, 2012). Rowland and Hall (2012) stated that the fair treatment of employees is likely to foster loyalty. Priesemuth, Arnaud and Schminke (2013) indicated that when employees are treated unfairly, they will easily respond in angry, resentful and retaliatory ways. Knoll and Gill (2011) remarked that the employees’ faith in fairness is determined by the appraisal itself. This article focused on four components of organisational justice: procedural, distributive, interpersonal and informational justice.
Procedural justice is defined as a legal process of decision-making by which fair results are decided (Cho & Sai, 2012). Kerwin, Jordan and Turner (2015) asserted that procedural justice is determined by judgements of fairness about the decision-making process policies and procedures in organisations. Various authors found that procedural justice affects job satisfaction (e.g. Cho & Sai, 2012; Lau & Martin-Sardesay, 2012).
Distributive justice is a conceptualisation based on Adams’s (1963) equity theory. The suggestion was that consistent resource allocation among employees should be the order of the day based on the contribution ratio of each employee. Adams (1963) perceived reward allocation in line with performance inputs and comparisons with the social field of rewards with relevant referents, as justified. An employee compares job inputs and outcomes with those of others. An employee has a perception of it being an injustice if he or she has not been treated fairly (Kim & Andrew, 2013). Within a performance appraisal context, this dimension relates to the perceived fairness of performance ratings received by employees (Selvarajan & Cloninger, 2012). Distributive justice is based on employee judgements about the fairness of outcomes, the levels at which resources are distributed among parties (Caza, Caza, & Lind, 2011), and is decided on a perception of the outcome of fairness experienced (Kerwin et al., 2015).
Interpersonal justice is strengthened when employees are treated with dignity and respect and do not make remarks or comments that are improper during the implementation of procedures (Colquitt, Conlon, Wesson, & Porter, 2001). Kerwin et al. (2015) concluded that interpersonal justice indicates the degree to which decision-makers in the organisation treat employees with respect, dignity and courtesy. When employees’ performance ratings were lower than expected, their attitudes towards the results of the performance appraisals varied depending on the inter-personal treatment they received from the rater (Tsai & Wang, 2013).
Informational justice hinges on how much explanation is required about outcomes distribution and what ways are used to come to those decisions on the outcome (Kerwin et al., 2015). It refers to the extent to which virtual communities engage in sharing knowledge to justify the procedures they have put in place (Ellis, Reus, & Lamont, 2009). This also relates to the quality of communication between employees and supervisors (Suliman & Kathairi, 2012). Employees with a positive perception of information justice are more involved in the work at a physical, cognitive and behavioural level. They would rather exhibit greater motivation and commitment to their job overall, have a feeling of excitement and pride in what they do and look for novel ways of performing their work and would do extra things to do their work well (Gupta & Kumar, 2012).
Research method
Research approach
This study was conducted within the quantitative paradigm and a cross-sectional survey design was used. This design was used to gather primary data to achieve the research objectives. This kind of survey was used to answer what, when, where and how questions (Babbie, 2010). A quantitative survey design was followed by various other studies measuring the perceptions of employees regarding the effectiveness of the PMS (Dewettinck & Van Dijk, 2013; Haines & St-Onge, 2012; Makhubela et al., 2016; Ramulumisi et al., 2015; Sharma et al., 2016).
Participants
The population consisted of 247 employees from post levels 1–12 at the selected department. Participants were from various occupational groups, such as registry clerks, project coordinators, office assistants, legal officers, data capturers, supply chain management, land reform, assistant directors, deputy directors and directors. Given the small population, a census was performed. Of the 247 questionnaires, 212 were returned, with a high response rate of 85.82%.
Measuring instrument
Self-administered e-mail questionnaires were used for data gathering. Two factors were measured, namely performance management accuracy and fairness, and combined to determine the overall PMS effectiveness:
- The perceived PMSA was measured using the 11-item performance management accuracy survey developed by Sharma et al. (2016).
- The PMS fairness (PMSF) was measured using the 20-item survey developed by Colquitt (2001).
The performance management system accuracy questionnaire
The PMSA questionnaire consisted of 11 items grouped as follows: performance planning accuracy (two items), feedback and coaching accuracy (three items), performance review accuracy (three items) and outcomes accuracy (three items). A five-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree), was used to measure the respondents’ perceptions of the PMSA.
