This study is about analysing and exploring the impact of performance management on employee performance. In this era of increasing globalisation and competitiveness, the need for all organisations to perform at their highest level is of paramount importance. It also remains that employees are the resources and assets of an organization.
According to Chan and Lynn (1991), the organisational performance norms should include profitability, productivity, marketing effectiveness, customer satisfaction and employee morale. Therefore, effective and efficient organisational performance is closely linked to employee performance. A highly motivated, dedicated, effective and efficient workforce will result in employee performance and this will have a positive impact on the overall organisational performance and success. In this process of work, employees of the organisations are the key role players and this process is known as performance management (Boxal and Purcell, 2008; Grant, 1999).
In order to keep their employees well engaged a modern and highly-organised institution should develop recruitment, training and reward policies. Therefore, the objective of performance management is to advance the ability of employees so that the performance of every employee can be enhanced (Pareek and Rao, 2006:31).
Finally, this topic would be interesting and meaningful for any organisation as the main objective of this study is to define the role of performance management in influencing employee performance levels and confirm the relationship towards organizational performance at the Fair Trading Commission of Seychelles. The outcome is significant and will be used to address the rate of staff turnover, improve on the current system of performance management by making recommendations to the Board of Directors.
The Fair Trading Commission of Seychelles employs 32 staff each highly professional in their respective area with their main education in law, economics, business and management. The Commission is an important institution and is the custodian of the Fair Competition Act 2009 and Consumer Protection Act 2010. It has established itself as a result driven institution focusing on its employees as the tool for success. Its vision is ‘be the leading institution in the protection of consumers and the competition process for the promotion of socio-economic welfare’.
The Fair Trading Commission of Seychelles sets performance management as a priority area because it recognises the role it plays in increasing productivity. Productivity improvements do not occur in a vacuum (Performance Management Manual 2017). They require knowledge, skills, actions, and commitment to performance. However, the Commission had no formal way of assessing and motivating performance until it implemented performance management in 2018 ahead of other Government institutions in Seychelles.
Performance management is currently being championed by the Human Resource Officer with the assistance of the Heads of Department. In the years ahead, human resource management will have to centre on employee performance as many institutions will be looking at the development of integrated performance management systems based on a competency framework. Consequently, performance management should be an essential step in the organisation’s HRM systems to influence employee performance. Guess (1999) argues that the impact of Human Resources (HR) on employees’ commitment and performance depends on employees` perception and evaluation of these practices.
This research aims to show the importance for the Fair Trading Commission of Seychelles to have a team of highly performing employees compared to a team of non-performing employees.
From my personal professional observations, the institution in the past years and this year is experiencing more than expected staff turnover (Appendix C), some frustration among employees, poaching from higher paid enterprises, poor motivation and medium to low turnout in staff activities. There has also been disappointment in relation to the current incentive scheme and the non-ability to reward high performance after the appraisal process. Despite the introduction and implementation of a performance management system, the Commission is still facing these challenges and through my observation it is viewed as more of a compliance activity rather than a tool to add value to the employees and institution. There are signs that this is slowly being reflected in our service delivery and will impact the organisational performance in an adverse way.
Therefore, improving employee performance by using performance management system is vital. Among the factors which prompt poor performance of employee is absenteeism, dissatisfaction, poor motivation, poor working standards, but the use of effective performance management systems can aid to harness the impact of these factors (Kandula, 2006). in this study, I will investigate and assess the impact of a bespoke performance management system on employee performance using the Fair Trading Commission of Seychelles as a case study. From the data gathered and outcome of the findings, recommendations could be made to improve organisational performance and increase productivity through employees’ performance by addressing the current negative factors.
The findings of this study may further serve as a provoking resource that can motivate other researchers to conduct research into the impact of performance management systems on employee performance in other institutions in Seychelles and Beyond. Furthermore, from the findings it will answer the questions below. The emphasis is to increase productivity, address necessary improvement, high performance of workforce and maintain a positive working environment. A better understanding of the relationship between the two variables could be understood and contribute to the wealth of knowledge in Seychelles.
In order to meet the research Aims The following research questions will be addressed:
1. To what extent does the performance management system influence employee performance?
2. What are the main elements of the performance management system used at the Fair Trading Commission?
3. How does the performance management system influence employee performance?
4. What recommendations can be made to improve the current system?
This research topic has been chosen because the Fair Trading Commission of Seychelles implemented a performance management system in 2018. Improvements in performance are visible, but still challenges exist, and the level of employee performance disrupted.
