The implementation of performance management systems (PMSs) and performance appraisals (PAs) by public managers remains a challenge and necessitates an investigation into employees’ perceptions of the effectiveness of the PMS and the fairness of PA.
This study investigated the association between employee involvement, performance-oriented culture, management commitment and the effectiveness of a PMS. Six factors that determine and influence employees’ perceptions of PA fairness were also investigated.
Employees’ experiences of the implementation and practice of PMSs and PAs by public managers may differ from what is intended. The motivation for this study was to quantify employee perceptions of the effectiveness of a PMS and the fairness of PA to establish if there is a discrepancy between what is intended and how they are implemented and practiced.
This cross-sectional study conducted a census on a total population of 140 employees in a public sector institution. A questionnaire comprising three sections was used to collect data: Section A contained biographical questions, Section B comprised questions on the contextual factors that measure the perceived effectiveness of the PMS while Section C comprised questions related to the perceived fairness of PA.
The results show that employees perceive their PMS to be ineffective and their PAs to be unfair. The mean perception scores for PA fairness for the Assets and Facilities Department were significantly lower than those of the Human Resources Department. This is indicative of some deficiencies in the appraisal process in the Assets and Facilities Department. Respondents occupying general positions returned significantly lower mean scores for PA fairness compared to those in managerial and professional positions, which indicates serious shortcomings in their appraisal process.
The findings reveal that employees were not involved in the development of the PMS. Also, the results indicated a lack of employee participation in the PA process, that PAs were not conducted for development purposes, performance feedback sessions were not undertaken on a regular basis and employees were not involved in goal setting. A training programme should address these organisational and managerial deficiencies.
This research study contributes to the body of knowledge by quantifying the perceptions of employees regarding the organisational factors that influence the effectiveness of the PMS and the six factors, namely appraisers’ knowledge, employee participation, clear goal establishment, employee development, goal establishment, appraisal follow-up and goal discussion that influence PA fairness.
This study focuses on employees’ perceptions of the effectiveness and fairness of performance management. Public managers are perceived as lacking the knowledge and skills to implement performance management effectively. Comprehensive research is needed to fully understand the effectiveness of performance management systems (PMSs) in organisations, especially from employee perspectives (Sharma, Sharma & Agarwal,
There are various factors that can be used to measure employees’ perceptions of Performance Management System Effectiveness (PMSE), but there seems to be a lack of clarity among researchers on how to define the construct effectiveness in the context of performance management and what indicators to use to measure employees’ perceptions. In their study, Sharma
The objectives of this study are firstly to provide an empirical analysis of the association between three organisational factors, namely employee involvement, performance-oriented culture and management commitment, and the effectiveness of the PMS. Secondly, the study investigates the factors that determine employees’ perceptions of PA fairness. Measuring perceptions of the effectiveness of the PMS and PA fairness allow for the exploration of employee experiences of the PMS practices that are implemented by line managers in a public sector institution.
This study contributes to the body of knowledge in the effectiveness of the PMS by providing a theoretical framework of the factors that influence the effectiveness of performance management and quantifying employees’ perceptions regarding the organisation and PA factors that influence the effectiveness and fairness of the PMS. The knowledge of the employees’ perceptions of the PMS in the public sector institution will assist public managers to implement such a system more effectively.
What are employees’ perceptions of the effectiveness of the PMS?
What are employees’ perceptions of the fairness of PA?
Is there a difference in the mean perception scores for the effectiveness of the PMS and the fairness of PA between male and female employees and employees of different age groups, departments and positions?
Is there a correlation between the mean perception scores of the effectiveness of the PMS and the fairness of PA?
In the following sections of this article, the researchers outline the literature review and research design followed by a presentation of the results. Finally, they discuss the results, highlight the practical implications, outline limitations and make recommendations for areas of future research.
Deb (
Swanepoel, Erasmus and Schenk (
In Public Management, performance measurement and management systems are key elements in improving government performance and accountability. The public sector is increasingly devoting more time to performance management, measurement and evaluation. Performance measurement is not synonymous with PMS. Performance management is viewed more broadly as a management tool that aims to improve the performance of an organisation while performance measurement focuses more narrowly on the metrics used to determine how an organisation is performing (Goh,
The ultimate goal of a performance management process is to align individual performance with organisational performance and should indicate to employees the organisation’s goals, priorities and expectations and how well they contribute to these (Selden & Sowa,
performance planning – performance contracting of members
performance agreement – formal interview to be conducted with every member by line manager in his or her span of control at the beginning of the performance cycle
performance agreement interview – interview shall be conducted before the end of April each year or within 1 month after appointment
PA – based on performance agreement and shall serve to provide a member with feedback from the supervisor about his or her performance
performance cycle – shall be aligned to the financial year and it shall extend from 01 April to 31 March of the following calendar year
performance categories – unacceptable (20% – 29%), needs improvement (30% – 49%), satisfactory (50% – 69%), above average (70% – 84%) and outstanding (85% – 100%)
management of unsatisfactory performance
integrated performance management (IPM) rewards
management of performance in exceptional cases
performance enhancement – personal development plan shall be compiled.
