[i]

2014

THE INFLUENCE OF PERFORMANCE

MANAGEMENT SYSTEMS ON EMPLOYEE

ENGAGEMENT

By

Willem Christiaan Coenraad Brewis

Submitted in fulfilment of the requirements for the degree

of Masters in Business Administration to be awarded at

the Nelson Mandela Metropolitan University

[ii]

December 2014

Supervisor: Professor Gert Pelser

DECLARATION

I Willem Christiaan Coenraad Brewis; Student number: 208 007 904, hereby declare

that this thesis for student qualification to be awarded is my own work and that it has

not previously been submitted for assessment or completion of any postgraduate

qualification to another University of another qualification.

Willem Christiaan Coenraad Brewis

[iii]

ABSTRACT

This study focused on investigating different performance management systems and

the possibility to introduce a performance management system (PMS) into the sales

environment of a company. The company the researcher is working for does not

have an official PMS and feel the need to investigate the possibility to introduce a

PMS.

The study investigated an appropriate PMS that promotes engagement levels with

employees that will be the ideal system for the sales environment in the company.

Both the PMS and engagement impact on employees were addressed and the

suitable PMS was selected.

Implementing a system within a selected division the researcher will compile a road

map for implementing a PMS into the rest of the company with the background and

learning done while implementing the system.

The employees participated willingly in a survey. The questionnaire assessed the

employees understanding of what a PMS is. Further, the questionnaire assessed if

the company does have a PMS system in place. The engagement levels of

employees were measured and this allowed management to make the appropriate

changes to get the employees engaged in the workplace.

The results from the survey show that the employees understand and have a need

for a PMS. They do understand how a PMS in the workplace work. The company

has a system in place to compensate employees for work done. The company does

not deal with underperformance and engagement levels are very low.

The factors of engagement tested were very low and it addressing the engagement

factors integrated in a PMS will increase engagement levels with employees.

[iv]

ACKNOWLEDGEMENTS

It is with sincere appreciation that I thank the following persons and institution for

their contribution and assistance in completing this thesis.

1. The Lord Jesus Christ that spared my life, cured me from Cancer during this

time, and gave me the strength to complete this thesis.

2. My family, especially my wife Sonia. You suffered the most with me not

being able to give you the attention you deserve and being moody most of

the year. Things should go easier from now.

3. My Professor, Gert Pelser, you kept on pushing and pulling me to the end

zone. Giving up time during the holiday, thank you.

4. Last by not least, the NMMU staff that gave me the opportunity to extend this

over the time limits.

[v]

Contents

1.0. INTRODUCTION .............................................................................................. 1

1.1. Background ................................................................................................... 2

1.2. Problem Statement ....................................................................................... 3

1.3. Sub-problems ................................................................................................ 5

1.4. Significance of this study ............................................................................... 5

1.5. Aim of this study ............................................................................................ 5

1.6. Objective of this study ................................................................................... 5

1.7. Research questions ...................................................................................... 6

1.8. Assumptions.................................................................................................. 6

1.9. Format of this study ....................................................................................... 6

1.10. CONCLUSION ........................................................................................... 7

2.0 LITERATURE REVIEW .................................................................................... 8

2.1. Introduction ................................................................................................... 8

2.2. History of Performance Management ............................................................ 8

2.3. Definition of Performance Management ...................................................... 10

2.4. Performance Management versus Performance Appraisal ......................... 11

2.5. The process and structure of performance management systems .............. 11

Performance management systems .................................................................. 12

The Balanced Score Card ................................................................................. 12

[vi]

Definition of Balanced Score Card ..................................................................... 13

The evolution of the Balanced Score Card ........................................................ 13

Overview of the evolution of the BSC ................................................................ 13

2.5.6. The development of the BSC is summarised in table 1,2 and 3 .............. 20

Summary of the evolution of the BSC ................................................................ 20

2.6. Characteristics of a good performance management .................................. 21

2.7. The measurement of performance of sales employees .............................. 23

2.8. Key performance indicators......................................................................... 24

2.9. Employee engagement in performance management systems .................. 26

Employee engagement factors .......................................................................... 27

Expectancy theory of motivation ........................................................................ 29

2.10. Factors that influence employee engagement in the workplace .............. 30

The four factors that influenced employee performance the most were ............ 32

3.0. METHODOLOGY OF THE STUDY ................................................................... 34

3.0. Implementing a PMS that will engage employees in the company ................. 34

3.1. Rational of the study ................................................................................... 34

3.2. Research design ......................................................................................... 36

3.3. Data collection methods .............................................................................. 36

The research instrument .................................................................................... 36

Data collection procedures ................................................................................ 36

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Data analysis methods ...................................................................................... 37

3.4. Ethical considerations ................................................................................. 37

3.5. Significance of the study ............................................................................. 38

4.0. PRESENTATION OF THE DATA ................................................................... 39

4.1. INTRODUCTION ......................................................................................... 39

4.2. The table below is an overview of the research questions and the elements

the questionnaire tested ........................................................................................ 39

4.3. Demographic profile of respondents ........................................................... 42

4.4. The interview process ................................................................................. 42

Age groups ........................................................................................................ 43

Years of service with company .......................................................................... 44

4.5. What are the process and structure of the PMS .......................................... 44

Understanding of PMS ....................................................................................... 45

Involvement of employees in performance management planning .................... 46

4.6. How is the performance of sales employees measured? ............................ 52

How does the employee receive feedback ........................................................ 52

i. Performance feedback from management .................................................. 52

ii. Negative feedback ...................................................................................... 53

iii. Recognition of work performance ............................................................ 54

4.7. What is the impact of PMS on the engagement levels of employees .......... 55

[viii]

How does the employee feel about work and the environment he/she is working

in? ...................................................................................................................... 56

Inspired to reach goals set ................................................................................. 56

Work environment .............................................................................................. 57

The work environment questions were questions 13, 14 and 17. ............................. 57

i. Employee feel absorbed in work activities ......................................................... 57

Leadership ......................................................................................................... 61

The leadership questions were questions 26 to 27 ............................................ 61

Team and co-worker .......................................................................................... 65

Wellbeing ........................................................................................................... 71

5. CONCLUSION ................................................................................................... 75

5.1 Introduction ........................................................................................................ 75

5.2.1 The processes and structures of PMS ......................................................... 75

5.2.3. What is the impact of a PMS on the engagement levels of employees? ..... 76

Wellbeing ........................................................................................................... 79

5.3 Recommendations ............................................................................................. 79

5.3.1. The processes and structures of the performance management systems .. 79

5.3.2. The impact of a PMS on the engagement levels of employees .................. 82

5.3.3. Integrated recommendations ................................................................... 83

5.4 Significance of the research ............................................................................... 84

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5.5 Further research and lessons learned ................................................................ 84

ANNEXURE A: LETTER TO RESPONDENT .......................................................... 86

ANNEXURE B: Questionnaire .................................................................................. 87

Bibliography ............................................................................................................. 89

[x]

TABLE OF FIGURES

Figure 1 Framework for an effective and efficient PMS (Clardy, 2013) ...................... 4

Figure 2 History of performance management 1990 till 2001 (Yadav, et al., 2013) .... 8

Figure 3 History of performance management 2001 to 2011 (Yadav, et al., 2013) .... 9

Figure 4 BSC usage and effectiveness among survey respondents (Darrall, 2013) 12

Figure 5 The Balanced Scorecard version 1.0 (Perkins, et al., 2014, p. 9) .............. 14

Figure 6 Balanced Scorecard version 1.0.1 (Perkins, et al., 2014, p. 9) .................. 14

Figure 7 Balanced Scorecard 1.1 (Perkins, et al., 2014, p. 9) .................................. 15

Figure 8 Balanced Scorecard version1.2 (Perkins, et al., 2014, p. 9) ...................... 15

Figure 9 Balanced Scorecard version 2.0 (Perkins, et al., 2014, p. 9) ..................... 16

Figure 10 Balanced Scorecard version 2.1 (Perkins, et al., 2014, p. 9) ................... 17

Figure 11 Balanced Scorecard version 3.0 (Perkins, et al., 2014, p. 9) ................... 18

Figure 12 Balanced Scorecard 3.1 (Perkins, et al., 2014, p. 9) ................................ 19

Figure 13 The performance management cycle. (KUMARI & MALHOTRA, 2012) .. 24

Figure 14 A Simple Illustration of Value Creation. (Kaplan & Norton, 1992) ............ 25

Figure 15 Expectancy Theory of Motivation (Dublin, 2010) ...................................... 30

Figure 16. Estimated model using PLS (Anitha, 2013) ............................................. 32

Figure 17 Employees understanding of PMS ........................................................... 45

Figure 18 Agreement on targets set ......................................................................... 46

Figure 19 Consultation on targets achieved ............................................................. 47

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Figure 20 Employees knowledge of their KPI ........................................................... 48

Figure 21 Agreement reached on KPIs .................................................................... 49

Figure 22 Performance bonus and KPI .................................................................... 51

Figure 23 Performance feedback from management ............................................... 52

Figure 24 Negative feedback only ............................................................................ 53

Figure 25 Recognition of work performance ............................................................. 54

Figure 26 Employee inspired to meet goals ............................................................. 56

Figure 27 Employee feel absorbed in work activities ............................................... 57

Figure 28 Employee excited about going to work ..................................................... 58

Figure 29 Effort employees put into work ................................................................. 59

Figure 30 Employee focus on work .......................................................................... 60

Figure 31 Communication between senior management and employees ................ 61

Figure 32 Decision-making power ............................................................................ 62

Figure 33 Communication between employee and direct manager ......................... 63

Figure 34 Employees’ understanding of role in business ......................................... 65

Figure 35 Employee resistance to change ............................................................... 66

Figure 36 Employee commitment to company ......................................................... 67

Figure 37 Employee proactive in identifying opportunities ....................................... 68

Figure 38 Employees assisting others in workplace ................................................. 69

Figure 39 Employee willingness to go the extra mile ............................................... 70

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Figure 40 Compensation package ........................................................................... 71

Figure 41 Safe work environment ............................................................................ 73

Figure 42 Job security .............................................................................................. 74

[xiii]

TABLE OF TABLES

Table 1.The first generation evolution of the Balanced Scorecard (Perkins, et al.,

2014) ........................................................................................................................ 20

Table 2.The second-generation evolution of the Balanced Scorecard (Perkins, et al.,

2014) ........................................................................................................................ 21

Table 3.The third generation evolution of the Balanced Scorecard (Perkins, et al.,

2014) ........................................................................................................................ 21

Table 4 Likert scale was used .................................................................................. 39

Table 5. What are the processes and structures of the performance management

systems? .................................................................................................................. 40

