INFORMATION AND COMMUNICATIONS UNIVERSITY
STUDENT NAMES: PATRICK KATONGO MULENGA
STUDENT IDENTIFICATION NUMBER (SIN): 1405595567
PROGRAMME OF STUDY: MA PROJECT PLANNING AND
MANAGEMENT
COURSE NAME: HUMAN RESOURCE MANAGEMENT
LECTURER: MR CHENGO
DATE OF SUBMISSION: 30th June 2015
ASSIGNMENT NUMBER: 1
Assignment:
You are a human resource consultancy and you have been approached to give a
professional guidance. Show how performance management would be
appropriate to Trade Kings’ challenges and provide a well detailed performance
Appraisal Plan.
Table of Contents
1.0
INTRODUCTION ...................................................................................................................................... 1
2.0
PERFORMANCE MANAGEMENT ............................................................................................................. 1
2.1
Objectives Performance Management for Trade Kings (Z) Ltd .......................................................... 3
2.2
Introducing performance management systems at Trade Kings ....................................................... 4
2.3
Benefits of Performance Management for Trade Kings ..................................................................... 5
3.0
PERFORMANCE APPRAISAL .................................................................................................................... 5
3.1
Possible issues with performance appraisal....................................................................................... 7
3.2
Performance Appraisal Plan ............................................................................................................... 7
4.0
CONCLUSION .......................................................................................................................................... 9
1.0
INTRODUCTION
Trade Kings (Z) Limited is one of the largest private manufacturing establishments in the Southern
Africa, engaged in diverse manufacturing disciplines. Our core business represents the manufacture
of Detergents (Liquids, Powders and Pastes); Soaps; Nutritious Food Products and a comprehensive
range of Sweets & Confectioneries. Emerging economies stimulate significant demand from society
at large and Trade Kings' has established a significant presence in the manufacturing sector
regionally. Their focus is to provide branded products of superior quality and value that improve the
lives of consumers nationally and internationally, now and for future generations.
The Zambian Manufacturing sector has experienced tremendous growth since 1990 and Trade
King's contribution is recognized nationally and regionally since its commencement in 1992. This
development has inspired a culture of self-sufficiency for Zambian manufacturers and allowed
Zambia to become a significant exporter and producer of various consumer goods. This growth was
exported to regional markets and in 2009 Trade Kings expanded manufacturing operations into
South Africa. Trade Kings South Africa was established, with operations in Johannesburg. Trade
Kings still continues to expand in line with its vision to provide market-leading, high quality
brands at an affordable price.
Strategic number four (4) of Trade Kings is “To encourage excellence in the performance of our
people” and is the focus of this paper. Trade Kings (Z) Limited has been having challenges in
aligning the organisational production targets and employee performance. They have never hard
Performance Appraisal for the past five (5) years. The writer, as a human resource consultancy has
been approached to give a professional guidance of showing how Performance Management would
be appropriate to Trade Kings’ challenges and to provide a well detailed performance Appraisal
Plan.
2.0
PERFORMANCE MANAGEMENT
Aligning the organisational production targets and employee performance is a challenge that
plagues so many organisations including Trade Kings (Z) Limited. The value of the workforce
depends on its members achieving adequate levels of competence. There is a need, therefore, to
carry out assessments of employee performance both for individuals as well as groups. This is
important as Performance Management links strategy with objectives to make the best use of
resources by coordinating the efforts of every member of the organisation. As a business grows and
takes on more staff, as the case is for Trade Kings (Z) Limited, the management of people becomes
a bigger issue which requires a systemic approach in the introduction of an appropriate performance
management system.
1
The various motivation theories have explored means by which employees can be inspired to use
greater effort in carrying out their responsibilities. It is, however, imperative note that effort, in
itself, is not a guarantee that an employee will achieve adequate performance standards. The
relationship between effort and performance may not be a direct one; it is quite possible that an
employee may use a great deal of effort in carrying out his duties, but fail to achieve success. There
are other factors at play which among others include ability, targets and resources in terms of tools,
information and time.
Michael Armstrong (2005) defines performance management in line with the Institute of
Performance Management’s research project of 1992, as a strategy which relates to every activity of
the organisation set in the context of its human resources, culture, style and communications
system. The nature of the strategy depends on the organisational context and can vary from
organisation to organisation.
Michael Armstrong further defines Performance management as a means of getting better results
from the organisation, teams and individuals by understanding and managing performance
within an agreed framework of planned goals, objectives and standards.
Performance management, then, is a systematic approach to the management of people ensuring
that:

