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A CASE STUDY AT THE NATIONAL STATISTICS OFFICE
There are many conflicting and diverging views on the effectiveness of Performance Appraisals in private enterprises, moreover in the public service. The sustainability of organisations and the importance of this function thrive on operational vitality. However, there is little evidence that operations in the public sector are influenced by the actual performance of the employees, specifically when statistics are involved. Considering this scenario, the research was based on an investigation whether operational efficiency in the public sector of Malta through the National Statistics Office can be enhanced through performance appraisals. The prime scope of this study was the evaluation of the present system at NSO.
The literature review findings demonstrated that performance appraisals can contribute positively to the organisation when done in a proper manner and which can also be useful to build relationships with subordinates, plan resources and identify training needs. This process can possibly lead to motivated workforce and furthermore an increase in productivity. Conversely, the process can be criticised as being flawed and basically a waste of time.
To challenge these perceptions and ideas a field research was undertaken at NSO where a survey with managers was undertaken and also another separate one with the rest of the staff. The findings were analysed to examine the views of both parties in this regard which resulted in the system at NSO as being flawed and totally ineffective. The study concludes the recommendations that can be practically applied through the public sector and the NSO. The recommendations include training needs in the regard of performance management to both staff and management, reform of the whole system, and tying the performance appraisal with a reward system.
Since the research purpose and research questions were developed on existing theories and concepts, this research will be deductive. As the purpose of this study is to investigate how Performance Appraisal systems are undertaken at the NSO, the selection of a qualitative approach was found to be more appropriate to fulfill the stated purpose, in view of the fact that case studies are being used, thus requiring the
assessment of abundant information. In addition, this approach is found to be more
useful due to the fact that the research is intended to explore, describe and find as
many detailed and complete information as possible. Albeit the above, a fair share of
quantitative techniques will be adopted to analyse any data provided by the NSO on
the subject matter, e.g. surveys and questionnaires.
Questionnaires were used as a research tool for this study. Questionnaires are an
inexpensive way to gather data from a potentially large number of respondents
(Miles and Huberman, 1994). A well-designed questionnaire that is used effectively
can gather information on both the overall performance of the test system as well as
information on specific components of the system. If the questionnaire includes
demographic questions on the participants, they can be used to correlate
performance and satisfaction with the test system among different groups of users.
Zikmund (2000) claims that the steps required to design and administer a
i. defining the objectives of the survey;
ii. determining the sampling group;
iii. writing the questionnaire;
iv. administering the questionnaire;
v. interpreting the results.
For this study, one questionnaire was designed to be distributed to all NSO
employees excluding the managerial staff and those in higher grades. The
questionnaire comprised fifteen questions. The main aim of this questionnaire was
to gather information about the perception of NSO employees towards the
performance management, measurement and appraisal methods used in this
organisation. Through the questionnaire, the researcher acquired the required data
pertaining to this study, thus reaching its main aim and objectives. Another questionnaire was distributed to NSO managerial staff and those in higher grades. The questionnaire comprised eleven questions. The aim of a separate questionnaire for managerial staff is to compare their perception regarding performance appraisal to the rest of the staff. In the questionnaire there were more comment boxes to allow managers to express their views upon this regard.
1.1 Introduction - The National Statistics Office
The NSO is the official national statistical agency in Malta. It provides statistics on a
wide range of social and economic matters covering the population, the Government
and the business sector. NSO also coordinates and collaborates with the statistical
activities of other official bodies on the island, primarily the Central Bank of Malta
and Government Ministries. The mission of NSO is to serve the statistical
information needs of parliament, government, and the population at large from
businesses to researchers to students, by striving for excellence and through rigorous
protection of confidential data, quality information from respondents and a timely,
objective and responsive statistical service. This does not prevent other government
departments or institutions from collecting their own statistical data for internal
The NSO was established in March 1947, at the time known as the Central Office of
Statistics. However, official statistics has been compiled and published for a long
time before. In 1851, an official publication called 'The Malta Blue Book' was
published among other things; it included a statistical abstract on the population as
from the 1842 Census. In 1872, 'The Malta Blue Book' featured a statistical view of
Malta and its Dependencies for ten preceding years covering the relevant time series
for population, education, finance, sale of public sites, imports, exports and shipping.
The NSO, an independent agency, was established by virtue of the Malta Statistics
Authority (MSA) Act XXIV of 2000 and as from 1 March 2001, it replaced the
Central Office of Statistics - a Governmental Office. Section 10 of the mentioned
Act determines the functions and responsibilities of the NSO.
2.1 DEFINING PERFORMANCE MANAGEMENT
It would be appropriate to analyse the meaning of performance management which hereinafter would be referred to as PM before attempting to discuss its implications and applications.
Armstrong (2009) defines PM as:
"â€¦a systematic process for improving organisational performance by
developing the performance of individuals and teams. It is a means of
getting better results by understanding and managing performance within
an agreed framework of planned goals, standards and competency
(Armstrong, 2009, p.618)
Furthermore, Bacal (1999) defines PM as an ongoing communication process to be
undertaken in partnership, between an employee and his/her immediate supervisor,
establishing clear expectations and understanding.
