Evaluating Xyz’s Performance Management System Implementation

ABSTRACT

There has been considerable academic and business interest in the subject of performance measurement in recent years as evidenced by the many academic papers and articles on the subject in recent times. (Bourne M, Mills J, Wilcox M, Neely A and Platts K, 2000; 2003; Kaplan and Norton, 1992). According to Bourne et al., (2003a, Abstract) there is evidence that many an organisation‟s attempts to implement performance management systems (PMS) have not been successful. These authors found that one reason for the low success rate is a lack of guidance on implementation.

This study was based on the implementation of a PMS by XYZ Corporation (Pty) Limited, which was centred on the balanced scorecard (BSC), giving specific focus to the change management processes applied. The study looked at whether technical knowledge of the BSC and PMS together with a change management process that fosters the participation of management and employees in goal setting can aid the successful implementation of a PMS. The researcher employed a combination of a qualitative case study and survey research and collected data through interviews, survey questionnaires and secondary data analysis. A sample of 65 out of 146 participants was identified for the survey and two (2) semi-structured interviews were conducted. The data gathered was reviewed against literature on the subject. Excel was used to analyse responses from questionnaires and group common outcomes. Initial attempts to introduce the PMS in XYZ yielded little progress. The researcher found that this initial attempt was technically flawed as there was no purpose, vision and strategy commonly shared and understood within XYZ. Progress was however evident after the company had concluded its strategic plan. Management participated in strategy formulation, goal setting and employees were involved in the design of individual performance agreements. Implementers however reported facing resistance and low attendances at scheduled PMS training sessions. This resistance was partially overcome by linking reward and punishment to the PMS. Despite efforts by the company to foster participation, respondents still perceived the PMS as being imposed by management. The study found that there was a lack of commitment on the part of employees whilst senior management was committed to the successful implementation of the PMS. There were also perceptions that performance evaluations were not being done fairly and equitably. The company‟s PMS was identified as a source of stress. The researcher generated conclusions summarised above on the study based on the outcome of the information gathered and by reference to literature on PMS and managing change, made recommendations and suggestions that may assist in further development of study on this field as well as XYZ and other corporations in implementing and embedding the PMS. These propositions outline the various considerations that organisations can incorporate in performance management designs, implementation and processes in order to successfully roll out such a system with minimum business disruptions and maximum benefits.