Advise on the Issues and Consideration of an Effective Performance Management System and on the Effective Management of Individual Performance in the Workplace

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In order to change the attitudes of the appraisee towards the traditional appraisal systems, MBO tends to be more objective and results-orientated. Furthermore, the employee is involved in managing his or own performance and therefore knows exactly what is expected at year-end, making it more equitable process. Ensuring fairness in the performance management system is very important in terms of the Equity theory. In this theory, the motivation of the employee to perform better depends on the individual’s perception of the fairness of his work’s input and the outcome. Conversely, if the employee perceives that peers are being rewarded more for doing less, he or she becomes less motivated to work hard. MBO ensures a productive work environment by communicating job requirements clearly and establishing fair and consistent performance objectives for all employees.

After all, appraisals are about relationships, communication, co-operation, mutual trust and respect. Another factor to consider ensuring the effectiveness in a performance management system is the intensive training of the rater. Managers need to have the ability to understand the effects of individual characteristics, the conditions within any given situation and the effects of these situations on individuals. This instills confidence in the appraisee and appraiser towards the appraisal system.

Employees should not see a performance review as a disciplinary session, but rather a session of constructive feedback to review past performance and improve future performance. When appraising individual performance, employees are either rewarded by positive reinforcement or negative reinforcement. Positive reinforcement involves rewarding an employee for positive behaviour or accomplishing personal objectives, either verbally, such as praises, or non-verbally, such as pay, benefits or promotional offers. In terms of the Reinforcement theory, positive reinforcement stimulates the occurrence of behaviour and so the individual’s behaviour is likely to be repeated. Negative reinforcement involves rewarding an employee by discouraging unfavorable outcomes. In terms of the Reinforcement theory, negative reinforcement ensures that unfavourable outcomes tend not to be repeated, strengthening the behaviour of the employee.

However, before rewarding an employee’s contribution to the realization of organizational goals, a manager needs to consider important factors, such as the needs, values, aspirations and expectations that promote the progressive evolution of the individual - and so Maslow’s Hierarchy of Needs should be taken into close consideration when designing the appraisal system. Managers should realize if employees have reached the stage in their life where they may not seek monetary rewards, wealth or power, but rather for the fulfillment and self-actualization of their mental or spiritual needs. Therefore, rewards have to be tailored to their unique evolutionary needs through a process of consultation, discussion and negotiation with supervisors and executives, which in turn, lead to a greater sense of fulfillment, and therefore better performance.