A shared vision of the organisation and its objectives is communicated clearly by top
management.

Individual goals are agreed that take into account wider organisational goals.

Regular feedback and reviews of progress are held.

The review process identifies training, development and reward outcomes.

The system is driven by line management.

The effectiveness of the whole process is regularly evaluated.
Performance management is a means of getting better results by understanding and managing
performance within an agreed framework of planned goals, standards and competency requirements.
Processes exist for establishing shared understanding about what is to be achieved, and for
managing and developing people in a way that increases the probability that it will be achieved in
the short and longer term. It focuses people on doing the right things by clarifying their goals. It is
owned and driven by line management
2
Performance management can be conceptualised in the form of a cycle consisting of five elements
(Mabey and Salaman, 1995):

setting performance objectives;

measuring outcomes;

feedback of results;

rewards linked to outcomes;

amendments to objectives and activities.
From the foregoing, it’s evident that Performance management relies on the establishment of clear,
realistic performance goals between the line manager and employees. The employee objectives may
be expressed in terms of targets, standards of performance or tasks to be completed.
Performance management systems can be categorised into:

Reward driven, where the emphasis is on performance-related pay.

Development driven, where the focus is on training and development as the key outcome of
the process.
Performance appraisal is a key ingredient of both categories. Within the performance management
cycle, performance-related pay (PRP) and performance appraisal are key components: the former to
produce the extrinsic financial rewards in the form of shares, income differentials, profit-sharing
schemes and bonuses, and the latter to provide the essential mechanism for setting objectives and
feeding back performance criteria (Hendry, 1995).
2.1
Objectives Performance Management for Trade Kings (Z) Ltd
The overall aim of performance management for Trade Kings (Z) Ltd is to align the organisational
production targets and employee performance. It imperative to establishment a high performance
culture where individuals and groups take responsibility for the continuous improvement of
business processes and for their own skills and contributions within a framework provided by
effective leadership.
Specifically, the focus will be to align individual objectives to Trade Kings objectives and ensuring
that individuals uphold corporate core values. Expectations will have to be defined and agreed in
terms of role responsibilities and accountabilities (expected to do), skills (expected to have) and
behaviours (expected to be). This is with a view to developing capacity of people to meet and
exceed expectations and to achieve their full potential to the benefit of themselves and the
organization.
3
Performance Management at Trade Kings (Z) Ltd will be guided by the following aims [1] (source
IRS, 2003):

Empowering, motivating and rewarding employees to do their best.

Focusing employee’s tasks on the right things and doing them right. Aligning everyone’s
individual goals to the goals of the organization.

Proactively managing and resourcing performance against agreed accountabilities and
objectives.

The process and behaviours by which managers manage the performance of their people to
deliver a high-achieving organization.

Maximizing the potential of individuals and teams to benefit themselves and the
organization, focusing on achievement of their objectives.
2.2
Introducing performance management systems at Trade Kings
The recent Mercer global performance management study (2013) emphasises that only 3% of
company CEOs believe that their current Performance Management actually adds value. In terms of
choice of which performance management would be ideal for Trade Kings, this depends on
preference but below are a few pointers drawn from the survey findings:

Use a tool that is easy-to use and intuitive

Use a tool which helps you understand where action is required

Use a tool that provides clear analytics
Below is a Checklist of what the new performance management system for Trade King (Z) Ltd
should entail:

Intuitive user interface

Easy to understand the steps in the process

Provide opportunities for individual development

Have a good display of the analytics

Personalization of the rating scales

Allow for data comparisons over time
4
2.3
Benefits of Performance Management for Trade Kings
According the Workforce Performance Management Guide (2014), failing to assess and coach
employees has financial implications. Good performance management can engage employees and
invigorate Trade Kings (Z) Ltd's financial performance as follows:
3.0

Inspire greater employee commitment and help reduce unwanted turnover.