Table 6.The impact of a performance management system on the engagement

levels of employees .................................................................................................. 42

Table 7 Age group of respondents ........................................................................... 43

Table 8 Distribution of years’ service........................................................................ 44

Table 9 Understanding of performance management .............................................. 45

Table 10 Agreement on targets set .......................................................................... 47

Table 11 Employee participated in setting targets .................................................... 48

Table 12 Employees knowledge of their KPI ............................................................ 49

Table 13 Agreement reached on KPI ....................................................................... 50

Table 14 Performance bonus and KPI ..................................................................... 51

Table 15 Performance feedback from management ................................................ 53

Table 16 Negative feedback only ............................................................................. 54

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Table 17 Recognition of work performance .............................................................. 55

Table 18 Inspired to achieve goals ........................................................................... 56

Table 19 Employee involvement in work activities ................................................... 57

Table 20 Employee excited about work .................................................................... 58

Table 21 Effort from employee toward work ............................................................. 59

Table 22 Employee focused on work ....................................................................... 60

Table 23 Communication between senior management and employees ................. 62

Table 24 Decision-making power ............................................................................. 63

Table 25 Communication between employee and direct manager ........................... 64

Table 26 Employees’ understanding of role in business .......................................... 66

Table 27 Employee resistance to change ................................................................ 67

Table 28 Employee commitment to company .......................................................... 68

Table 29 Employee proactive to identify opportunities ............................................. 69

Table 30 Employees assisting others in workplace .................................................. 70

Table 31 Employee willingness to go the extra mile ................................................. 71

Table 32 Compensation package ............................................................................. 72

Table 33 Safe work environment .............................................................................. 73

Table 34 Job security ............................................................................................... 74

[1]

1.0. INTRODUCTION

The research that was conducted in a company, a leading international player in the

automotive aftermarket for the past 30 years and has been the market leader with a

market share in excess of 50% for the last 10 years. This dominant market

leadership position has put new challenges on management. Being the market

leader requires a different strategy than gaining market share in the automotive

aftermarket.

The national sales manager reached retirement and the researcher has taken up the

position. The researcher had no prior experience of implementing performance

management systems. During his work experience in those companies that had

performance management systems, the responsibility to implement, execute and

maintain the performance management system, was the responsibility of the human

resource department.

The company does not have an official performance management system in place.

With this background and the fact that the researcher lacks in depth knowledge of a

PMS the thesis came about to enhance the knowledge and strengthen the team.

Management did not apply any PMS during the past 25 years because the company

was going through a rapid growth stage, when competitors in the business started to

withdraw from the market the past 10 years or shifted their focus to more “easy sell”

products. This made this company the market leader 10 years ago.

The company has now entered a period where it has to defend market share as the

market leader and being market leader, the company faces different challenges.

Growth in the current market conditions coupled with the high market share of the

company, the need for an engaged sales force to maintain and grow market share

has become extremely important.

An appropriate PMS could assist management to improve the company’s

performance. The system needs to engage and motivate the salespeople to achieve

[2]

set goals and company vision and strategy. With the system implemented effectively

for the sales force, management can be convinced to roll out the system to the rest

of the company.

1.1. Background

Motivating a sales team is not easy an easy task, and to have access to the

representatives only by way of conference calls or by cell phone increases the

difficulties. Moreover, with the pace of business today, management does not have

time to play "policeman" during the day to ensure that the salespeople are doing

their work.

Motivating salespeople without a PMS is extremely difficult in today’s sales

environment. Management needs to think creatively to motivate sales teams. Simply

asking salespeople to be motivated is not going to work. You need to involve them in

the process and find out what drives them (Dohrn, 2013).

All the team members are working from home and have a set target of customers to

visit daily. The salesperson does not have any control over price or discount. The

only way they can influence the sale is by being better at the job than the opposition

in the marketplace. The salesperson needs to understand the customer and his or

her business, and needs to add value to the customer’s business.

To complicate matters, the company introduction of a second product to the sales

team’s portfolio. The team members (who have an average of eight years’ service

with the company), have sold only a single product that has captured the market for

the last six years. At this stage they do not have to sell the product as the brand is

extremely strong in the market place, they only defend market share and maintain

good relations with their customers.

The new product needs "salesmanship". With this in mind, as well as the fact that the

sales team need to be highly motivated in the field and “think out of the box”, a PMS

need to be implemented to assist in this process. This might also help the

salespeople to take responsibility for their areas and budgets.

[3]

Employees need to be engaged in their roles as salespeople. If the sales

representative is doing the work only because he or she is afraid of being dismissed

or reprimanded, then the salesperson is not engaged and will not go the extra mile

for customer; he or she is only working to earn a salary (Trevor, 2013).

Senior management at the company has been with the company for the past 26

years and do not see the need to implement any performance management tools

because the company has been doing well for the past 26 plus years. The

salespeople’s performances is based on achievement of budget and the number of

calls made daily.

This adds up to them receiving a quarterly commission and a monthly calling

commission. The company does pay a 13th and a 14th cheque to all the employees,

provided the company meets its budget for the year. The “performance

management” that the company used to reward and manage employees worked for

them because of the high market share they enjoy and selling has not been a very

strong focus point. With the introduction of the second product category, which

necessitate engaged sales representative a proper PMS has become apparent.

The new product has a 1% market share and the competitors are extremely strong in

the marketplace. There are only two main brand name competitors and between

them, they have a 95% market share of the automotive aftermarket.

1.2. Problem Statement

The research problem identified is the absence of an effective PMS to measure the

performance and engagement levels of the sales team at the company.

Performance management is not a new buzzword. “Performance management” was

referred to in the late 1970s by Aubrey Daniels and has been a point of interest for

scholars since the mid-1990s (O’Boyl & Hassan, 2013). “Business performance

management encompasses all processes, information, and systems used by

[4]

management to set strategy, develop plans, monitor execution, forecast

performance, report results and make decisions.” (David, 2010)

PMSs are necessary, but unfortunately, the complexity and time-consuming nature

of some systems results in a few dilemmas and challenges that need to be

overcome before a system that will bear fruit in the end and can be implemented

(Collins & Bradford, 2013). The PMS needs to be taking into account the long-term

goals with the vision and goals of the company.

A good performance measurement system is an interlocking system and not a stand-

alone or “bolt on system” (Clardy, 2013). A good PMS should be more than a

mechanism to control the behaviour of the employee; it should lead to a better

organisational performance (Clardy, 2013).

Figure 1 represents a general framework for an effective and efficient PMS.

Figure 1 Framework for an effective and efficient PMS (Clardy, 2013)

[5]

The alignment of the infrastructure of the organisation, the human resource policies

and the working conditions are required as well as strong executive leadership.

1.3. Sub-problems

In order to evaluate if a PMS will have a positive effective in the targeted sales

environment, the process and structure of PMS and the engagement of employees

need more research and testing.

1.4. Significance of this study

This research will demonstrate to the rest of the management team the value that

lies in a PMS if it implemented correctly. This study will also assist in identifying a

PMS that can be implemented in the rest of the company and improve the

engagement levels of employees.

1.5. Aim of this study

The aim of this study is to identify and implement a performance management

system that will assist the company to have more engaged sales employees. After

the successful implementation in the sales division, the system full integration can

commence.

1.6. Objective of this study

The objective of this study is to identify a standard PMS or to adapt an existing PMS

for the sales team that will engage the employees and give them a sense of pride

[6]

and responsibility towards the company. The PMS needs to motivate the employees

to perform their duties at the maximum level (Mol, 2007).

1.7. Research questions

What are the processes and structures of PMS?

What is the impact of a PMS on the engagement levels of employees?

1.8. Assumptions

The assumptions regarding this study are:

The selected sample is representative of the population of the company. The

participants understand and have a clear understanding of the questions that asked

to them. All the participants will answer the questions and participate in an honest

and professional way, and will not use it to manipulate or further their own agendas

within the company.

1.9. Format of this study

This study will identify a PMS that will be suitable for the company:

Chapter 2 will be the literature review, once the literature reviews is completed, a

choice, based on which system appears to be the best fit for the company.

Chapter 3 explains the rational of this study and give an overview of the research

design and data collection method.

Chapter 4 will be dealing with the presenting of the data that collected together with

the interpretation of the data collected.

[7]

Chapter 5 will be dealing with the recommendations and future research needed with

regard to the thesis presented

1.10. CONCLUSION

The background provided about the company in this chapter indicates why a PMS is

necessary. The successful implementation will take the company from being a good

company to a great company with engaged and dedicated salespeople driving the

sales not simply to earn more, but because they are proud to be associated to this

company and have a feeling of belonging.

The next chapter will be a literature review of various PMS available in the market.

One PMS will be identified from the literature will be adopted or a combination of

systems will be created and implemented.

[8]

2.0 LITERATURE REVIEW

2.1. Introduction

In this chapter, the literature required to address the research question, first there will

be an introduction to the history and definition of performance management, with the

emphasis on the differences between performance management and performance

appraisals.

2.2. History of Performance Management

Performance management dates back to the early 19th century.

Figure 2 History of performance management 1990 till 2001 (Yadav, et al., 2013)

[9]

Figure 3 History of performance management 2001 to 2011 (Yadav, et al., 2013)

Figure 2 and 3 illustrates the history of the development of performance

measurement systems. Cost accounting and management accounting failed to be a

reliable performance measurement or management system, as these two treated

everything in isolation from one another and did not see the individual parts of the

company as parts of one whole. (Yadav, et al., 2013)

The industry went through a phase in which the emphasis was on the quality of the

products. Awards such as the Malcolm Baldrige Quality Award, European

Foundation for Quality Management and Deming were the order of the day.

The focus away from cost accounting to the broader side of the business came

about when Tableau de Bord started emphasising the relationship between financial

and non-financial measures.

Other accounting-based measures supported the impetus to move away from pure

accounting to more non-financial accounting measures. These were initiatives such

as strategic management accounting, activity-based costing and social accounting.

[10]

Performance measurement and management has changed over the past decade

and the use of the Balanced Scorecard (BSC) has become one of the leading PMSs

used in the world.

The BSC was developed and revolutionised the industry in 1992. Kaplan and Norton

looked at the performance management of the company as a whole and did not

focus on only one aspect of the company.

They identified the financial performance of the company as the lagging indicator

and not the leading indicator, as it is important to get the company to work in synergy

to produce the financial results desired. The leading indicators were customer

satisfaction, quality, innovation, and excellence and improvement activities.

Caution needed with the implementation of the BSC as a PMS. Neely and Bourne,

pointed out that 70% of all BSCs fail due to inappropriate design and companies find

it difficult to implement for various reasons (Neely & Bourne, 2000).

