HRM3706
EXAM PREP NOTES
,WORKBOOK 1
PERFORMANCE MANAGEMENT IN CONTEXT
PREPARATION FOR EXAM
QUESTION 1
MAKE SURE YOU KNOW THE DIFFERENCES BETWEEN PERFORMANCE MANAGEMENT AND
PERFORMANCE APPRAISAL.
Performance Appraisal Systems Performance Management Systems
Focus is on performance appraisal and the generating of Focus is on performance management
ratings
Emphasis is on relative evaluation of employees Emphasis is on performance improvement of individual
employee and his/her departmental or team performance
Annual exercise – though normally periodic evaluations Continuous process with quarterly or periodic
are made performance review discussions
Emphasis is on ratings and evaluation Emphasis is on performance planning, analysis, review,
development and performance improvements
Rewards and recognition of good performance are The rewarding of performance may be an integral part –
important components defining and setting performance standards are integral
components
Designed and monitored by the HR department Designed by the HR department, but could be monitored
by the respective departments themselves
Ownership is mostly with HR administration Ownership is with line managers; HR administration
facilitates its implementation
Critical success factors (CSFs) and Key performance CSFs and KPIs are used as a planning mechanism
indicators (KPIs) are used for bringing in objectivity
There are review mechanisms to ensure objectivity in There are review mechanisms essentially to facilitate
ratings performance improvements
It is a system with deadlines, meetings, input and output, It is a system with deadlines, meetings, input, output, as
as well as a format well as a format
It is format-driven with the emphasis on the process, It is process-driven with the emphasis on the format as
linked to promotions, rewards, training and development an aid linked to performance improvements and through
interventions, placement, etc. them to other career decisions as and when necessary
,QUESTION 2
PERFORMANCE MANAGEMENT WITHIN AN INTEGRATED HUMAN RESOURCE MANAGEMENT SYSTEM
ACCORDING TO WERNER, SCHULER AND JACKSON (2012:290) PERFORMANCE MANAGEMENT
ACTIVITIES SHOULD BE ALIGNED WITH THE ORGANISATION’S INTERNAL ENVIRONMENT, EXTERNAL
ENVIRONMENT, AND OTHER HR ACTIVITIES;
THREE KEY ISSUES IN THE INTERNAL ENVIRONMENT
1. ORGANISATIONS BUSINESS STRATEGY
2. COMPANY CULTURE
3. TECHNOLOGY
BE ABLE TO EXPLAIN THOSE THREE ASPECTS IN DETAIL
THREE KEY ISSUES IN THE EXTERNAL ENVIRONMENT
1. LEGAL ENVIRONMENT
2. LABOUR MARKET
3. COUNTRY CULTURES
BE ABLE TO EXPLAIN THOSE THREE ASPECTS IN DETAIL
OTHER HR ACTIVITIES REFERS TO; STUDY THE SECTION ON PAGE 23-24 PRESCIBED BOOK. PAY
ATTENTION TO THE RELATIONSHIP BETWEEN PERFORMANCE MANAGEMENT AND OTHER HR
ACTIVITIES IN THE ORGANISATION.
1. PERFORMANCE-BASED INCENTIVES AND;
2. EMPLOYEE DEVELOPMENT
EXAMPLE: HOW CAN ORGANISATIONS ENSURE THAT THEIR PERFORMANCE MANAGEMENT
ACTIVITIES IN THE INTERNAL ENVIRONMENT ARE EFFECTIVE. STUDY PAGE 3 PRESCRIBED BOOKS. THEY
MIGHT ASK ABOUT EXTERNAL ENVIRONMENT OR OTHER HR ACTIVITIES. THE TRICK IS TO BE ABLE TO
EXPLAIN ALL. KNOW KEY ISSUES IN THE EXTERNAL ENVIRONMENT, INTERNAL AND OTHER HR ACTIVITIES
AND NOT JUMBLE THEM AROUND, KNOW WHICH ONE BELONGS WHERE AND BE ABLE TO EXPLAIN IN
DETAIL.
, QUESTION 3
STUDY THE PURPOSES OF PERFORMANCE MANAGEMENT ON PAGE 14-18 PRESCRIBED BOOK,
TOGETHER WITH YOUR WORKBOOK 1 ON PAGE 19. MAKE SURE YOU KNOW WHAT THE ROLE OF EACH
PURPOSE IS.
EXAMPLE: IMPLEMENTATION OF REWARD SYSTEM BASES ON LAYOFFS AND MERIT INCREASES FALLS
WITHIN THE ADMINISTRATIVE PURPOSE.
• Strategic purpose
Performance management can help top management to achieve its strategic business objectives by
linking the organizational goals with individual goals. Through the performance management process,
the behavior of employees is reinforced to be consistent with the attainment of organizational goals,
and the most important strategic initiatives are also communicated. Performance management also
plays an important role in the onboarding process, where new employees are oriented to understand
the organization’s culture and values and the behavior and results that are valued and rewarded.
To help top management achieve strategic goals
• Administrative purpose
Furnish valid and useful information for making administrative decisions about employees. Such as
salary adjustments, promotions, employee retention, identification of poor performers.
To furnish valid and useful information for making administrative decision about employees
• Informational purpose
PM systems serve as communication device. They inform employees about how they are doing and
provide them with info on specific areas that may need improvement
To inform employees about how they are doing and about the orgs and supervisors expectations
• Developmental purpose
Managers can use feedback to coach employees and improve performance on an ongoing basis.
Feedback allows for identification of strengths and weaknesses as well as the causes for performance
deficiencies.
Another aspect of developmental purpose is that employees receive info about themselves that can
help tem individualize their career paths.