The performance management system fairness questionnaire
This questionnaire concentrated on organisational justice (with special reference to procedural, distributive, interpersonal and informational justice). The instrument consisted of 20 items: procedural justice (seven items), distributive justice (four items), interpersonal justice (four items) and informational justice (five items). A five-point Likert scale, ranging from 1 (not at all) to 5 (to a very great extent), was used to measure the outcomes.
Measuring instrument validity
A Cronbach’s alpha coefficient of 0.7 has been commonly used as a historical benchmark value to indicate that at least some of the items measure the same construct (Minitab, 2017). The PMSA measuring instrument was validated by a study conducted by Sharma et al. (2016). Cronbach’s alphas were for performance planning accuracy (0.77), feedback and coaching accuracy (0.74), performance review accuracy (0.75) and outcomes accuracy (0.79). The PMSA measuring instrument was validated for this study (see Table 1). Given the low item-total correlation of the performance planning accuracy factor, one item was removed. The Cronbach’s alpha was for performance planning accuracy (0.86), feedback and coaching accuracy (0.78), performance review accuracy (0.82), outcomes accuracy (0.96) and the total PMSA scale (0.92). The scale was found to have a high predictive validity.
| TABLE 1: Cronbach’s alpha coefficients of the performance management system accuracy, performance management system fairness and total performance management system effectiveness scales. |
The construct organisational justice was found reliable in a study conducted by Colquitt (2001, p. 396). The Cronbach’s alpha in his study were for procedural justice (0.93), interpersonal justice (0.92), informational justice (0.90) and distributive justice (0.93) (Colquitt, 2001, p. 396). The Cronbach’s alphas in this study were for procedural justice (0.97), interpersonal justice (0.97), informational justice (0.93) and distributive justice (0.96) (see Table 1). The Cronbach’s alpha of 0.96 for the PMSF scale was found highly reliable in this study. The Cronbach’s alpha for the overall PMS scale was 0.97.
Statistical methods
Descriptive statistics were used to determine the following: minimum and maximum scores, means and standard deviations. Descriptive statistics embody a group or collection of quantitative measures and data description ways. This includes measures of central tendency (mean, median, mode and proportion), dispersion measures (range, variance and standard deviation) and distributions and histograms of frequency (Evans, 2013). To compare the mean perception scores of the PMS effectiveness between men and women, a t-test was performed. Analysis of variance (ANOVA) was performed to compare the mean perception scores between age groups and post levels regarding the effectiveness of the PMS. The relationship between perceived accuracy (as measured by the PMSA questionnaire) and perceived fairness (as measured by PMSF questionnaire) was established using Pearson’s product–moment correlation coefficient.
Ethical considerations
Ethical clearance was obtained. All participants gave informed consent. Confidentiality and anonymity was ensured.
Results
Demographic composition
The majority (56.6%) of respondents were men, with 43.4% being women. The majority (59.4%) of employees were 30 to 39 years old, followed by the 20–29 years age group (19.8%). Only 0.5% of employees were 50 years old and above. Participants ranged from positional levels 1–12. In total, 21.2% of participants occupied level 8 positions, followed by 19.3% of employees at level 5 and 2.4% of employees at level 4. A total of 44.8% of respondents had 0–5 years of service, 34.4% had between 6 and 10 years of experience and 15.1% had between 11 and 15 years of working experience. A total of 49.1% of respondents had a post-school certificate, degree or diploma, followed by 18.9% with an honours degree and 1.9% with a master’s degree.
The data, therefore, indicate a male-dominated workforce, ranging in age from 30 to 39 years. The dominant positional level was 8, with 0–5 years of service and a degree qualification.
Performance management system accuracy
Table 2 presents employees’ perceptions of the PMSA based on four PMSA factors. The first two questions measured the performance planning accuracy factor. The mean score for the performance plan based on PMS gives a clear idea of what is expected of one to meet departmental goals (M = 4.18; standard deviation [SD] = 0.890) and the performance plan helps one focus one’s efforts through identification of goals (and/or behaviours or skills) relevant to meet departmental goals (M = 4.17; SD = 0.801), which were both at the high point of the scale. Table 2 reveals that the mean score for performance planning accuracy (M = 4.17: SD = 0.792) was higher than the midpoint of the range, suggesting that employees had a clear idea of what was expected of them and helped them to focus their efforts on the identification of goals relevant to meet departmental goals.
| TABLE 2: Employees’ perceptions of the performance management system accuracy. |
The feedback and coaching accuracy factor was measured by means of three questions, namely, the ongoing feedback during the performance cycle gives an accurate assessment of how one is performing against planned performance (M = 3.85; SD = 1.003); during the year, one’s areas for improvement are clearly pointed out to one (M = 2.84; SD = 1.304); and one receives the coaching one needs during the year to achieve one’s goals (and/or improve one’s behaviour or skills) to achieve planned performance (M = 2.51; SD =1.399). The mean score for the feedback and coaching accuracy factor (M = 3.07; SD = 1.037) was slightly above the midpoint of the range, indicating that, on average, employees perceived that the ongoing feedback provided an accurate assessment of how they have performed against planned performance, and improvements were clearly pointed out to them.