2.3. Definition of Performance Management

Armstrong defines performance management as “a set of interrelated activities and

processes that are treated holistically as an integrated and key component of an

organisation’s approach to managing performance through people, and developing

the skill and capabilities of its human capital, thus enhancing organisational

capabilities and the achievement of sustained competitive advantage” (Armstrong,

2009, p. 59).

The ideal PMS is based on management reaching an agreement with the employee

on how the work should be done, and not the employer commanding the employee

to do the work in a certain way.

Performance management is a partnership between the employer and employee.

Performance management cannot be a once-off encounter; it is continuous and

flexible.

[11]

2.4. Performance Management versus Performance Appraisal

Performance appraisal is a small part of performance management and not the

same as performance management per se. Performance management has to do

with the management of employees to achieve the goals and objectives of the

company.

Performance appraisals have to do with what the employee has done in the past.

The past is important because we learn from the past, but management needs to

focus on the future. Management need to correct the behaviour of employees as it

happens.

2.5. The process and structure of performance management systems

In today’s business environment, managements want to improve the performance of

the business and the way to do this is to improve the individual’s performance. The

best way of doing this is to implement an effective PMS that will not only increase the

individual’s performance but also at the same time engage employees.

Performance management needs to address and improve employee engagement in

the PMS. About 86% of companies worldwide are not happy with performance

management as it is today. This is according information published in the academic

journal People & Strategy 2013 (Rock, et al., 2013). The implementation of a generic

PMS on its own will not achieve the desired results of employee engagement.

One of the major challenges faced by businesses today is to identify and adopt the

most appropriate performance management and measurement system (Yadav, et

al., 2013, p. 948). He reported that at least 56% of performance management

implementation fails due to inappropriate design and implementation.

[12]

Performance management systems

In May 2013, Bain & Company conducted research and found that the use of the

BSC as a performance management tool was still relevant although declining but

that the overall satisfaction was still very high.

Usage and effectiveness among survey respondents

`

Figure 4 BSC usage and effectiveness among survey respondents (Darrall, 2013)

The Balanced Score Card

The balanced score card (BSC) was first developed in 1992 by Kaplan and Norton.

Since then it came under scrutinised by various academics. The BSC has changed

the way companies engage in performance management and is still the most widely

used performance management measurement in the world. A survey done in 2011

found that more than 54% of the 1,230 global firms sampled reported to have used

the BSC as a management tool (Perkins, et al., 2014).

[13]

Definition of Balanced Score Card

‘A Balanced Scorecard defines what management means by "performance"

and measures whether management is achieving the desired results. The

Balanced Scorecard translates Mission and Vision Statements into a

comprehensive set of objectives and performance measures that can be

quantified and appraised’ (Rigby, 2014, p. 1)

The evolution of the Balanced Score Card

It is important to have a look at the evolution of the balanced score card during the

past 20 years. A review of the BSC by (Perkins, et al., 2014) identified the changes

made to the BSC by various authors, with the result that they classify the BSC in

terms of the different revisions by different authors.

The BSC is one of the most influential concepts in the field of performance

management and measurement (Perkins, et al., 2014, p. 1). The BSC developed into

a PMS that assists management in answering the question “How are we

performing?” (Perkins, et al., 2014, p. 19)

Overview of the evolution of the BSC

The first generation or the original BSC as published by Kaplan and Norton (1992)

had four perspectives that management needed to focus on as one whole. Goals

and objectives were not the focus points in this version of the BSC and were only

touched on briefly. The four perspectives were described are set out in figure 5

below.

The number of measurements within each perspective needed to be equal; this was

done so that managers did not focus on one part of the model more than another

did. This version encouraged managers to focus on both financial and non-financial

[14]

aspects of the organisation.

Figure 5 The Balanced Scorecard version 1.0 (Perkins, et al., 2014, p. 9)

In figure 6, the setting of objectives and the measurement of performance against

the objectives became more prominent.

Figure 6 Balanced Scorecard version 1.0.1 (Perkins, et al., 2014, p. 9)

[15]

The linkage with the goals of the organisation, business planning and feedback and

learning was emphasised in a 1996 version (Figure 7 and 8)

Figure 7 Balanced Scorecard 1.1 (Perkins, et al., 2014, p. 9)

Figure 8 Balanced Scorecard version1.2 (Perkins, et al., 2014, p. 9)

[16]

The major changes or evolution of the BSC from the first generation to the second

was the introduction of the strategy map. The BSC was designed top-down. The

company overall objectives were set and goals were created to measure the

achievement against set objectives

Figure 9 Balanced Scorecard version 2.0 (Perkins, et al., 2014, p. 9)

[17]

BSC 2.1 included intangible assets into the BSC. The three intangible assets

identified was, human capital, information capital and organisational capital. The

focus shifted from top-down to bottom up. Here the intangible assets determine the

performance of the internal organisational processes.

Figure 10 Balanced Scorecard version 2.1 (Perkins, et al., 2014, p. 9)

[18]

BSC 3.0 is the third generation scorecard and the key difference here is the

“Destination Statement”. The statement is a picture in words of what the organisation

want to or should look like in the future

Figure 11 Balanced Scorecard version 3.0 (Perkins, et al., 2014, p. 9)

[19]

BSC 3.1 has a reduced number of perspectives. Outcome perspective replaces the

financial and consumer. The activity perspective replace the learning and growth and

internal processes.

Figure 12 Balanced Scorecard 3.1 (Perkins, et al., 2014, p. 9)

[20]

2.5.6. The development of the BSC is summarised in table 1,2 and 3

Summary of the evolution of the BSC

Table 1.The first generation evolution of the Balanced Scorecard (Perkins, et al., 2014)

[21]

Table 2.The second-generation evolution of the Balanced Scorecard (Perkins, et al., 2014)

Table 3.The third generation evolution of the Balanced Scorecard (Perkins, et al., 2014)

2.6. Characteristics of a good performance management

The performance management of employees is a process that needs to take into

account the individual and his or her needs. Performance management cannot be a

one-size-fits-all process. It takes time and effort from management to set up a PMS

that will target the individual and assist the company to reach the goals. The

individual’s performance management consists of five primary elements.

[22]

Agreement

Measurement

Feedback

Dialogue

Positive reinforcement

i. Agreement of performance expectations

The individual needs to be involved in the process and agree to the performance

expectations that management has of the individual. There needs to be a dialogue

and open communication between management and the employee. The expectation

of the parties involved need agreement by both parties to create a win-win situation.

(Armstrong, 2012)

ii. Measurement

After agreement on the performance expectations, the measurement instrument for

each item needs to be set and agreed. This can also be the KPI measurement

instrument. (Armstrong, 2012)

iii. Feedback and dialogue

The feedback sessions need to be consistent and done regularly. This is to make

sure that the individual understands what is expected and to address any issues that

might hinder the individual’s achievement of the goals. The formulating and

implementing of performance improvement plans can coincide in these sessions.

The result needs to be that the employee has achieved the goals set and is more

engaged in the work he or she is doing. (Armstrong, 2012)

iv. Positive feedback and personal development plan

Management, together with the employee, needs to identify the areas that need

improvement to assist the employee to achieve the goals. The focus should be on

the individual’s abilities and inabilities to do the specific task. This will differ from one

individual to the next. The plan needs agreement by both parties (Armstrong, 2012).

[23]

2.7. The measurement of performance of sales employees

The nature of the work that sales employees are doing makes it difficult to

standardise the way in which they get measured. The basics do apply but the KPI for

every sales environment will change from one company to the next.

In setting the correct performance measures or implementing the correct

performance measures, all employees need to know what the employer expects of

them and in turn, managers know if the desired output will deliver the required sales

objectives. This means that poor performance can be identified and improved, and

good performance rewarded.

Performance management needs to be the responsibility of the manager of the

employee and not the human resource department. In making the manager

responsible, the manager will be more involved and identify the KPI for each

individual so that the manager can measure and improve performance in the

division.

Performance areas identified and measured need to be relevant to the organisation’s

strategic objectives and goals. Doing this will allow the PMS to facilitate the strategy

of the company and to reach the goals set. This action ensures that all divisions are

focusing their performance management on the same goals (Schneier, et al., 1987).

Figure 13 below is a illustation the performance management cycle.

Set clear objectives

The starting point need to be the setting of goals that is achievable and

realistic to the employees. This need to be linked to the company objectives.

(Kumari & Malhotra, 2012)

Monitor goals

Magaging the performance throughout the year is very important. Employees

need feedback and a opportunity to correct their actions if they have failed.

(Kumari & Malhotra, 2012)

[24]

Coaching

Management has the responsibility to continuously coach employees. (Kumari

& Malhotra, 2012)

Monitoring Progress

Monitoring the progress of achieving set goals need to be done ongoing and

not only at the end of the cycle (Kumari & Malhotra, 2012)

Annual appraisal

The annual appraisal need to be a formality for the employee and not a eye

opener. The performance management cycle should be a ongoing and not

once off event. (Kumari & Malhotra, 2012)

Figure 13 The performance management cycle. (Kumari & Malhotra, 2012)

2.8. Key performance indicators

Measuring the employees’ performance is a critical part of any PMS. The

differentiating factor that can make or break a PMS is the identification of the KPI for

each individual or group of individuals in the organisation.

The KPI need to be alligned with the company’s values and strategy. Without this the

KPI will be just another measuring stick without any value to the company. The KPI

becomes something that need to be implemented because of compliance issues.

1. Set clear, measurable performance goals and

make development plans

2. Monitor goals progress, undertake

development

3. Choaching by supervisor throughout

the year

4. Monitor goal progress, undertake

development

5. Annual appraisal against goals. Adjust

goals and plan for the next year

[25]

Griffen (2004) identified that the KPIs need to be linked to the goals and the goals to

the objectives of the company, and then in turn aligned to the strategy of the

company. Only a KPI that fulfils these criteria will be meaningful.

Kaplann and Norton (1996) suggest that the strategy map of a company should be

used to represent the value chain of the company. The figure below illustrates the

value chain that needs to be used to set KPIs for all employees (Iveta, 2012).

Learning and growing leads to employees skills being developed and internal

processs are better undestood and apreciated. Understanding the internal processes

will result in better customer satisfaction. All of this will result into financial gain for

the company.

Figure 14 A Simple Illustration of Value Creation. (Kaplan & Norton, 1992)

[26]

2.9. Employee engagement in performance management systems

Few of the expositions in the literature on PMS and performance management

measurements focus on the levels of engagement of employees in these processes.

The PMS rather focused on the company’s performance. A PMS does not include

the measuring of employee’s motivation levels. Employees are one of the most

important assets a company has and yet very few PMS measure how motivated the

employees are.

Employees can be categorised in three different categories or levels of engagement.