The development of the policy and practice guidelines for an individual PMS is a human resource management function. However, line managers enact performance management, including PAs. Employees’ satisfaction with the PMS and PAs are a good indicator of the effectiveness and viability (Culbertson, Henning & Payne,
Researchers have investigated the factors that influence the effectiveness of PMSs and the fairness of PAs. Haines and St-Onge (
Brown, Hyatt and Benson (
This study focuses on three internal organisational factors that influence the effectiveness of the PMS, namely employee involvement, performance-oriented culture and management commitment. The questionnaire that was developed and validated by Mansor, Chakraborty, Yin and Mahitapoglu (
Martin and Davis (
Organisational culture is another critical factor for improving the effectiveness of performance management. Sole (
culture can be determined by people’s total beliefs, ideologies, behaviours and values that are prevalent in the organisations, and which can influence organisation power relationships and their response to change. (p. 8)
The main factors characterising a performance-oriented culture are a focus on the end result for users and citizens employees’ empowerment in taking responsibility without fear of blame and a positive approach to performance management by considering it to be a tool for improvement and not merely a form-filling exercise.
Sanger (
The literature suggests that employees will only be satisfied with a PA process if criteria of ‘fairness’ are expressed regarding organisational justice. Furthermore, training in the PA process that causes discrepancies between expected and actual performance assessments contributes to dissatisfaction with the system. According to Messer and White (
Narcisse and Harcourt (
Brown and Benson (
The factors that are considered to influence the fairness of the appraisal system are appraisers’ knowledge, employee participation, clear goal establishment, employee development, goal establishment, appraisal follow-up and goal discussion. These factors are based on the questionnaire developed and validated by Evans and McShane (
Saeed and Shahbaz (
Narcisse and Harcourt (
Boachie-Mensah and Seidu (
During the goal-setting stage, individuals should be informed of and understand the organisational goals and objectives and should determine their own goals within this context (Gruman & Saks,
Aguinis (
Most research on the effectiveness of PMSs followed a quantitative approach. Therefore, a quantitative research approach was used for this study. Quantitative research is used to answer questions about the relationships among measured variables with the purpose of explaining, predicting and controlling phenomena (Leedy & Omrod,
Various other studies have also opted to follow a quantitative survey design approach to measure employees’ perceptions of the effectiveness and fairness of performance management (Dewettinck & Van Dijk,
The population in this study comprised 140 permanent and fixed-term contract employees in the Department of Training at a South African public institution in Mahikeng, North-West Province. A census was done on the total population. In total, 140 questionnaires were distributed and 81 responses were received from the population of 140. This is a response rate of 58%. The age group that provided the largest response was between the 35- and 44-year group (48.1%), 59.3% of the responses were women, 56.8% were employed between 5 and 9 years, 42.5% were from the Assets and Facilities Department and 54.3% occupied a general position.
Two constructs were consequently measured, namely the effectiveness of the PMS and fairness of the PA. The questionnaire was divided into three sections, namely: Section A: Biographical Information, Section B: Performance Management System Effectiveness and Section C: Performance Appraisal Fairness.
The PMSEQ (Performance Management System Effectiveness Questionnaire) was compiled from three organisational factors that influence the effectiveness of PMS. The questionnaire focused on three organisational factors and consisted of 12 items that measure the effectiveness of the PMS, namely Employee Involvement, Performance-Oriented Culture and Management Commitment. The instrument was validated in a study by Mansor
Cronbach’s alpha for three subscales of the effectiveness of the performance management system scale.
Subscales | Cronbach’s alpha | Number of items |
---|---|---|
Employee involvement | 0.732 | 5 |
Performance-oriented culture | 0.204 | 4 |
Management commitment |
0.704 |
3 |
The Performance-Oriented Culture construct was found to be unreliable and was excluded from the data analysis. This Performance Management System Effectiveness Scale reported a Cronbach’s alpha of 0.616 for the instrument’s reliability. The Performance Management System Effectiveness Questionnaire contains the following components:
Employee Involvement (five items)
Performance-Oriented Culture (four items)
Management Commitment (three items).