The performance review accuracy was measured by three questions. Annual feedback during a performance review is an accurate representation of the ongoing feedback during the performance cycle (M = 3.50; SD = 1.146); one’s goals (behaviours or skills) are accurately rated as part of the review process (M = 2.77; SD = 1.219); and one’s annual performance review is very objective in the assessment of one’s annual performance against planned performance (M = 3.45; SD = 1.153). The mean score for performance review accuracy (M = 3.24; SD = 1.008) was slightly higher than the midpoint of the range, indicating that, on average, employees perceived the annual feedback, how their goals were rated and the objectivity of performance reviews to be moderately accurate.
The performance outcomes accuracy factor was measured using three questions. The performance reviews result in an accurate performance rating (M = 2.84; SD = 1.273); one’s PMS outcomes (compensation, promotion and/or recognition) are linked to one’s performance ratings (M = 2.79; SD = 1.476); and one’s annual performance review is directly related to one’s performance outcomes (compensation, promotion reward and/or recognition) (M = 2.77; SD = 1.450). The mean score for the outcomes accuracy factor (M = 2.80; SD = 1.348) was slightly higher than the midpoint of the range.
The mean score for the PMSA scale (M = 3.24; SD = 0.901) was higher than the midpoint of the range, indicating that, on average, the respondents perceived their PMS as moderately accurate.
Performance management system fairness
Table 3 depicts employees’ perceptions of the PMSF based on organisational justice factors. The procedural justice factor was measured using seven questions, namely: ‘Have you been able to express your views and feelings during the implementation of the PMS?’ (M = 3.07; SD = 1.268); ‘Have you had influence over the performance assessment arrived at by the PMS?’ (M = 2.22; SD = 1.353); ‘Has the PMS been applied consistently?’ (M = 2.12; SD = 1.385); ‘Has the PMS been free of bias?’ (M = 2.12; SD = 1.464); ‘Has the PMS been based on accurate information?’ (M = 2.25; SD = 1.443); ‘Have you been able to appeal against the performance assessment arrived at by the PMS?’ (M = 2.90; SD = 1.273); and ‘Has the PMS upheld ethical and moral standards?’ (M = 2.20; SD = 1.457). The overall mean score for the procedural justice factor was (M = 2.41; SD = 1.151) well below the midpoint of the scale.
| TABLE 3: Employees’ perceptions of the performance management system fairness. |
The distributive justice factor was measured using four questions. These include: ‘Does your performance assessment reflect the effort you have put into your work?’ (M = 2.47; SD = 1.556); ‘Is your performance assessment appropriate for the work you have completed?’ (M = 2.65; SD = 1.518); ‘Does your performance assessment reflect what you have contributed to the department?’ (M = 2.49; SD = 1.568); and ‘Is your performance assessment justified, given your performance? (M = 2.40; SD = 1.538). The overall mean score for the distributive justice was (M = 2.50: SD = 1.480) below the midpoint of the scale.
Four questions measured the interpersonal justice factor: ‘Has he or she treated you in a polite manner?’ (M = 3.97; SD = 1.050); ‘Has he or she treated you with dignity?’ (M = 3.99; SD = 1.055); ‘Has he or she treated you with respect?’ (M = 4.04; SD = 1.039); and ‘Has he or she refrained from improper remarks or comments?’ (M = 4.10; SD = 1.092). The mean score for the interpersonal justice factor was (M = 4.02; SD = 1.014) at the highpoint of the scale.
The informational justice factor score was measured using five questions, namely ‘Has he or she been candid in his or her communications with you?’ (M = 3.61; SD = 1.161); ‘Has he or she explained the PMS thoroughly?’(M = 2.50; SD = 1.409); ‘Were his or her explanations regarding the PMS reasonable?’ (M = 2.50; SD = 1.436); ‘Has he or she communicated details of the PMS promptly?’ (M = 2.49; SD = 1.478); and ‘Did he or she seem to tailor his or her communications to individuals’ specific needs?’ (M = 3.00; SD = 1.297). The overall informational justice score was (M = 2.82; SD = 1.211) just above the midpoint of the scale. The mean score for the total PMSF scale was 2.94, which was slightly higher than the midpoint of the range, indicating that, on average, employees perceived their PMS to be fair. However, employees perceived both procedural justice and distributive justice as unfair.