These are:

i. Engaged employees: These employees will “go the extra mile”. They are

constantly striving to achieve excellence in their work and perform constantly

at high levels

ii. Not engaged employees: These employees are the ones that will do what

they are told to do, but they will not “go the extra mile”. They cannot be

classified as negative but also not as positive toward the company. The not

engaged employee does only enough not to get fired

iii. Actively disengaged employee: These employees find reasons to be

unhappy. They act out their unhappiness at work and are a danger to have in

a workplace, as they tend to influence the other employees negatively.

(Sanford, 2002)

The question of what engagement is involves more than simply measuring staff

turnover. Employees can have enjoyed long service with a company but this does

not mean that they are motivated employees (Buhler, 2006). Staff turnover is one of

the measures but not the ultimate decider. When an employee is engaged, he is

aware of his responsibility to the business goals and motivates his colleagues

alongside, for the success of the organisational goals (Anitha, 2013)

[27]

If we look at the above statement, we can see that employees cannot be engaged if

they are not part of the performance management process. Employees need to know

where they fit into the organisation and their contribution to the success of the

organisation.

The terms of engagement of employees was conceptualised by Kahn (Kahn, 1990).

Performance management structure need to be in such a way that all employees are

motivated and engaged by the management system. If the company has a PMS that

does not engage the employees the system will have the opposite effect of what a

PMS should achieve.

Engaged employees are more productive and willing to go the extra mile for the

company. Engagement of employees does not have to do with the perks the

company has to offer; it has to do with the fact that employees are proud of what

they are doing.” (Aarts, 2014)

Employee engagement factors

The three factors that need to be present to motivate and engaged employees,

according to Arnold Moll in his book Creating Winners in the Workplace are (Mol,

2007):

i. An Experience of Success

If employees feel successful, they feel proud of what they do and this will motivate

them to work even harder at being successful in the workplace. The question to

managers is how to give employees this “Experience of Success” in the workplace.

According to Mol, the best way to do this is to keep score of their work performance

(Mol, 2007).

Keeping score is important for both motivating and PMS. If you do not “keep score”

how can you measure success or failure in the workplace and how can you improve

if you do not have a baseline to measure against?

[28]

According to Mol, (Mol, 2007) management needs be careful that the scorekeeping

is handled in a positive way and not seen as a tool to catch the person out. (Mol,

2007)

One method that Mol proposes to achieve success is to set lower goals. This is

going totally against everything that management always wants to do. Mol argues

that setting too high goals will in fact have the opposite effect if they fail, and the

chance of failing is great because if the goals are too high the employees will not try

to achieve this goal.

Mol’s argument is that in setting the goals “LOW” the employee will feel that this is

achievable and will exceed the goals by a big margin. The employee will have the

feeling of being successful and the employer will have achieved the goals he or she

set out to achieve. (Mol, 2007)

ii. Responsibility

Employees are more motivated if they are responsible for the outcome of their work.

This responsibility goes hand-in-hand with accountability and thus the onus is on the

employee to make sure he or she achieves the targets that he or she has set, not

what management has set. If management sets targets for employees then

management is also responsible for those tasks.

Employees will be more empowered when they feel responsible for the task. With

responsibility comes the fact that the employees are empowered to make decisions

as he or she sees fit.

iii. Recognition of Achievement

The need for recognition is one of the most basic needs of a human being.

Employees will go to great lengths to get the recognition from their employer.

Employees want feedback from the employer on how they are doing.

Recognition of achievement is the simplest but also the most difficult thing for

employers to do. In the book Creating Winners in the Workplace (Mol, 2007), Mol

[29]

often asks employees how they know that they are doing a good job. The usual

answer is that the boss does not complain, so he or she must be doing a good job.

Expectancy theory of motivation

Expectancy theory based on the principle that the amount of effort put into a task will

depend on how much reward one expects to get in return. The theory contains three

basic components (Dublin, 2010):

i. Valence

Valence refers to the value of attractiveness of the outcome. The outcome is

anything that might stem from performance. Valence is based on a scale of -1.0 to

1.0. This means that the valence can also be negative to the employee.

A negative valence is what the outcome will be if the effort is very low. An example

will be that the bonus will be zero rand if we do not achieve our targets. This is a

form of motivating people because they know that this is a reality if the effort was

absent. Thus, valence is anything that might stem from performance.

ii. Instrumentality

Instrumentality refers to as a “performance to outcome expectancy”. When people

engage in a particular behaviour, they do this to achieve a desired outcome in the

end. Instrumentality ranges from 0.0 to 1.0.

iii. Expectancy

The effort to performance expectancy has to do with the effort the person will put into

the task. The desired performance depends on two other factors as well; one is the

environment that the person is in and the second is the ability to do the task

[30]

Figure 15 Expectancy Theory of Motivation (Dublin, 2010)

2.10. Factors that influence employee engagement in the workplace

Several factors identified in a study published by the International Journal of

Productivity and Performance Management (Anitha, 2014). The seven criteria tested,

to see the effect they have on employees’ engagement levels. Although all of these

do in one-way or another influence the employees’ commitment or engagement

levels, it found that some had a more positive or stronger impact than others. The

factors that were tested were:

i. Work environment

Management can facilitate a positive and healthy work environment by displaying

concern for employees’ needs and feelings. Management needs to provide positive

feedback and encourage employees to raise their concerns without fear of

victimisation. Management needs to encourage employees to develop new skills and

assist them in solving work-related problems.

ii. Leadership

Research studies (e.g. Wallace and Trinka, 2009) have shown the value of

leadership to engagement levels in the workplace. Engagement occurs naturally

[31]

when leaders are inspiring. Leaders are there to encourage and communicate to the

employee the importance of the work they are doing and how they contribute to the

success of the firm. Employees will be more engaged in the workplace if they have a

sense of belonging and importance. This is the function of the leader.

iii. Team and co-worker relationship

Trusting, interpersonal harmony with other co-workers is extremely important in the

workplace. This combined with a supporting team promotes employee engagement.

The supportive environment encourages employees to try new things without fear of

the consequences if they fail. Locke and Taylor argue that if employees have a

positive interpersonal interaction with their co-workers, they should find greater

meaning in their work and be more engaged in the workplace.

iv. Training and career development

Training eliminates mistakes and gives the employee a feeling of encouragement

that management has enough confidence in him or her to invest time and money to

train and develop him or her.

v. Compensation

Acceptable standards of remuneration are fundamental for employees.

Compensation is a combination of financial and non-financial rewards. Employees

that receive recognition and rewards from their companies feel obliged to respond

with higher levels of engagement.

vi. Organisational policies

Amiable organisational policies and procedures go a long way in assisting

employees to reach company goals, and when the goals reached, the engagement

levels are higher. Policies and procedures that encourage employee engagement

might include fair recruitment policies and fair promotional policies. Another factor

that also has a positive impact is if the firm has a flexible work-life policy.

[32]

vii. Workplace wellbeing

This holistic measure enhances employee engagement. Wellbeing definition: “all

things that is important to how we think about and experience our lives”. Because of

this wide definition of wellbeing, this factor becomes the most important measure for

gauging the influence a firm has on its employees. Researchers of the Towers Perrin

Talent Report (2003) found that if management is truly interested in employees’

wellbeing, this translates into an important driver of engagement.

Figure 16. Estimated model using PLS (Anitha, 2013)

The four factors that influenced employee performance the most were

Work environment

Leadership

Team and co-worker

Wellbeing

[33]

There is a positive relationship between employee engagement and employee

performance. Employee performance depends on employee engagement (Anitha,

2013, p. 314).

[34]

3.0. METHODOLOGY OF THE STUDY

3.0. Implementing a PMS that will engage employees in the company

The company on which this case study is based has a small sales force. It consists

of eight external area managers and three internal sales administrators.

Although this is a small team, the salespeople, together with the internal sales

administrators, call on customers in the whole of South Africa and neighbouring

countries, including Botswana, Namibia and Zimbabwe.

The aim of this research is to test if the factors identified in the literature review hold

true in practice. The factors contributing the most to the engagement levels of the

employee were identified as being the work environment, leadership and team

relationship (Anitha, 2013).

The distribution of the research questionnaire will be done in such a way as to get

maximum feedback from all the sales employees. For this reason, the participants

will receive the questionnaire before they are requested to complete it. A focus group

with will also be held with all the participants to investigate further what the

shortcomings of the current PMS are. These methods will suit the situation the best

because of the limited amount of people working for the company.

3.1. Rational of the study

i. The absence of a performance management system

The literature on the performance management process indicates that the system

the company uses currently does not qualify as a PMS. With reference to the

definition stated in chapter one point 1.2:

Business performance management encompasses all processes, information,

and systems used by management to set strategy, develop plans, monitor

[35]

execution, forecast performance, report results and make decisions. (David,

2010)

The system the company is using is based on the perception of management, which

does not take into account the past few months. It tends to focus on the past few

weeks. Personality also comes into play at this stage and this will influence any

decisions regarding performance.

As noted in chapter 2, the balanced scorecard evolved over the past few decades

and is still a work in progress. The foundation was set by Kaplan and Norton and this

is still the most relevant and effective system, according to the respondent of a

survey that was done (Darrall, 2013).

ii. The value of KPI in measuring sales performance

It was evident from the literature that the setting of KPI is extremely important and a

key element in getting the PMS to work the way it was designed.

The identifying of the KPI is critical for the effectiveness of performance

management. To ensure that employees will be more engaged in their day-to-day

activities.

Linking the employees’ KPI to the value chain of the company and the BSC is the

most effective way to attain a coherent and uniform BSC for all the employees in the

company.

iii. Engagement levels contribute to better performance.

The literature on the engagement levels of employees indicates that there are certain

factors that have a significantly more positive impact on the engagement levels of

employees.

The four factors that stood out more than the rest were work environment,

leadership, team relationships and wellbeing. The rest of the factors were

insignificant in comparison to the rest and the research will therefore focus only on

[36]

these factors, as well as exploring whether there are any other factors that influence

the employees’ engagement levels.

3.2. Research design

The research design is defined as a plan according to which the researcher will

obtain research participants (subjects) and collect their information. The researcher

will measure the variables in the research questions and explore the relationships

between a proper PMS and the engagement of employees.

The sales team consists of eight external salespeople and three internal sales

administrators. With the population being so small, the entire population is used for

this study.

3.3. Data collection methods

The research instrument

The questionnaire handed to the respondent in a lecture room and they can

complete the questionnaire without discussing it with fellow employees. Interviews

held with each respondent after the analysis of the data is completed. The

employees filled in the questionnaire to determine their level of engagement with the

current situation

Data collection procedures

Self-administered questionnaires given to the respondents by the interviewer but

completed by the respondents with no interviewer involvement. Self-administered

questionnaires ensure the anonymity and privacy of the respondents, thereby

encouraging more candid and honest responses. Questionnaires also help to ensure

that information from different respondents is comparable.