As the Chief Executive Officer appointed only a year ago, through the knowledge and insights to be acquired, I endeavour to contribute to the development of performance management and employee performance at the Fair Trading Commission of Seychelles to ensure organisational success.
I am aware of the power relationship and influence, but at all times, I will be carrying out the research as a researcher and not the Chief Executive Officer. (BERA 2018).
2. LITERATURE REVIEW/THEORITICAL FRAMEWORK
This section contains the key literature and theoretical framework to demonstrate prior knowledge, insight and understanding in the research topic. In this literature review, the theoretical framework consists of performance management, employee performance, and main factors affecting employee positive and negative performance, types of performance management system and impact of performance management on employee performance. The research will use the Fair Trading Commission of Seychelles as a Case Study to determine the impact of performance management on employee performance. The outcome is significant and will be used to address the rate of staff turnover, improve on the current system of performance management, any misconceptions about performance management.
Performance management is an important determinant of organisational success as it sets the appropriate platform to efficiently implement human resource action. It is important to mention the connection between the study of performance management within human resource management study. Defining performance of people at work according to Lebas (1995), the deploying and managing of the parts of the causal model that lead to the well-timed realization of specified objectives within limits particular to the firm and to the circumstances.
Armstrong (2004) defined performance management as a way of achieving better outcome from the whole organisations by understanding and managing within a decided structure, performance of planned goals, standards and competence requirements.
Aguinis (2009) views performance management as a continuous process of identifying, measuring and developing performance of individuals and teams and make performance parallel with the strategic goals of the organisation. It also assesses the progress being made towards the attainment of organisational strategic business objectives (Bridger, 2014).
Fletcher (2001) provided a completed and comprehensive human resource related performance management definition. (Kandula, 2006, pp. 5), in contrast describes performance management as an instrument in transforming the potential into performance by removing the in-between obstacles as well as motivating the human resource.
Performance management can also be viewed as a proactive and positive system of administrating employee performance in leading the employees and the organisation in the path of desired performance and results.
Deadrick and Gardner’s, (1997) defines employee performance as the record of outcomes accomplished for each job function, during a specified phase of time. In this way performance is taken as a distribution of outcomes accomplished and performance could be calculated by using a range of parameters.Employee performance plays an imperative role for organisational performance. Originally employee performance is what an employee does or does not do. Performance of employees could include: quantity of output, quality of output, timeliness of output, attendance at work, cooperativeness (Güngör, 2011).
Mone and London (2014) opined that the key determinant of organisations output is employee performance. Therefore, this has a direct link with the strategies in achieving organisational objectives.The main component of an organisation is employees and their performance plays a vital role in determining the final output and financial gain. Thus, as Sparrow (2012) argues that a necessary process of organisational management is using the most updated and effective techniques to increase employee performance.
Sparrow (2012) conducted studies associating employee performance to the workforce productivity achieved from individual competencies and talents. In contrast the positive correlation of employee performances and the organisational parameters has been established in the study of Mone and London (2014). The two authors establish that strong management techniques have a positive influence on the performance of employees.
Main factors affecting employee performance
Employees have different personalities, their reaction to internal and external pressures are shaped by these influences. I have observed that the performance of employees is affected by their mental framework as well as the workplace’s environment which affects employee confidence, output and commitment – both positively and negatively. Thus, it is vital for an organisation to detect the elements that have a crippling effect on the performance of an employee at the workplace and make appropriate adjustments.
There are several factors impacting on employees’ performance. Some of the factors are positive which contributes to the improvement of performance whereas some have a negative effect on performance. This is supported by the findings from the study of Awadh, Alyahya and Saad (2013). The key factors that will be concentrated on in this research are:Conflict, Leadership, Nature of Jobs, Rewards and Recognition and Organisational culture.
Types of Performance Management System
In this research, various methods including 360o feedback, rating scale, management by objectives, balanced scorecard, behavioural checklist and psychological appraisals will be explored.
Model to Analyze Performance Management System
In this research, performance development planning, ongoing discussions, performance development review and rewards and recognition will be explored in line with Fletcher and Williams (2013).