Employees’ perceived effectiveness of the performance management system
Table 4 depicts the employees’ perceived effectiveness of the PMS. The table shows that the overall mean score (M = 3.09; SD = 0.913) was slightly above the midpoint of the range. This showed that employees perceive the PMS, on average, to be effective; however, regarding organisational justice, the respondents felt that supervisors did not comply with procedural and distributive justice principles in the implementation of the PMS.
| TABLE 4: Employees perceived effectiveness of the performance management system. |
Comparison of the perceived effectiveness of the performance management system mean scores between men and women
An independent samples t-test was conducted to compare the mean perception scores of the perceived PMS effectiveness between men and women. There were no significant differences in the scores for men (M = 3.04; SD = 0.872) and women (M = 3.16; SD = 0.963; t (210) = -0.95, p = 0.342, two-tailed) (see Tables 5 and 6).
| TABLE 5: Descriptive statistics of the differences in the mean perception scores of the performance management system effectiveness between men and women. |
| TABLE 6: Independent samples t-test of the differences in the mean perception scores of the performance management system effectiveness between men and women. |
Comparison of the perceived performance management system effectiveness mean scores between age groups
A one-way between-group ANOVA was conducted to explore the impact of age groups on the perceived PMS effectiveness (see Table 7). Statistically, there was no significant difference at the p > 0.05 level for the four age groups: F (3, 208) = 0.76; p = 0.520. Post hoc comparisons, using the Scheffe tests, indicated no significant differences between the four age groups. The mean scores for the age groups were: 20–29 (M = 3.22; SD = 0.776), 30–39 (M = 3.03; SD = 3.969), 40–49 (M = 3.20; SD = 0.943) and 50 and older (M = 2.88; SD = 0.438).
| TABLE 7: One-way analysis of variance to compare the mean scores of the performance management system effectiveness between the four age groups. |
Comparison of the perceived performance management system effectiveness mean scores between the post levels
A one-way between-group ANOVA was conducted to explore the impact of post levels on the perceived PMS effectiveness (see Table 8). There were statistically significant differences at the p < 0.05 level in the perceived performance management system effectiveness scores between levels 5, 6, 7, 8, 10 and level 12: F (8, 203) = 5.05; p = 0.000. Post hoc comparisons using the Scheffe test indicated that the mean score for post level 12 (M = 4.41; SD = 0.627) was significantly different from level 5 (M = 3.16; SD = 0.904), level 6 (M = 2.82; SD = 0.718), level 7 (M = 2.96; SD = 0.892), level 8 (M = 2.99; SD = 0.797) and level 10 (M = 2.89; SD = 0.706).
| TABLE 8: One-way analysis of variance to compare the mean scores of the performance management system effectiveness between the post levels. |
Correlation between performance management system accuracy and fairness scales
The relationship between the mean perception scores of fairness and accuracy was investigated using Pearson’s product–moment correlation coefficient (see Table 9). There was a strong positive correlation between the two variables (r = 0.952; n = 212; p < 0.000).
| TABLE 9: Correlation between performance management system accuracy and fairness scales. |
Discussion
The first research objective was to establish employees’ perceived performance management effectiveness, mea-sured by accuracy and fairness constructs. Accuracy was measured by a performance management accuracy scale consisting of four factors and 11 items. The mean score for the performance planning accuracy factor was 4.17 at the high point of the scale, indicating that the performance plan based on PMS provided employees with a clear idea of what is expected of them to meet the departmental goals. Furthermore, it assists employees to focus on their efforts through the identification of goals and behaviour and skills relevant to meet the departmental goals. The findings revealed that employees are involved in performance planning. The high mean scores indicate that employees perceived that performance planning was performed correctly and was accurately implemented. The mean score for the feedback and coaching accuracy factor of 3.07 was slightly above the midpoint of the range, indicating that, on average, employees perceived that the ongoing feedback provided is accurate. Respondents suggested that the continuous feedback that they received during the performance cycle gave a precise assessment of how they were performing against planned performance. However, a large number of respondents indicated that, during the year, their areas of improvement were not clearly pointed out to them. Another weakness identified was that they did not receive adequate coaching during the year to achieve their goals.