[37]

The interviews will be recorded and transcripts made to be used for the analysis and

for describing the results. The interviews will be to clarify anything that is unclear to

the respondent. The respondent will be asked to give his or her impression of the

term “performance management” and examples of any from previous companies that

they have worked for.

Data analysis methods

Data analysis for the study will comprise descriptive statistics. The researcher will

use descriptive statistics to describe the basic features of the data in the study in

quantitative terms and provide simple summaries of the measures.

The results from the open-ended questions and transcripts from the interviews will

be coded to see if the coded data corroborates the findings and possibly sheds more

light on the relationship that is being studied.

3.4. Ethical considerations

The respondents assured of the following:

Analysis of the data will be done based on the questionnaire and interviews

collected from respondents, and the researcher will be unbiased when

analysing the data collected;

The participants’ anonymity will be respected at all times;

The researcher will accept accountability for the research and will act in a

responsible manner;

Integrity will be ensured by being fair and honest;

Individuals’ participation in this research will be on a voluntary basis without

undue influence; and

The researcher will treat the information as confidential as possible.

[38]

3.5. Significance of the study

Apart from the practical value for the company, the relationship between

performance management and engagement will provide useful information.

If a positive, relation exist between PMS and engagement, the use of engagement

principles in PMS evaluation sessions will be stressed.

[39]

4.0. PRESENTATION OF THE DATA

4.1. INTRODUCTION

This chapter deals with the interpretation of the results of the survey done on the

sales team. The population used for the survey, it needs to be emphasised that the

total number of respondents was only 11 employees.

The survey’s execution according to the specifications in the previous chapter, and a

100% response rate achieved.

With the exception of the questions regarding the demographic profile of the

respondents, the following Likert scale used to capture response to questionnaires.

4.2. The table below is an overview of the research questions and the

elements the questionnaire tested

I know what a performance management system is

Strongly

Disagree

Disagree Neither agree

nor disagree

Agree Strongly Agree

1 2 3 4 5

Table 4 Likert scale was used

Table 5 Research question 1: What are the processes and structures of the

performance management systems?

The two tables below give an overview of the questionnaire content.

[40]

Elements Number Questions

Understanding of

performance

management

systems

1 I know what a performance is management

system is

Involvement of

employees in

Performance

management

planning

3 I have agreed on the performance targets set by

management

4 I have been consulted on targets to be achieved

8 I know what my KPIs are

9 I have agreed on the KPI’s

10 My KPI’s are linked to my performance bonus

How does

employees receive

feedback

6 I receive regular feedback from management

with regard to performance

7 I only get feedback when I have failed

12 Management within my organisation recognises

strong job performance

5 I have confidence in achieving the targets set

11 I am inspired to meet my goals at work

Table 5. What are the processes and structures of the performance management systems?

Table 6. The impact of a performance management system on the engagement

levels of employees.

Elements Number Questions

How do the employee feel about work and the environment he is working in

13 I feel completely involved in my work

15 I get excited about going to work.

[41]

16 I am often so involved in my work that the day goes by very quickly

17 I am determined to give my best effort at work each day

18 When at work, I am completely focused on my job duties

Leadership 26 Communication between senior leaders and employees is good in my organisation

27 I am able to make decisions affecting my work

28 My supervisor and I have a good working relationship

Team and co-worker

14 I understand how my work impacts the organisation's business goals

19 In my organisation, employees adapt quickly to difficult situations

20 Employees here always keep going when the going gets tough

21 Employees proactively identify future challenges and opportunities

22 Employees in my organisation take the initiative to help other employees when the need arises

23 Employees here are willing to take on new tasks as needed

Wellbeing

24 I am satisfied with my overall compensation

25 I am compensated fairly relative to my local market

[42]

30 Senior management and employees trust each other

31 Employees treat each other with respect

32 My organisation has a safe work environment

33 I am satisfied with my overall job security

Table 6.The impact of a performance management system on the engagement levels of

employees

4.3. Demographic profile of respondents

Eleven questionnaires handed out and returned. This is a 100% response rate of the

population of the sales team. The research instrument grouped the respondents into

various demographic profiles.

The study does not differentiate or analyse the data according to the demographic

profile; this information recorded purely to see if the profile mix, especially with

regard to years of service at the same company, influence the results. People that

have been with the same company tend to get into a routine and accept all things as

normal in the work place.

4.4. The interview process

The interview process held with each participant on a one-on-one basis before the

questionnaire was completed. The questions were read to the participants and they

were asked if they understood the questions. If anything was unclear, the interviewer

[43]

clarified the question so that all participants understood clearly, what was asked of

them with the questionnaire.

Age groups

The questionnaire allowed for five options from which the respondent could choose.

The employees’ ages differ across the range, with the majority of the employees in

the 31 to 35 age group. Table 7 below illustrates the breakdown of the age group

representing the population.

Age Group Percentage of total

20 to 25 9%

26 to 30 9%

31 to 35 45%

36 to 40 9%

40 + 27%

Total 100%

Table 7 Age group of respondents

The vast majority of employees (82%) fall into the age group of 31 years and older

and exposed to more than one work environment in their working careers.

The latter, established during the interviews, in which one of the questions asked

was how many different companies they had worked for before they joined the

present company.

The average number of companies that the employees had worked for before they

joined was four. From this result, we can conclude that the employees had work

experience from other companies, and can compare current and previous

experiences.

[44]

Years of service with company

The company has a wide variety of employees in terms of years of service. The

average within the sales team at present is six years. This is very good as there are

two employees with less than one year’s service in the company. The new

employees have different expectations than the older employees.

Older employees tend to take certain things for granted as they have been with the

company for some years. The newer employees will see everything in a new light

and compare it to what is out there in the market place. Table 8 below shows the

distribution of the employee’s years of service in the company.

Years of Service Percentage of Total

Less than 3 Years 36%

3 to 5 Years 27%

6 to 10 Years 9%

More than 10 years 27%

Total 100%

Table 8 Distribution of years’ service

4.5. What are the process and structure of the PMS

The company does not have an official performance measurement system and the

questionnaire design was to test if the employees had an idea of what a performance

measurement system is. The participants were asked if some of the criteria of a PMS

had actually been implemented in the organisation.

Question one dealt with whether the employees knew what a PMS was. The mean

score to this answer was 3.91 with a mode of 4. From this response, it is clear that

the majority of the employees know what a PMS is as the mode of 4 represents that

the majority of the employees are in agreement on this question.

[45]

Understanding of PMS

i. Employees understanding of what a PMS is.

Figure 17 Employees understanding of PMS

The frequency table also shows that 72.7% of respondents agree that they

understand the term “performance management”. The total of agree and

strongly agree is 81.8%. The response rate of 81.8% gives validity to the rest

of the questionnaire as the questionnaire centres around the fact that the

respondent has a fair understanding of the concept.

Understanding of performance management

Frequency Percent Valid Percent

Cumulative Percent

VALID Neither Agree nor Disagree

2 18,2 18,2 18,2

Agree 8 72,7 72,7 90,9 Strongly Agree 1 9,1 9,1 100

Total 11 100 100 Mean 3,91 Median 4 Mode 4 Std. Deviation

0,539

Table 9 Understanding of performance management

[46]

Involvement of employees in performance management planning

The planning side of performance management was dealt with in questions 3,4,8,9

and 10. These questions established if the employees had been involved with or

consulted in the performance management process.

i. Agreement on targets by employee

Figure 18 Agreement on targets set

The percentage of participants that strongly disagree and neither nor disagree is

54.5% and the rest falls into the category of agree to strongly agree (45.5%). The

finding is that more than 50% is unsure if they are involved in the process.

If targets are set, all the employees need to agree on targets set, if not done in this

manner it can affect the performance of the company as a whole.

[47]

ii. Consultation on targets to be achieved

Figure 19 Consultation on targets achieved

Question 4 asked if the employees were involved in or consulted on, targets to be

achieved. This is important because if employees are not consulted or do not

participate in setting targets, they will not take ownership of them

This question had a mean of 3.36 and the mode was 3. As the graph above

indicates, more people neither agree nor disagree than agree. 54.5% of the

employees said that they either strongly disagree or neither agree nor disagree. The

Agreement on targets set Frequency Percent Valid Percent Cumulative Percent

Valid Strongly Disagree 2 18,2 18,2 18,2

Neither Agree nor Disagree

4 36,4 36,4 54,5

Agree 4 36,4 36,4 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 3,18

Median 3,00

Mode 3

Std. Deviation

1,250

Table 10 Agreement on targets set

[48]

finding is that more than 50% indicated they were not consulted on targets to be

achieved.

Employee participated in setting of targets

Frequency Percent Valid Percent

Cumulative Percent

VALID Strongly Disagree 1 9,1 9,1 9,1 Neither Agree nor

Disagree 5 45,5 45,5 54,5

Agree 4 36,4 36,4 90,9 Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 3,36 Median 3,00 Mode 3 Std. Deviation

1,027

Table 11 Employee participated in setting targets

iii. Employees’ knowledge of their key performance indicators

This question asked whether the employees knew what their KPIs were.

Figure 20 Employees knowledge of their KPI

From the frequency table it is clear that 72.8% of the respondents do not know what

their KPI are. If the employee does not know his or her KPI, how can the employee

work towards a goal in the workplace?

[49]

iv. Agreements reached on KPIs

.

Figure 21 Agreement reached on KPIs

This question leads on from the previous question. Here the question asked was

whether the employee had agreed on any KPI. It is apparent from the answers to the

previous question that more than 70% did not know what their KPI were

Employee KPI Knowledge Frequency Percent Valid Percent

Cumulative Percent

VALID Strongly Disagree 3 27,3 27,3 27,3

Disagree 2 18,2 18,2 45,5

Neither Agree nor Disagree

3 27,3 27,3 72,7

Agree 2 18,2 18,2 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 3,45

Median 4,00

Mode 4

Std. Deviation 1,368

Table 12 Employees knowledge of their KPI

[50]

This question had a similar result; the frequency table shows that 81.8% of

employees have not agreed on any KPI with management. The mean score is lower

than the previous question, at a mean of 2.64.