Impact of performance management system on employee performance.
Taylor and Pierce (1999) in research associated to the impact of performance management system on employee performance look at the effects of introduction of Performance management system on employees ‘attitudes and effort. They conclude that the attitude of employee improves due to increases in organizational commitment, cooperation and satisfaction with their supervisors. Furthermore, their outcomes also point out clear measurable targets is provided to employees with the introduction of performance management system. But their outcomes also show major fears on unfairness in bonus distributions and ratings when performance management system is introduced. Some comparable prior studies like Bevan and Thompson (1992) and Fletcher and Williams (1992) have established that performance management system improved employee commitment, motivation and participation by growing employees’ sense of individual value and advancing the employee ‘s view of empowerment.
Challenges to Implementation
Given that the Fair Trading Commission of Seychelles has been chosen as a case study, therefore the time allocated to conduct interviews and survey will prove to be a major challenge. All the interviewees will be working and carrying out their daily tasks. Even I as the researcher the ideal time for the survey or interviews might not be the ideal time for the staff.
Furthermore, the organisation is yet to develop a database for all staff information, therefore the retrieval of past data and its reliability may be an issue and time-consuming. In this instance I will also have to rely on long service staff for input instead of factual data.
Usually, staffs are not comfortable in sharing or giving their thoughts to someone in higher authority due to the fear of being targeted in any way. As the researcher, I have to use my leadership skills to reassure them that the purpose is for research only with the aim of improving the organisation for everyone working now and in the future. Failure for maximum participation of staff might be a concern as this will impact on the population sample and result in generalisation.
3. Research Methodology
This part of the research proposal focuses on the methodology to be used in the study.
In this research study, a mixed approach will be adopted involving both aspects of qualitative and quantitative research. Therefore, the main philosophy behind the research will be one of interpretism and positivism.
Research design can be considered as a mixed methods study employing a case study design to assess the impact of performance management systems on employee performance.
The study will take a convergent design under mixed methods where by qualitative and quantitative data will be gathered in parallel. The analysis of data will be done distinctly and combined at the point of interpretation, to obtain a complete understanding of the research problem. This requires that the research design be both descriptive and explanatory. (Todd 1979).
The collection of quantitative data will be done in the form of historical data including level of absenteeism, rate of staff turnover, employee performance, employee complaints and attendance record for staff activities. These will be analysed and displayed through graphical representation and trend analysis.
The collection of qualitative data will be in the form of interviews, surveys, questionnaires and observation. The most common forms of analysis in qualitative research are thematic analysis and this is the method that will be used as it identifies implicit and explicit ideas within the data.
It is important to include measures to test the trustworthiness of qualitative data. This relates to the way in which a qualitative researcher makes certain that transferability, credibility, dependability, and confirmability are apparent in their study. As the researcher, I will seek to satisfy the 4 criteria.
The target population of the study will be all the employees of the Fair-Trading Commission of Seychelles as per the records from the Human Resource Department.
The study will use several sources of data to get broad view about employee performance and performance management systems. Data will be collected through primary and secondary data collection methods.
Primary data will be the kind of information gathered first hand. The following data collection method is expected to be used-interviews, surveys, questionnaires and observation. This will be done exclusively within the boundaries of this research topic and specifically about the institution.
The analysis of secondary data will involve looking up for literature related topics under the study established by several researchers. It will enable myself to concentrate beyond the literature to the problem of interest. Part of the secondary data will also come from the database of the Fair-Trading Commission of Seychelles, Annual reports and any other internal reports.
The researcher has ensured that throughout the research study that adherence to all University of Seychelles, University of West Scotland and British Educational Research Association (BERA 2018) guidelines have been respected and followed effectively. The necessary permission will be sought from the Staff of the Fair Trading Commission before the survey analysis. Therefore, the secrecy, confidentiality and privacy of data will be maintained, and secondary resources properly referenced. All participants in this research will be informed that the information provided will purely be for academic research and not utilized for personal benefits. Finally, I guarantee that there will be no preferential treatment, discrimination of any forms or bias. (Appendix A: Consent form.)
The Gantt chart (Appendix B: Figure 1) will outline how the study will progress over time. So as to ensure that all tasks are completed in a timely manner and eventually the project, the chart which includes the relevant tasks and completion dates will be used to monitor the achievement.