The mean score for the performance review accuracy of 3.24 was above the midpoint of the range, indicating that respondents were moderately satisfied with the performance review accuracy. The respondents felt that the annual feedback during the performance review was an accurate representation of the continuous feedback during the performance cycle. However, a large number of respondents indicated that their goals (behaviour and skills) were inaccurately rated as part of the review process. The findings indicated that their annual performance reviews were objective in the assessment of their annual performance against planned performance. The mean score for the performance outcomes accuracy factor was 2.80, just above the midpoint of the scale. The low mean scores indicated that a large number of respondents were of the opinion that the performance reviews resulted in inaccurate performance ratings. Furthermore, they also felt that their PMS outcomes (compensation, promotion and/or recognition) were not linked to their performance ratings and that their annual performance reviews were not directly related to their performance outcomes (compensation, promotion reward and/or recognition). Therefore, the mean score for the outcomes accuracy factor (2.80) was slightly higher than the midpoint of the range. The mean score for the total PMSA scale of 3.24 was higher than the midpoint of the range, indicating that, on average, the respondents perceived their PMS to be accurate. These findings were supported by Gruman and Saks (2011), who suggested that employees should also be allowed to formulate their goals within the broader organisational context. These findings implied that employees felt happy that they were engaged in planning their performance, and they were more likely to produce a satisfactory performance by meeting the set performance standards. These findings are consistent with Ikramullah et al. (2016), Viedge (2017) and Lee and Steers (2014), who concluded that employees are less likely to meet the appraiser’s expectations if they are not aware of what they are expected to do and how to do it. The findings were further supported by Bedarkar and Pandita (2014), who asserted that employee engagement results in positive feelings towards their work and organisation, thereby increasing job performance.
The construct organisational justice – which consists of four factors, namely, procedural justice, distributive justice, interpersonal justice and informational justice – was used to measure the PMSF. The mean score for the procedural justice factor was 2.41. The respondents indicated that they have been able to express their views and feelings during the implementation of the PMS. However, the majority of respondents revealed that they had little influence over the performance assessment arrived at by the PMS. The majority of respondents stated that the PMS was applied inconsistently and was biased. Participants felt that the PMS was based on inaccurate information. A slight majority indicated that they were able to appeal against the performance assessment arrived at by the PMS. The majority of respondents were of the opinion that the PMS did not uphold ethical and moral standards. The overall mean score for the procedural justice factor was 2.41, which is well below the midpoint of the scale, indicating that employees were dissatisfied and that supervisors did not comply with procedural justice principles.
The mean score for the distributive justice factor was 2.50. The majority of respondents felt that their performance assessment was not an accurate reflection of their work effort. Only a slight majority of respondents viewed their performance assessment as appropriate for the work they have completed. The majority of respondents were of the opinion that their performance assessment did not reflect what they contributed to the department and that their performance assessment was unjustified, given their performance. The overall mean score for the distributive justice was 2.50, indicating that employees were dissatisfied that supervisors did not comply with distributive justice principles.
Overall, the respondents were satisfied with the interpersonal justice factor. The majority of respondents were of the opinion that their supervisor treated them respectfully, politely and in a dignified manner. They also indicated that their supervisors refrained from improper remarks or comments. The mean score for the interpersonal justice factor of 4.02 was at the high point of the scale, showing that employees were satisfied that supervisors complied with interpersonal justice principles.
Regarding informational justice, the majority of respondents felt that there was open and honest communication between them and their supervisors. They regard their supervisor’s explanations regarding the PMS as unreasonable, and that supervisors did not communicate the details of the PMS on time. However, respondents moderately agreed that their supervisors tailored their communications to individuals’ specific needs. The overall informational justice score was 2.82, just above the midpoint of the scale, indicating that, on average, employees were satisfied with the way line managers had communicated PMS information. The mean score for the total PMSF scale was 2.94, which is slightly above the midpoint of the range. This indicates that, on average, employees perceived their PMS to be fair. However, employees perceived both procedural justice (2.41) and distributive justice (2.50) as unfair.
These findings imply that employees are dissatisfied with the procedures and outcomes of the PMS, which can negatively affect their performance. These findings are consistent with those of Lau and Martin-Sardesai (2012) that if procedures and outcomes are perceived to be unfair, employees are likely to be more dissatisfied. Komodromos (2014) supports this, stating that fairness in organisations is imperative as it affects workplace behaviours and results, and can foster the effective functioning of organisations. This is consistent with Lau and Martin-Sardesai (2012), who stated that the employees’ motivation effect would not be realised unless they perceive the PMS as fair. Similarly, Priesemuth et al. (2013) indicated that when employees feel that they have been unfairly treated in work-related matters, they are more likely to respond with anger, resentment and retaliatory behaviours.