This result indicates that the employees did not agree on the setting of KPI by

management. If employees do not know how they are measured, it is difficult to

improve or measure yourself in the workplace

Employee agreement on KPI Frequency Percent Valid Percent Cumulative Percent

VALID Strongly Disagree 3 27,3 27,3 27,3

Disagree 3 27,3 27,3 54,5

Neither Agree nor Disagree

3 27,3 27,3 81,8

Agree 1 9,1 9,1 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 2,64

Median 3,00

Mode 1

Std. Deviation

1,362

Table 13 Agreement reached on KPI

[51]

v. Performance bonus and KPI

Figure 22 Performance bonus and KPI

The researcher has already established that the employees do not know what a KPI

is and/or have not agreed on their KPI. If they do not know, what a KPI is or agreed

on the specific KPI for their work environment, then it is likely that this question will

have the same result as the previous two questions.

The result is that 72.7 believe that their KPI has no bearing to their yearly bonuses.

This implies that the employees believe that the bonus is something that they are

entitled to, regardless of how they perform during the year.

Performance bonus and KPI Frequency Percent Valid Percent

Cumulative Percent

VALID Strongly Disagree 3 27,3 27,3 27,3

Disagree 3 27,3 27,3 54,5

Neither Agree nor Disagree

2 18,2 18,2 72,7

Agree 2 18,2 18,2 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 2,55

Median 2,00

Mode 1

Std. Deviation 1,368

Table 14 Performance bonus and KPI

[52]

4.6. How is the performance of sales employees measured?

How does the employee receive feedback

How the performance of sales employees is measured relates to feedback and

whether any feedback is given to the employees. The employee needs to have

regular feedback from management to know how his or her performance measures

up against expectations.

i. Performance feedback from management

Figure 23 Performance feedback from management

The answers to question 6 dealing with performance feedback from management

show that 54.5% of employees agree that they are getting feedback from

management on their performance. However, 27.3% believe they do not get

feedback and only 18.2% are not sure.

The result of 54.5% is not satisfactory as this is an important part of a PMS, and

communication with employees is vital for the system to be successful.

[53]

Performance feedback from management Frequency Percent Valid Percent

Cumulative Percent

VALID Strongly Disagree 1 9,1 9,1 9,1

Disagree 2 18,2 18,2 27,3

Neither Agree nor Disagree

2 18,2 18,2 45,5

Agree 3 27,3 27,3 72,7

Strongly Agree 3 27,3 27,3 100,0

Total 11 100,0 100,0

Mean 3,45

Median 4,00

Mode 4

Std. Deviation 1,368

Table 15 Performance feedback from management

ii. Negative feedback

Figure 24 Negative feedback only

This question deals with the whether the employees receive feedback only when

they failing. The frequency table shows that 91% believe that they receive feedback

only when they fail and 9% say they are not getting feedback only when they fail.

Employees need feedback not only when they fail but also when they perform

normally.

[54]

This result shows the absence of feedback given to the employees about

performance on a regular basis. The employee need this if employee’s engagement

levels need to be elevated in the organisation.

Negative feedback only Frequency Percent Valid Percent

Cumulative Percent

VALID Disagree 1 9 9 9

Neither Agree nor Disagree

3 27,3 27,3 36,4

Agree 2 18,2 18,2 54,5

Strongly Agree 5 45,5 45,5 100,0

Total 11 100,0 100,0

Mean 4,00

Median 4,00

Mode 5

Std. Deviation

1,095

Table 16 Negative feedback only

iii. Recognition of work performance

Figure 25 Recognition of work performance

[55]

This question deals with the opposite of negative performance. Employees need to

know that management recognises when they have done well in the workplace.

The frequency table shows that 54.6% believe that management recognises strong

work performance. The results are not as conclusive as the previous question, which

rendered a 91% frequency rate. Although the result is 54.6%, it should be higher

because this shows that the rest do not believe that management recognises strong

work performance.

Recognition of work performance Frequency Percent Valid Percent

Cumulative Percent

VALID Strongly Disagree 1 9,1 9,1 9,1

Neither Agree nor Disagree

4 36,4 36,4 45,5

Agree 3 27,3 27,3 72,7

Strongly Agree 3 27,3 27,3 100,0

Total 11 100,0 100,0

Mean 3,64

Median 4,00

Mode 3

Std. Deviation

1,206

Table 17 Recognition of work performance

4.7. What is the impact of PMS on the engagement levels of employees

This question measured the engagement levels of the employees and can be

categorised under the following headings:

Work environment

Leadership

Team and co-worker

Wellbeing

[56]

How does the employee feel about work and the environment he/she is

working in?

Inspired to reach goals set

Figure 26 Employee inspired to meet goals

The question asked was whether the employee was inspired to reach the goals set.

The goals were set without consultation. The employees feel that they are

achievable as they are inspired to achieve the goals set. More than 90% of the

employees are inspired to reach the set goals. This can be attributed to the good

communication the employees has with their immediate manager.

I am inspired to meet my goals at work

Frequency Percent Valid Percent

Cumulative Percent

Valid Neither Agree or Disagree

1 9.1 9.1 9.1

Agree 5 45.5 45.5 54.5

Strongly Agree 5 45.5 45.5 100.0

Total 11 100.0 100.0

Mean 4.36

Median 4.00

Mode 4

Std. Deviation

.674

Table 18 Inspired to achieve goals

[57]

Work environment

The work environment questions were questions 13, 14 and 17.

i. Employee feel absorbed in work activities

Figure 27 Employee feel absorbed in work activities

As the frequency table indicates, it is more than apparent that the salespeople at the

company feel very involved in their work. The frequency table shows that 90.9% of

employees are completely involved in their work. Only 9.1% was not sure. This

question was not investigated further as the questionnaire was quite conclusive at

90.9%

Employee involved in work Frequency Percent Valid Percent

Cumulative Percent

Valid Neither agree nor disagree

1 9,1 9,1 9,1

Agree 8 72,7 72,7 81,8

Strongly Agree 2 18,2 18,2 100,0

Total 11 100,0 100,0

Mean 4,09

Median 4,00

Mode 4

Std. Deviation

,539

Table 19 Employee involvement in work activities

[58]

ii. Employee excited about going to work

Figure 28 Employee excited about going to work

This question dealt with the content of the work. This has to do with whether the

work is exciting or boring. It is one thing to be involved in your work but the work

itself needs to stimulate the person doing it. The frequency data shows that 54.6%

agree or strongly agree that the work excites them, but 36.4% are not sure and 9.1%

are very bored.

Excited about work Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 1 9,1 9,1 9,1

Neither agree nor disagree

4 36,4 36,4 45,5

Agree 2 18,2 18,2 63,6

Strongly Agree 4 36,4 36,4 100,0

Total 11 100,0 100,0

Mean 3,73

Median 4,00

Mode 3

Std. Deviation

1,272

Table 20 Employee excited about work

[59]

iii. Effort employees put into work

Figure 29 Effort employees put into work

Question 17 asked about the commitment of the employee to the work; that is, when

they are at work, are they determined to give their best? The answers show that

100% of all employees either agree or strongly agree that they give their best.

Effort employees put into work Frequency Percent Valid Percent

Cumulative Percent

Valid Agree 6 54,5 54,5 54,5

Strongly Agree 5 45,5 45,5 100,0

Total 11 100,0 100,0

Mean 4,45

Median 4,00

Mode 4

Std. Deviation

,522

Table 21 Effort from employee toward work

[60]

iv. Employee focus on work

Figure 30 Employee focus on work

This question complements the previous questions and, with the result shown, it is

apparent that the employees are extremely focused on their work. The frequency

table shows that 90.1% agree or strongly agree that they are focused on the work at

hand.

Employee focuses on work Frequency Percent Valid Percent

Cumulative Percent

Valid Neither agree nor disagree

1 9,1 9,1 9,1

Agree 6 54,5 54,5 63,6

Strongly Agree 4 36,4 36,4 100,0

Total 11 100,0 100,0

Mean 4,27

Median 4,00

Mode 4

Std. Deviation

,647

Table 22 Employee focused on work

[61]

Leadership

The leadership questions were questions 26 to 27

i. Communication between senior management and employees

Figure 31 Communication between senior management and employees

The frequency shows that only 18.2% of the employees are satisfied with the

leadership’s communication with them. The majority, 81.8%, was not sure or

disagreed with this statement. The leadership should engage employees through

their actions. Attention is needed in this regard urgently.

[62]

Communication between senior management and employee

Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 3 27,3 27,3 27,3

Disagree 2 18,2 18,2 45,5

Neither agree nor disagree

4 36,4 36,4 81,8

Strongly Agree 2 18,2 18,2 100,0

Total 11 100,0 100,0

Mean 2,64

Median 3,00

Mode 3

Std. Deviation

1,433

Table 23 Communication between senior management and employees

ii. Decision-making power

Figure 32 Decision-making power

Leaders need to trust and empower the employees and one way of doing this is to

give the employee accountability through being able to make decisions with regard

[63]

to his or her work. The results show that 54.6% believe they have the authority to do

this, while 27.3 are not sure. Leadership needs to make sure that the employees are

empowered to perform the task.

Decision-making power Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 1 9,1 9,1 9,1

Disagree 1 9,1 9,1 18,2

Neither agree nor disagree

3 27,3 27,3 45,5

Agree 3 27,3 27,3 72,7

Strongly Agree 3 27,3 27,3 100,0

Total 11 100,0 100,0

Mean 3,55

Median 4,00

Mode 3

Std. Deviation

1,293

Table 24 Decision-making power

iii. Communication between employee and direct manager

Figure 33 Communication between employee and direct manager

[64]

The communication between management and the direct manager/supervisor is

different in the company. The employees were not happy with the communication

between management and themselves, but the communication between the

employees and their direct manager was far better, with a 90.1% agree or strongly

agree that the communication is open and always present.

Communication between employee and direct manager

Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree

1 9,1 9,1 9,1

Agree 6 54,5 54,5 63,6

Strongly Agree 4 36,4 36,4 100,0

Total 11 100,0 100,0

Mean 4,09

Median 4,00

Mode 4

Std. Deviation

1,136

Table 25 Communication between employee and direct manager

[65]

Team and co-worker

The team and co-worker questions were questions 14, 19, 20, 21, 22 and 23.

i. Employees’ understanding of role in business

Figure 34 Employees’ understanding of role in business

The question to the employees asked was, whether they understood what their role

was in the business and not only in their department. It is important for employees to

see the big picture and understand that their actions have consequences for the rest

of the company.

If employees do not understand this, they can feel isolated and not think about the

consequences of their actions. The results were that 90.1% of all employees

understood their role in the business.