Enhance its reputation (brand) as an employer of choice.

Clarify roles and responsibilities and hold workers accountable.

Improve company performance and generate financial success.
PERFORMANCE APPRAISAL
Performance appraisal is one of the intensively researched topics in the field of
industrial/organizational psychology (Fletcher, 2001; Levy & Williams, 1998). It is a formal process
of employee monitoring (Cardy &Dobbins, 1994; Murphy & Cleveland, 1991) and usually involves
“evaluating performance based on the judgments and opinions of subordinates, peers, supervisors,
other managers and even workers themselves” (Jackson & Schuler, 2003, p.455). Similarly,
performance appraisal has been defined as “activities through which organizations seek to assess
employees and develop their competence, enhance performance and distribute rewards” (Fletcher,
2001, p.473).
Dr. Aguinis (2005) argues that although many organisations have systems labelled ‘performance
management’ they are usually only performance appraisal systems. Performance appraisal
emphasises the assessment of an employee’s strengths and weaknesses, and does not include
strategic business considerations. Also, performance appraisal systems usually do not include
extensive and on-going feedback that an employee can use to improve her performance in the
future. Performance appraisal is a once-a-year event or semi annaual, often driven by the HR
department, whereas performance management is a year-round way of managing business, driven
by managers as show in the table below:
5
Performance Management
Performance Appraisal
Performance should be managed
throughout the year, not just at the
annual appraisal
Done once a year with six monthly/quarterly
reviews (not always done)
Performance management looks forward
Reviews past performance – makes targets for
future (not always done)
Takes into account performance
Targets often not followed up or become out of
date
targets and
effectiveness
uses
indicators
to
measure
Done for good of department and individual
Often done to appease human resources
department – individual suffers if done by
untrained line manager
Done in line with organisation’s objectives and Organisation’s objectives and strategy are not
strategy
always taken into consideration
Source: RRC Business Training, Human Resource Management Study Manual
The following are six steps to a successful performance appraisal adopted from MediaTec
Publishing Inc., a leading integrated media company serving the human capital, management and
workforce development industries:

Prepare to manage performance by carefully setting objectives.

Assess and give feedback on performance throughout the year.

Review all pertinent documentation before meeting with the employee.

Appropriate place to deliver the appraisal away from interruptions or distractions.

Deliver the appraisal clearly, allowing for the employee to responding a dialogue. Don't
mince words or use code.