To allow managers to provide coaching to their employees
EXAM PREP NOTES
,WORKBOOK 1
PERFORMANCE MANAGEMENT IN CONTEXT
PREPARATION FOR EXAM
QUESTION 1
MAKE SURE YOU KNOW THE DIFFERENCES BETWEEN PERFORMANCE MANAGEMENT AND
PERFORMANCE APPRAISAL.
Performance Appraisal Systems Performance Management Systems
Focus is on performance appraisal and the generating of Focus is on performance management
ratings
Emphasis is on relative evaluation of employees Emphasis is on performance improvement of individual
employee and his/her departmental or team performance
Annual exercise – though normally periodic evaluations Continuous process with quarterly or periodic
are made performance review discussions
Emphasis is on ratings and evaluation Emphasis is on performance planning, analysis, review,
development and performance improvements
Rewards and recognition of good performance are The rewarding of performance may be an integral part –
important components defining and setting performance standards are integral
components
Designed and monitored by the HR department Designed by the HR department, but could be monitored
by the respective departments themselves
Ownership is mostly with HR administration Ownership is with line managers; HR administration
facilitates its implementation
Critical success factors (CSFs) and Key performance CSFs and KPIs are used as a planning mechanism
indicators (KPIs) are used for bringing in objectivity
There are review mechanisms to ensure objectivity in There are review mechanisms essentially to facilitate
ratings performance improvements
It is a system with deadlines, meetings, input and output, It is a system with deadlines, meetings, input, output, as
as well as a format well as a format
It is format-driven with the emphasis on the process, It is process-driven with the emphasis on the format as
linked to promotions, rewards, training and development an aid linked to performance improvements and through
interventions, placement, etc. them to other career decisions as and when necessary
,QUESTION 2
PERFORMANCE MANAGEMENT WITHIN AN INTEGRATED HUMAN RESOURCE MANAGEMENT SYSTEM
ACCORDING TO WERNER, SCHULER AND JACKSON (2012:290) PERFORMANCE MANAGEMENT
ACTIVITIES SHOULD BE ALIGNED WITH THE ORGANISATION’S INTERNAL ENVIRONMENT, EXTERNAL
ENVIRONMENT, AND OTHER HR ACTIVITIES;
THREE KEY ISSUES IN THE INTERNAL ENVIRONMENT
1. ORGANISATIONS BUSINESS STRATEGY
2. COMPANY CULTURE
3. TECHNOLOGY
BE ABLE TO EXPLAIN THOSE THREE ASPECTS IN DETAIL
THREE KEY ISSUES IN THE EXTERNAL ENVIRONMENT
1. LEGAL ENVIRONMENT
2. LABOUR MARKET
3. COUNTRY CULTURES
BE ABLE TO EXPLAIN THOSE THREE ASPECTS IN DETAIL
OTHER HR ACTIVITIES REFERS TO; STUDY THE SECTION ON PAGE 23-24 PRESCIBED BOOK. PAY
ATTENTION TO THE RELATIONSHIP BETWEEN PERFORMANCE MANAGEMENT AND OTHER HR
ACTIVITIES IN THE ORGANISATION.
1. PERFORMANCE-BASED INCENTIVES AND;
2. EMPLOYEE DEVELOPMENT
EXAMPLE: HOW CAN ORGANISATIONS ENSURE THAT THEIR PERFORMANCE MANAGEMENT
ACTIVITIES IN THE INTERNAL ENVIRONMENT ARE EFFECTIVE. STUDY PAGE 3 PRESCRIBED BOOKS. THEY
MIGHT ASK ABOUT EXTERNAL ENVIRONMENT OR OTHER HR ACTIVITIES. THE TRICK IS TO BE ABLE TO
EXPLAIN ALL. KNOW KEY ISSUES IN THE EXTERNAL ENVIRONMENT, INTERNAL AND OTHER HR ACTIVITIES
AND NOT JUMBLE THEM AROUND, KNOW WHICH ONE BELONGS WHERE AND BE ABLE TO EXPLAIN IN
DETAIL.
, QUESTION 3
STUDY THE PURPOSES OF PERFORMANCE MANAGEMENT ON PAGE 14-18 PRESCRIBED BOOK,
TOGETHER WITH YOUR WORKBOOK 1 ON PAGE 19. MAKE SURE YOU KNOW WHAT THE ROLE OF EACH
PURPOSE IS.
EXAMPLE: IMPLEMENTATION OF REWARD SYSTEM BASES ON LAYOFFS AND MERIT INCREASES FALLS
WITHIN THE ADMINISTRATIVE PURPOSE.
• Strategic purpose
Performance management can help top management to achieve its strategic business objectives by
linking the organizational goals with individual goals. Through the performance management process,
the behavior of employees is reinforced to be consistent with the attainment of organizational goals,
and the most important strategic initiatives are also communicated. Performance management also
plays an important role in the onboarding process, where new employees are oriented to understand
the organization’s culture and values and the behavior and results that are valued and rewarded.
To help top management achieve strategic goals
• Administrative purpose
Furnish valid and useful information for making administrative decisions about employees. Such as
salary adjustments, promotions, employee retention, identification of poor performers.
To furnish valid and useful information for making administrative decision about employees
• Informational purpose
PM systems serve as communication device. They inform employees about how they are doing and
provide them with info on specific areas that may need improvement
To inform employees about how they are doing and about the orgs and supervisors expectations
• Developmental purpose
Managers can use feedback to coach employees and improve performance on an ongoing basis.
Feedback allows for identification of strengths and weaknesses as well as the causes for performance
deficiencies.
Another aspect of developmental purpose is that employees receive info about themselves that can
help tem individualize their career paths.
To allow managers to provide coaching to their employees