[66]

Employees’ role in business Frequency Percent Valid Percent

Cumulative Percent

Valid Neither agree nor disagree

1 9,1 9,1 9,1

Agree 6 54,5 54,5 63,6

Strongly Agree 4 36,4 36,4 100,0

Total 11 100,0 100,0

Mean 4,27

Median 4,00

Mode 4

Std. Deviation

,647

Table 26 Employees’ understanding of role in business

ii. Employee resistance to change

Figure 35 Employee resistance to change

The following questions are all related and a total picture of the employees’

perception of teamwork is evident in the results. Question 19 asked if the employees

adapted quickly to difficult situations. The results show that 81.8% do not believe that

their co-workers are able to change or, otherwise stated, the employees are very

resistant to change in the workplace

[67]

Employee resistance to change Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 2 18,2 18,2 18,2

Disagree 3 27,3 27,3 45,5

Neither agree nor disagree

4 36,4 36,4 81,8

Agree 1 9,1 9,1 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 2,64

Median 3,00

Mode 3

Std. Deviation

1,206

Table 27 Employee resistance to change

iii. Employee commitment to company

Figure 36 Employee commitment to company

The employee’s commitment to the company and willingness to keep on going even

though times are not good shows how engaged they are. Question 20 shows that

63.6% of the employees believe that their co-workers are not committed to the

business.

[68]

Employee commitment to company Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 1 9,1 9,1 9,1

Disagree 1 9,1 9,1 18,2

Neither agree nor disagree

5 45,5 45,5 63,6

Agree 3 27,3 27,3 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0 Mean 3,18

Median 3,00

Mode 3

Std. Deviation

1,079

Table 28 Employee commitment to company

iv. Employee proactive in identifying opportunities

Figure 37 Employee proactive in identifying opportunities

Employees that come across engaged will be highly proactive in the company in

identifying opportunities to enhance the company position in the market place. The

results were that only 27.3% agree to this statement and the rest were not sure or

disagree with this statement. Employees need to be more proactive in the company;

otherwise, the company will be stagnant

[69]

Employee proactive in identifying opportunities

Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 2 18,2 18,2 18,2

Disagree 3 27,3 27,3 45,5

Neither agree nor disagree

3 27,3 27,3 72,7

Agree 3 27,3 27,3 100,0

Total 11 100,0 100,0

Mean 2,64

Median 3,00

Mode 2

Std. Deviation

1,120

Table 29 Employee proactive to identify opportunities

v. Employees assisting others in workplace

Figure 38 Employees assisting others in workplace

Question 22 dealt with the employee’s willingness to assist others in the workplace.

This is important as this gives the feeling of belonging and that others care. The

results show that 90.1% of the employees do not believe that their co-workers are

willing to assist them if need be. This is not healthy as this can break down the

communication between employees and result in a collapse or neglect of functions

that are important to the company.

[70]

Employees assisting others in workplace

Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 2 18,2 18,2 18,2

Disagree 1 9,1 9,1 27,3

Neither agree nor disagree

4 36,4 36,4 63,6

Agree 3 27,3 27,3 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 3,00

Median 3,00

Mode 3

Std. Deviation

1,265

Table 30 Employees assisting others in workplace

vi. Employee willingness to go the extra mile

Figure 39 Employee willingness to go the extra mile

The answers to this question show the employees’ perception of their co-workers’

willingness to take on new tasks or, otherwise stated, to go the extra mile for the

company. The results show that only 36.4% believe that their co-workers will go the

extra mile. The problem is that if people do not see their co-workers are willing to do

extra, they tend to withdraw and become complacent. The company needs to have

[71]

employees who are willing to do extra; engaged employees are willing do extra for

the company.

Employee willingness to go the extra mile

Frequency Percent Valid Percent

Cumulative Percent

Valid Strongly Disagree 2 18,2 18,2 18,2

Disagree 1 9,1 9,1 27,3

Neither agree nor disagree

4 36,4 36,4 63,6

Agree 4 36,4 36,4 100,0

Total 11 100,0 100,0

Mean 2,91

Median 3,00

Mode 3

Std. Deviation

1,136

Table 31 Employee willingness to go the extra mile

Wellbeing

The wellbeing questions were questions 24, 32 and 33.

i. Compensation package

Figure 40 Compensation package

[72]

This is extremely important, as can be seen from the literature. Employee wellbeing

is one of the key factors that contribute to employee engagement levels in the

workplace.

Question 24 asked employees if they were satisfied with their compensation

packages. Compensation is important because if people are not content with their

compensation package they do not focus on their work.

The results show that the respondents are generally satisfied with their

compensation, as only 9.1% totally disagree that the compensation package are

correct. The rest are neutral or agree that their packages are sufficient.

Compensation package Frequency Percent Valid Percent

Cumulative Percent

Valid Disagree 1 9,1 9,1 9,1

Neither agree nor disagree

5 45,5 45,5 54,5

Agree 4 36,4 36,4 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 3,45

Median 3,00

Mode 3

Std. Deviation

,820

Table 32 Compensation package

[73]

ii. Safe work environment

Figure 41 Safe work environment

This question dealt with a safe work environment. This is important as a basic

requirement. People need to feel that the workplace is safe; otherwise, they work in

fear that they might be injured. The results indicate that 90.1% believe the workplace

is safe.

Safe work environment Frequency Percent Valid Percent

Cumulative Percent

Valid Neither agree nor disagree

1 9,1 9,1 9,1

Agree 9 81,8 81,8 90,9

Strongly Agree 1 9,1 9,1 100,0

Total 11 100,0 100,0

Mean 4,00

Median 4,00

Mode 4

Std. Deviation

,447

Table 33 Safe work environment

[74]

iii. Job Security

Figure 42 Job security

The last question was whether employees felt that their work was secure in that they

had job security. The results show that 90.1% believe they have job security. This is

important in terms of getting employees motivated.

Job Security Frequency Percent Valid Percent

Cumulative Percent

Valid Neither agree nor disagree

1 9,1 9,1 9,1

Agree 8 72,7 72,7 81,8

Strongly Agree 2 18,2 18,2 100,0

Total 11 100,0 100,0

Mean 4,09

Median 4,00

Mode 4

Std. Deviation

,539

Table 34 Job security

[75]

5. CONCLUSION

5.1 Introduction

The researcher can draw the following conclusions from the findings detailed in the

previous chapter:

5.2.1 The processes and structures of PMS

i. Understanding of PMS.

The company’s sales employees do have a good understanding of what a PMS is or

what it should be. Although the company does not have an official PMS in place, the

employees had exposure to this at other companies that they have worked.

However, the results gathered reveal that the company does not have a clear PMS

in place, or if it does, the employees are not involved in it or are not aware of it. The

structure of a PMS needs to be clear and made available to the employees so that

every employee can start to work towards the end goals set by management.

ii. Involvement of employees in performance management planning

In light of the definition of a PMS, refer chapter 2, the conclusion is made that, PMSs

are based on management reaching an agreement with the employees on how the

work that should be done and not on the employer commanding the employees to do

the work in a certain way.

The results of the questionnaire indicated that the employees were not consulted on

the setting of targets and nor did they agree on any targets with management. If

employees are not involved in the setting of the targets or consulted, the employee

will not take ownership of this process and, as the literature indicates, it is important

for the employees to be involved, otherwise, the system will fail.

[76]

iii. How does the employee receive feedback?

Employees need to receive regular feedback from management regarding their

performance. Employees who do not receive this feedback tend to think the work

they are doing is sufficient or feel unappreciated by the organisation

Questions 6, 7 and 12 dealt with this section and, from the results gathered, it is

clear that the employee do not get regular feedback from management. Feedback to

employees is a critical part of the system and, with only 54.5% reporting that, they

receive regular feedback from management on their performance; the system seems

to be failing the employees and the company.

Employees cannot receive feedback only when they fail, but the results show that

91% indeed get feedback only when they fail. In continuity with this, in terms of the

recognition of work performance, the information shows that 54.6% believe that

management does not recognise the work performance of employees.

Employees in the company do not get the necessary feedback needed to engage

and inspire them to perform at their peak. The conclusion is that the company does

not have a proper system to give feedback to the employees.

The employees are at a disadvantage because they never have a clear idea of

where and when they are underperforming or performing well. Due to this lack of

communication, the employer is losing the opportunity to utilise the full potential of

the employees.

5.2.3. What is the impact of a PMS on the engagement levels of employees?

There were several factors identified that influence the engagement levels of

employees in the workplace. The study done by (Anitha, 2013) identified four factors

that have a positive impact on engagement levels.

[77]

These factors were tested to identify the engagement levels. The employees’

positive responses indicated that their engagement levels were high and negative

responses indicated low engagement levels.

i. Work environment

Management can facilitate a positive and healthy work environment by displaying

concern for the needs and feelings of employees. Management needs to provide

positive feedback to and encourage employees to raise their concerns without fear of

victimisation. Management also needs to encourage employees to develop new

skills and assist them in solving work-related problems.

The response to the work environment questions was exceedingly positive and the

researcher can therefore conclude that the employees are satisfied with the work

environment.

ii. Leadership

Research studies (e.g. Wallace and Trinka, 2009) have shown the value of

leadership to engagement levels in the workplace. Engagement occurs naturally

when leaders are inspiring.

Leaders are there to encourage and communicate to the employee the importance of

the work they are doing and how they contribute to the success of the firm.

Employees will be more engaged in the workplace if they have a sense of belonging

and importance. This is the function of the leader.

Leadership is necessary in every company and is one of the factors that influence

the engagement levels of the employee. Employees look for leadership in both good

and tough times. Leadership questions tested the communication between

management and the employees, and the degree to which management allows

employees to make decisions in their day-to-day work. This is important because it

shows that management has faith in the employees.

[78]

The communication between management and the employees was divided into two

questions. The one dealt with management in general and the other with the direct

manager in department.

The results show that the direct manager has a better communication style or

approach because more than 90% of employees feel the communication between

the direct manager and the staff is open, and this promotes higher engagement

levels with the employee. This gives the employees confidence to approach the

manager or leader to discuss any problem they might have.

These results highlight the need for transformation in the business. Managers and

employees need to be able to communicate openly with each other without fear of

retaliation or victimisation. The problem is that this is not the case with the upper

management of the company and this need to be resolved.

iii. Team and co-workers

Trusting interpersonal harmony with other co-workers is important in the workplace.

This, combined with a supportive team, promotes employee engagement. The

supportive environment encourages employees to try new things and they need to

know that even if they fail they do not have to fear the consequences. Locke and

Taylor argue that if employees have a positive interpersonal interaction with their co-

workers, they will find greater meaning in their work and will be more engaged in the

workplace.

The responses to all the questions dealing with team and co-worker relationships

show that the employees in the company struggle to trust and believe in each other.

There is most definitely not a lot of trust between the team members. The sales

environment is dependent on teamwork and trust, such as trusting that the other

person will do what he she said he or she would do. Without the trust factor, the

company stands a chance of not being as productive as it might be because the

employees’ engagement levels will be affected negatively.