A 5-point Likert scale was utilised to measure participants’ perceptions of the PMSE ranging from 1 (strongly disagree) to 5 (strongly agree).
This instrument aims to measure the employee’s perceptions of the fairness of PA. The instrument was validated by a study done by Evans and McShane (
Cronbach’s alpha for the six subscales of the performance appraisal fairness scale.
Subscales | Cronbach’s alpha | Number of items |
---|---|---|
Appraiser knowledge | 0.746 | 5 |
Employee participation | 0.857 | 5 |
Employee development | 0.637 | 4 |
Goal establishment | 0.828 | 3 |
Appraisal follow-up | 0.886 | 2 |
Goal discussion |
0.617 |
2 |
The PAFQ contains the following components:
Appraiser’s Knowledge (five items)
Employee Participation (five items)
Employee Development (four items)
Goal Establishment (three items)
Appraisal Follow-up (two items)
Goal discussion (two items).
Thus, the PAFQ consists of 21 close-ended questions. The employees’ perceptions of the appraisal fairness were indicated on a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). To prevent response bias, the wording of four items have been negatively worded and was reversed scored.
The primary researcher was granted permission by the Director-General to distribute questionnaires to all employees of the public sector institution. The questionnaires were distributed via email. The completed questionnaires were returned to the researcher by hand and via the intranet. The questionnaires have been circulated to participants with an attached letter of consent explaining the purpose of the study. The letter of consent included a description of the research, protection of confidentiality and voluntary participation, the importance of participation, potential benefits and contact information for the researcher. The general instructions on how to complete the questionnaire were also included. The collection of data took place over a period of 3 weeks. This allowed participants with enough time to complete questionnaires at their convenience.
Data were analysed using the Statistical Package for Social Sciences (SPSS – version 22). Descriptive statistics were analysed by determining the minimum and maximum scores, means and standard deviations (SDs). Cronbach’s alpha reliabilities were analysed to determine the internal consistency and reliability of the questionnaires.
An independent
Four control variables were included in the analysis:
Descriptive statistics (the overall mean and SD) for each of the two organisational factors are depicted in
Means and standard deviations for the two organisational factors and average mean for the performance management system scale.
Subscales and scale | Minimum | Maximum | Mean | SD | |
---|---|---|---|---|---|
Employee involvement | 81 | 1.00 | 4.00 | 1.77 | 0.66 |
Management commitment | 81 | 1.00 | 4.00 | 2.88 | 0.80 |
Average mean of PMS scale | 81 | 1.00 | 4.00 | 2.33 | 0.52 |
PMS, performance management system; SD, standard deviation.
The mean score for employee involvement (1.72) was lower than the mid-point of the range, suggesting that employees were not involved with or engaged in the PMS. The mean score for management commitment (2.88) was slightly higher than the mid-point of the range, indicating that on average employees perceived management commitment to be moderately effective. The mean score for the effectiveness of the PMS (2.33) was slightly lower than the mid-point of the range indicating that on average the employees assessed their PMS to be ineffective.
The following mean scores were returned on the subscales for the six factors related to PA fairness: appraiser’s knowledge, 2.50; employee participation, 2.10; employee development, 2.35; goal establishment, 2.09; appraisal follow-up, 1.80; and goal discussion, 2.32 (see
Means and standard deviations for the six factors and mean score for the performance appraisal scale.
Subscales and scale | Minimum | Maximum | Mean | SD | |
---|---|---|---|---|---|
Appraiser’s knowledge | 81 | 1.00 | 4.60 | 2.50 | 0.78 |
Employee participation | 81 | 1.00 | 4.00 | 2.10 | 0.88 |
Employee development | 81 | 1.00 | 3.75 | 2.35 | 0.67 |
Goal establishment | 81 | 1.00 | 4.33 | 2.09 | 0.89 |
Appraisal follow-up | 81 | 1.00 | 4.50 | 1.80 | 0.86 |
Goal discussion | 81 | 1.00 | 4.00 | 2.32 | 0.94 |
Average mean of performance appraisal scale | 81 | 1.10 | 3.72 | 2.19 | 0.64 |
SD, standard deviation.