Regarding the overall perceived effectiveness of the PMS, the findings revealed a mean score of 3.09, which is slightly above the midpoint of the range. This means that employees perceived the PMS as slightly effective. According to Sharma et al. (2016), for a PMS to be effective, it needs to be perceived as fair regarding the distribution of outcomes (distributive justice), processes followed to arrive at distributions (procedural justice) and clarity of communication mechanisms.
The second research objective was to establish whether there were any differences in employees’ perceived performance management and development effectiveness between gender, age groups and positional levels. An independent sample t-test was conducted to compare the mean perceived scores of the PMS effectiveness between men and women. There were no significant differences in the scores between men and women. One-way between-group ANOVA was conducted to explore the impact of age groups and post levels on the perceived PMS effectiveness. There were statistically no significant differences in the mean scores between the four age groups. There were statistically significant differences in the perceived PMS effectiveness scores between post levels 5, 6, 7, 8, 10 and level 12. Post hoc comparisons using the Scheffe test indicated that the mean score of 4.41 for post level 12 was significantly different from level 5, level 6, level 7, level 8 and level 10. The high score of 4.41 can be ascribed to the fact that post level 12 is middle management managers. However, their performance management is done by senior managers (post levels 13–16). These senior managers may have more experience in performance management, and the high mean score showed that managers at post level 12 perceived the PMS to be highly effective.
The third research objective sought to establish whether there is a correlation between the two factors of PMS effectiveness, namely, accuracy and fairness. There was a strong positive correlation between the two variables, with moderate perception scores for the accuracy associated with moderate perception scores for fairness. Therefore, PMS cannot be accurate if the appraisal process is perceived to be unfair. Similarly, Sharma et al. (2016) argued that for effectiveness, PMS needs to be perceived as fair regarding the distribution of outcomes (distributive justice), processes followed to arrive at distributions (procedural justice) and clarity of communication mechanisms.
Limitations and recommendations
Given the high response rate, the results can be generalised to the total population of the selected provincial government department. However, the results cannot be generalised or transferred to the 11 North-West provincial government departments. Based on the results, the following recommendations are made for line managers to improve the implementation of the PMS in the selected department:
- Regarding feedback and coaching accuracy, a large number of respondents indicated that they had not received adequate coaching throughout the year to achieve their goals or to improve their behaviours or skills. Therefore, managers should provide employees with proper coaching they need during the year.
- The results showed that managers did not apply procedural justice principles in the implementation of PMS. Managers should allow employees to participate and exercise influence over the performance assessment process. Managers should also implement performance management consistently and objectively. Performance management should be based on accurate and quantifiable information and uphold high ethical and moral standards.
- The results also indicated that managers did not uphold distributive justice principles in performance assessment. Managers should objectively recognise the efforts employees put into their work by applying objective performance indicators and standards. Managers should also objectively quantify employee contributions and ensure that performance assessments are justified.
- Regarding informational justice, managers should thoroughly and adequately explain the PMS to subordinates. Managers should continuously give reasonable explanations of the PMS. Also, management should communicate the details of the PMS promptly.
Conclusion
The main aim of this study was to measure employees’ perceived effectiveness of the PMS at a selected North-West provincial government department. The researcher used a quantitative research approach and collected data using self-administered e-mailed questionnaires. It can be concluded that employees perceive PMS – in the selected department – to be effective and accurate, and are generally satisfied with the implementation of the system. However, employees perceive the PMS as unfair. When employees feel they are unfairly treated during the appraisal system, their morale and performance will be adversely affected. Therefore, management must implement the system without bias, ensuring consistency at all times. Future qualitative research could be useful to establish, firstly, how a perception of effectiveness and unfairness plays out in the organisation and, secondly, to what extent the employee–supervisor relationship impacts perceptions of unfairness.
Acknowledgements
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
P.A.B. was the academic supervisor and responsible for the design of the project. T.B. assisted with the final manuscript and wrote the article. P.I.M. was the principal investigator responsible for the fieldwork and literature review.
Funding information
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data availability statement
Data sharing is not applicable to this article as no new data were created or analysed in this study.
Disclaimer
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.
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