Encourage employees to do more of what they do well and improve where they can. Make
them feel valued.
6
3.1
Possible issues with performance appraisal
Whatever approach to performance appraisal is used, there will inevitably be issues and concerns. In
essence, to assess an employee’s performance necessarily involves some form of assessment against
predetermined standards or behaviours. In both situations there will be an element of human
judgement which, as we know, suffers from problems of reliability, validity and bias. Kinnie and
Lowe (1990: 47) state that ‘appraisers may find it difficult to identify and measure, the distinct
contribution of each individual’; this can be because the appraiser doesn’t really know the appraisee
or because, as suggested by Howell and Cameron (1996: 28), employees are constantly moving
from one project to another.
There may also be many external factors beyond the control of the individual employee which affect
their performance, such as resources, processes, technology, corporate and HR strategy, working
environment, external business context and management.
Equally, the appraisal might be skewed because if there is a long time span between appraisals,
managers may place greater importance on more recent performance, called the ‘recency effect’,
thereby possibly ignoring incidents that had occurred earlier.
3.2
Performance Appraisal Plan
Below is a detailed Performance appraisal plan that will be followed:
Activity
What
1. Performance Appraisal HR communicates and trains employees and
(PA) Communication & management group on start of PA season
Training
and PA ‘how to’
By When
August- September
2015
12 September 2015
2. Stakeholder
Confirmation
(Improved for 2014)
Employee and Manager agree on
stakeholders. Employee sends feedback
requests.
Emphasis: Employees to take ownership on
getting sufficient feedback on time from key
customers as linked to Performance
Agreement Objectives.
26 September 2015
7
3. Stakeholder Feedback
Received by Employee
& Manager
Feedback received by employee and
manager. Employee sends stakeholder
feedbacks linked to PA & self-rating to
manager
Emphasis: additional source of data for
manager and employee to encourage fairness
Reference: Trade Kings (Z) Ltd Central
Stakeholder Feedback Guide
3 October 2015
4. Manager Provisional
Rating
Manager consolidates stakeholder feedback
and other sources of data with employee
self-rating in preparation for roundtable
Emphasis: providing roundtable with the
most accurate and objective rating.
10 October 2015
5. Roundtable Briefing
HR conducts Briefing session or e-mail to
Roundtable Committee members to agree on
purpose, principles, process and outcomes
before Roundtable meeting
Reference: Trade Kings (Z) Ltd Central
Roundtable Guide
31 October 2015
6. Roundtable
Meetings Completed
Roundtable Committee meets to validate
individual performance rating through a
wider body of leaders and adds to objectivity
through alignment between individual,
manager,
departmental,
Corporate
performance.
Aim is to clearly differentiate between poor
and outstanding performers based on
evidence and alignment.
31 October 2015
8
7. Moderated Ratings
Finalised
Ratings confirmed with managers
14 November 2015
8. Annual PA Review
Conversations
Employee-Manager
discussion
performance rating after roundtable.
of
Emphasis: development conversation for
both employee (areas of strengths, growth
and alignment) and leader (areas of support
required by employee). This session will
include agreement of individual performance
rating.
21 November 2015
9. FY15 Submission of
final ratings
Final Rating collated by HR from Line
functions and input into Reward Matrix for
Merit Increases.
28 November 2015
10. FY16 Performance
Agreement Kick-start
Performance
Agreements
finalised and filed
compiled,
Source: World Vision
Assumption: Performance Agreements were done with line Managers at the beginning of the
FY15.
4.0
CONCLUSION
This paper has demonstrated that Trade Kings would benefit more from a Performance Management
system, whose starting point would be the respective Annual Plan from their existing Strategic Plan.
In effect, each Departmental Head would formulate or derive departmental objectives from the
corporate Annual Plan. Then, each member of the department would derive his/her individual
objectives from those of the department. By so doing, each individual employee’s objectives would
be aligned to the corporate objectives. Therefore, as each employee in the organisation achieves
his/her objectives, the overall objectives of the organisation would be met.
9
REFERENCES
Armstrong M., Baron A. (2005), Managing Performance: Performance Management in Action Developing
practice, CIPD Publishing, ISBN 1843981017, 9781843981015.
Taylor S., Armstrong M. (2014), Armstrong's Handbook of Human Resource Management Practice, 13th
Edition, Kogan Page
Beardwell I. et all (2004), Human resource Management A contemporary approach, 4th Edition, Pearson
Education Limited, ISBN 0 273 67911 2.
[1] http://www.irs.gov/pub/irs-utl/nta_2003_annual_update_mcw_1-15-042.pdf
Mercer, Global performance management study, 2013
BCG / EAPA, Creating People Advantage, 2013: Lifting HR practices to the next level
Fletcher, C. (2001). Performance appraisal and management: The developing research agenda. Journal of
Occupational and Organizational Psychology, 74(4), 473-487. http://dx.doi.org/10.1348/096317901167488
Aguinis, Cascio (2005), Applied Psychology in Human Resource Management, Prentice Hall
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