An independent-samples
The relationship between the mean perception scores for the effectiveness of the PMS and PA fairness was investigated using the Pearson product–moment correlation coefficient. There was a small positive correlation between the two variables (
The results of the study point to serious shortcomings in the implementation of the PMS and the PA process. The purpose of the first research question was to measure employees’ perceptions of the effectiveness of the PMS. The perceived effectiveness of the PMS was measured regarding two organisational factors, namely employee involvement and management commitment. The low mean perception score for the employee involvement subscale revealed that employees are not involved in the development of the PMS. The results from Tung
The second research question sought to measure employees’ perceptions of the fairness of their PAs. The mid-point mean score for appraiser’s knowledge of PA indicated that employees’ perceptions were neutral. The lower than mid-point mean scores for the employee participation, employee development, goal establishment and appraisal follow-up subscales and total scale indicated that there was a lack of participation in the PA process. Also, PAs were not done for development purposes, and performance follow-ups or feedback sessions were not conducted on a regular basis. Furthermore, employees were not involved in goal setting. The low overall mean score for the scale indicated that employees’ perceived their PAs to be unfair.
The third research question aimed to investigate if there is a difference in the mean perception scores of the effectiveness of the PMS and PA fairness between men and women, and different age groups, departments and positions. The control variables gender, age group, department and position showed no significant difference in the mean perception scores for the effectiveness of the PMS. However, the mean perception scores for PA fairness for the Assets and Facilities Department were significantly lower than those of the Human Resources Department. This is indicative of some deficiencies in the appraisal process in the Assets and Facilities Department. Respondents occupying general positions returned significantly lower mean scores for PA fairness compared to those in managerial and professional positions, which indicates serious shortcomings in their appraisal process.
The fourth research question sought to establish if there is a correlation between the mean perception scores for the effectiveness of the PMS and PA fairness. There was a small positive correlation between the two variables, with low perception scores for the effectiveness of the PMS associated with low perception scores for PA fairness. The PMS includes PAs as a subset. Therefore, PMS cannot be effective if the appraisal process is perceived to be unfair.
This study has identified significant deficiencies in the implementation and practice of the PMS and PA fairness by line managers. The findings of this research show that managers should improve employee involvement to ensure the effectiveness of the PMS. The findings also revealed shortcomings regarding how managers conduct PAs such as a lack of participation in the PA process, PAs did not contribute to the development of employees, feedback was not given on a regular basis and employees were not involved in goal setting. These shortcomings should be addressed to ensure that employees perceive the PA process to be fair.
Regarding future research, it is recommended that employee perceptions from other public sector institutions be studied to obtain a more representative sample. Future research should also focus on additional organisational factors that may influence the effectiveness of the PMS, such as performance training, employee recognition, stakeholder involvement, internal resources and the link between performance and rewards. Future research should also include the influence of other factors, such as communication and interpersonal relations between line managers and employees, self-efficacy of line managers, charismatic leadership, procedural justice, distributive and interactional justice and trust in line managers especially concerning the perceived fairness of PA.
Line managers in public sector institutions need to understand their roles and responsibilities in the implementation and practice of PMSs and PAs. The findings showed that employees perceived the PMS to be ineffective. Employees should be involved with and engaged in the design of the PMS.
The lack of employee participation in the appraisal process, the fact that appraisals are not conducted with a developmental goal, the absence of clear performance standards and goals and the fact that the determination of organisational and individual objectives is not based on agreement between managers and employees all contribute to employees’ perceptions that the PA process is unfair. The results indicate that employees seem to be informed of and knowledgeable on the performance management directive and view the PMS as a suitable tool to evaluate the performance of individuals. Therefore, the PMS policy and practical guidelines are perceived to be effective, but the implementation and practice by line managers are characterised by significant shortcomings.
The aims of the current study were to provide an empirical analysis of the association between two organisational factors (namely employee involvement and management commitment) and the effectiveness of the PMS and to investigate the factors that determine employees’ perceptions of PA fairness. The results indicate that employees perceive their PMS to be ineffective and their PAs to be unfair.
This research study adds to the body of knowledge by quantifying the perceptions of employees regarding the two organisational factors that influence the effectiveness of the PMS and the six factors that influence PA fairness. The quantification of these perceptions will enable line managers to develop and implement remedial strategies to ensure the effectiveness of the PMS and fairness of the PA process.
The authors declare that they have no financial or personal relationships which may have inappropriately influenced them in writing this article.
P.A.B. was the academic supervisor and responsible for the design of the project and wrote this article. M.M. was the principle investigator responsible for the fieldwork. S.S. was responsible for the literature review.