[79]

Wellbeing

This holistic factor enhances employee engagement. Research has found a positive

association between work engagement and psychological wellbeing, job satisfaction

and intent to remain (Koyuncu et al., 2006), organisation- based self-esteem (Mauno

et al., 2007) and higher levels of performance (Hallbergand Schaufeli, 2006; Saks,

2006; Schaufeli & Bakker, 2004; Wefald and Downey, 2009).

Wellbeing therefore becomes the most important measure for gauging the influence

a firm has on its employees. Researchers at Towers Perrin Talent Report (2003)

found that if management is truly interested in the employees’ wellbeing, this

translates into an important driver of engagement.

The employees were asked about their perception of their compensation, job

security and the safety of work environment. The respondents were reasonably

satisfied with these factors. Job security in the current economic climate is highly

important because if people do not feel that their job security is good they will start

looking for new opportunities and engagement levels will come down as commitment

to the work will not be a focus point for the employee.

5.3 Recommendations

5.3.1. The processes and structures of the performance management systems

From the literature, it is clear that a PMS is necessary to engage employees in the

workplace. This is unfortunately not an easy task and a generic PMS will not work in

every environment. One of the major challenges faced by businesses today is to

know what would be the most appropriate performance management and

measurement system to adopt (Yadav, et al., 2013, p. 948).

[80]

The BSC has changed the way companies do performance management and is still

the most widely used performance management measurement used in the world. A

survey done in 2011 found that more than 54% of the 1,230 global firms sampled

reported that they had used the BSC as a management tool (Perkins, et al., 2014).

Based on the literature on this topic and the research done with the employees, this

researcher recommends the implementation of the BSC 1.1 (Perkins, et al., 2014)

that were developed in 1992 by Kaplan and Norton and which evolved over time.

The reasoning behind this recommendation is that in the sales environment

objectives need to be measured on an ongoing basis in relation to new targets and

the initiatives implemented to achieve these objectives. This all need to coincide with

the vision and strategy of the company

Caution need to be taken with the implementation of the BSC as a PMS because,

according to Neely and Bourne, 70% of all BSCs fail due to inappropriate design and

companies find it difficult to implement for various reasons (Neely & Bourne, 2000).

It is therefore advisable for the company to implement a formal PMS on a trial basis

with the sales team as the test subject. If the PMS is successful, it can be

implemented in the rest of the company.

The PMS is not of value for this division only but for business in general.

Management tend to stick to what they know and implementing a PMS is not only

time consuming but is also difficult to maintain, especially if the manager does not

have a so-called “road map” to guide him or her. It is recommended that:

All the employees must be educated about how the PMS will be implemented

and what is expected of them

All the employees must be informed about what the employer wishes to

accomplish with the PMS

Weekly follow-ups and scoring must be done to measure the progress the

employees have made

[81]

Feedback must be given on a monthly basis to the employees and areas of

concern will be addressed

The employees must complete the research questionnaire again after a year

has elapsed to determine their levels of engagement.

The results should be compared with the original responses to see if the

motivation levels and productivity have improved with the adoption of the

PMS.

The employees should be consulted about the KPIs that needed to be set. The KPIs

must be measurable and based on the value chain of the company.

Care must be taken that KPI addressing the following, are identified:

i. Learning and growth

The employees set goals on what they want to achieve with regard to learning. This

was formal learning and set with specific objectives in mind.

ii. Internal business processes

All the employees need to adhere to the internal business processes of the company

and here the focus was on following procedures and administration.

iii. Customer

The focus is on the visits made, the quality of reporting and the planning of the visits

for the quarter. This is a plan the employees submit on a quarterly basis and

measurement is on achieving the desired result.

iv. Financial

The financial KPI focuses on achieving set targets for expenses and managing the

promotional account that they need to achieve the correct budget.

[82]

5.3.2. The impact of a PMS on the engagement levels of employees

Employees are grouped into three different categories or levels of engagement,

namely:

i. Engaged employees:

These are the employees that will “go the extra mile”. They are constantly

striving to give excellence in their work and perform constantly at high levels

ii. Not engaged employees:

These employees are the ones that will do what they are told, they will not “go

the extra mile” they cannot be classified as negative but also not as positive

toward the company. The not engaged employee, is the one that does only

enough not to be fired

iii. Actively disengaged employee:

This employee finds reasons to be unhappy. They act out their unhappiness

at work and are a real danger to have in the workplace, as they tend to

influence the other employees negatively (Sanford, 2002).

Performance management needs to address and improve employee engagement.

According to Rock (Rock, et al., 2013) about 86% of companies are not happy with

performance management today. The sales employees need to be highly motivated

to ensure that the company keeps on growing in the future. The research done

indicates where management can change and improve. The sales environment is a

dynamic and constantly changing environment that needs to be measured,

monitored and changed as the environment changes.

The current feedback ranges from non-existent to very low and this needs to be

addressed if the PMS is to be successful. Feedback needs to be specific and focus

should be on the achievement of the KPIs set by management and employee

together. There needs to be a forum in which the employer can communicate with

and inform the employees on a one-on-one basis with regard to past performances

and what he or she expects from the employee in the future.

[83]

Corrective action to be decided on and non-performance needs to be addressed so

that the employee can correct his or her actions. The PMS should not implement to

“catch the employee out” The PMS needs to be seen as an extra weapon the

employee has to improve the service he or she delivers to the customer and

employer. The employer in turn needs to use the PMS as a motivational tool to

encourage employees to reach and exceed the goals they set out to achieve. A PMS

implemented with this mind-set, can only result in a win-win effect for both employee

and employer.

Without a PMS in place, feedback is only the perception of the manager and it is

very difficult to measure and compare the performances of the employees.

Feedback is not only important because it is part of a PMS; it is important as a tool to

communicate effectively with all employees on a regular basis. Feedback therefore

needs to be ongoing and on a regular basis. In the beginning the feedback needs to

be once a week, until all the employees feel comfortable with the new system. Once

the employees have confidence and trust the system, monthly feedback reviews are

held with the employees.

5.3.3. Integrated recommendations

The performance management systems will be successful implemented if top

management ensures that the performance review sessions focus on KPI and

address non-performance when it becomes necessary. The KPI of an organisation

changes as the environment and the internal processes of the organisation change.

These changes will surface when review sessions are done on a regular basis.

Engagement levels of employees need to be regular tested. Twice a year in the

beginning until employee and employer is satisfied with the outcome or the PMS.

Engaged employees will score higher on PMS and this will be another indication if

the employee feel engaged or not. The engagement of employees and PMS is one

integrated system unit. The one will complement the other.

[84]

5.4 Significance of the research

The significance of this study is far reaching. It will assist the company in achieving

the goals set out by management for the future of the company. The company’s

management team has been with the firm for more than 26 years and has built up

the company over time.

However, managements and companies need to evolve and compare their methods

with developments in the marketplace. What worked in the past is not always going

to work in the future and with businesses, competing in the global market the only

competitive edge the company has is the people working for it.

This study can show the rest of management that it is worth investigating what the

employees views are about the workplace.

The company of the future will be one that can lead the employees through tough

times and still have a highly engaged work force. High staff turnover is not good for

any company because with staff leaving the company, the skills and experience they

have leave the company with them – and experience is an extremely valuable asset

in companies today.

5.5 Further research and lessons learned

Research on the engagement levels of employees over time and its connection with

staff turnover. This can have value if the results are positive because engaged

employees are less likely to change companies than the employees that are not

engaged.

Research also needs to be done on other factors that influence the employees’

engagement levels and this will further enable the company to make better decisions

in its endeavour to engage the workforce.

[85]

Research post-implementation of the PMS and this will provide more insight into the

engagement levels of the employees. Current revenue and growth compared to that

of the future, and evidence that is more conclusive can be made available to

strengthen the argument for implementing PMS in the workplace.

The lessons learnt in this study are that research is the only tool that gives an

accurate and true reflection of what people think. The researcher went into this study

with an unrealistic idea of the state and level of engagement in the workplace. This

was proven incorrect and the information learnt will prove valuable when making the

correct decisions regarding the company and the employees. Employees are the

most valuable asset of any company and with the correct engagement levels; a

company can have a competitive advantage over its competitors.

[86]

ANNEXURE A: LETTER TO RESPONDENT

DATE: 02 October 2014

Dear Respondent

I am currently conducting research towards my Master’s degree of Business

Administration at the Nelson Mandela Metropolitan University (NMMU). The focus of

the research is to determine if a performance management system will influence

employee engagement in the company.

The research will attempt to establish how engaged employees are in the company

and what the employee understanding is about a performance management system

and what system is in place at the moment.

To this effect you will be asked to complete a questionnaire and if we need to

investigate more, we will have a focus group to investigate the topic further. The

questionnaire consist of a series of questions that you need only tick the appropriate

box as per example below.

Strongly Disagree

Disagree Neither agree or disagree

Agree Strongly Agree

You are assured that that your responses to the questionnaire will be kept strictly

confidential and no link will be formed between your identity and your responses.

I thank you in advance for your cooperation and should you have any queries or

concerns, please contact me directly.

Please note also that your participation in this study is entirely voluntary and that you

have the right to withdraw from the study at any stage. Your participation in the

study therefore indicates verbal consent.

Kind Regards

Willie Brewis

[87]

ANNEXURE B: Questionnaire

a) What are the processes and structures of performance systems

1. I know what a performance is management system is

1 2 3 4 5

Strongly Disagree

Disagree

Neither agree nor disagree

Agree Strongly Agree

2. I have had regular feedback on my performance

3. I have agreed on the performance targets set by management

4. I have been consulted on targets to be achieved

5. I have confidence in achieving the targets set

6. I receive regular feedback from management with regard to performance

7. I only get feedback when I have failed

8. I know what my KPI are

9. I have agreed on the KPI’s

10. My KPI’s are linked to my performance bonus

11. I am inspired to meet my goals at work

12. Management within my organization recognizes strong job performance

13. I feel completely involved in my work

14. understand how my work impacts the organization's business goals

15. I get excited about going to work.

16. I am often so involved in my work that the day goes by very quickly

17. I am determined to give my best effort at work each day

18. When at work, I am completely focused on my job duties

19. In my organization, employees adapt quickly to difficult situations

20. Employees here always keep going when the going gets tough

21. Employees proactively identify future challenges and opportunities

22. Employees in my organization take the initiative to help other employees

when the need arises

23. Employees here are willing to take on new tasks as needed

24. I am satisfied with my overall compensation

25. I am compensated fairly relative to my local market

[88]

26. Communication between senior leaders and employees is good in my

organization

27. I am able to make decisions affecting my work

28. My supervisor and I have a good working relationship

29. My co-workers and I have a good working relationship

30. Senior management and employees trust each other

31. Employees treat each other with respect

32. My organization has a safe work environment

33. I am satisfied with my overall job security

[89]

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