Performance appraisals being one important part of PM, provides employees and managers with opportunities to discuss areas in which employees excel and those in which employees should improve. The appraisal should be conducted on a regular basis and they need not be directly attached to promotion opportunities and rewards wherever possible (Kirk, nd). However, in its worst form, performance appraisal can have the effect of demotivating the employees and generally lowering the morale throughout the organisation. Therefore, the appropriate design and careful implementation of performance appraisals is crucial and can offer countless benefits to both the organisation and the individual.
2.2 THE RELATIONSHIP OF PERFORMANCE MANAGEMENT WITH HUMAN RESOURCES AND ITS IMPORTANCE
Employees are a valuable resource to the organisation and hence an organisation can mainly achieve operational objectives through the effective use of talents and ability of its employees. In view of this fact, the extent to which the latter are managed effectively is a crucial element in improving and sustaining organisational performance. PM is concerned with improving the performance of the team and the organisation and not only the performance of the individual. Some poorly designed traditional appraisal systems have been indict as being manipulated for the advantage of personnel managers or top managers leading to many people of the organisation not really understanding what the system is trying to achieve. However, some outstanding appraisal systems together with effective personnel managers contribute to organisational effectiveness by establishing long term goals. The PM is a main part of human resources management to managing people and their performance which is in essence a means of setting objectives being mutually reviewed in order to integrate corporate, individual and team objectives.
According to Bratton and Gold (2007), in order that an organisation succeeds in delivering its operational and developmental goals it depends primarily on the efficiency and effectiveness with which the employees carry out their duties. Managers should ensure that the people under their span of control:
have understood what is expected of them
own the skills necessary to deliver what is expected
have the support of the firm to develop their talents to meet those expectations
are given feedback on their performance
are given the opportunity to discuss and contribute to individual and team aims and objectives.
PM has three important functions: Strategic, Administrative and Developmental function.
According to Baron and Armstrong (1998) the PM should be seen as an ongoing process that focuses on the future rather than the past. Therefore, PM should involve aligning HR practices to both current and future performance by identifying employees' activities in line with organisation's goals. In order that this process is done in a strategic manner it should be flexible to keep pace with different goals and the changing nature of the organisation. The PM should be seen as a motivational tool to evaluate salary increases, promotions, retentions and improvement of performance rather than just a box ticking exercise.
Armstrong (2000) stated that the PM should be forward-looking, developmental and a framework provision in which managers can support their team members. This author continues by stating that if the PM is regarded as a transformational process rather than an appraisal one, its impact on results will be much more significant.
2.3 PERFORMANCE APPRAISAL WITHIN THE PUBLIC SECTOR
The general public frequently refer to the operational efficiency in the public sector when referring to the service delivered. Efficiency is a measure of how well resources have been used. This is done by comparing actual output with the expected or standard output that should have been yielded from the use of these resources (Hill, 2000; Brown et al., 2001).
Conversely, Brown et al. (2001) affirm that effectiveness is more useful measure than efficiency. Effectiveness focuses on whether the right products or services are being produced, rather than how efficiently they are produced. Mandl et al. (2008) comment further that effectiveness relates the input or the output to the final objectives to be achieved, i.e the outcome, and shows the success of the resources used in achieving the objectives set.
The question of how to measure performance effectively in ways that improve service delivery is clearly one of the biggest issues in the public management (Behn, 1995). Measuring productivity in the public sector is not an easy task because various qualitative aspects have to be considered in addition to the output of goods and services which is only rarely quantified (de Bruijn, 2001). Performance measurement is about efficiency, quality and effectiveness of human service programmes (Martin and Kettner, 1996). Performance measures should be customer sensitive, emphasizing effectiveness in meeting customer expectations as well as efficiency in service delivery.
2.4 PERFORMANCE MANAGEMENT ACROSS EUROPEAN PUBLIC AUTHORITIES
Over the past years the issues of service delivery, responsiveness, quality and performance management have become very common discussions on the local government. There have been new tasks added to local authorities and existing chores are expected to be performed with distinguished output. Higher expectations of stakeholders bring about qualitative changes in demand and supply for public services. Increasingly, information technology advances are adding to the list of challenges to European authorities and at the same time more pressure from budget cuts because of financial crises.
When discussing PM in the public sector we can conclude that over the past decade there has been a more widespread use of the performance appraisal. The majority of Europe has some scheme in operation. However, Performance Appraisal is more extensively used in the private sector than the public authorities. Germany and Britain have had traditional and standardized PM for quite a long time now however, there have been reforms so as Performance Appraisal is an appropriate tool for improvement of government staff motivation. After 1998, France also gave more importance to Performance Appraisal by introducing new schemes. Denmark considers the scheme more important and consequently each employee has a yearly discussion with its manager in order to improve motivation for career development. The Danish system differs from other European systems as the procedure consists in a dialogue with the objective to identify developmental possibilities. This type of dialogue has been compulsory since 1993 as a part of HRM reforms. The Finish government used PM since early 1900's and consequently the system aims as increasing the operating efficiencies of Finland's government agencies and institutions. Tethering performance to results has helped the Finnish government to institute performance related pay for staff and encourage staff to improve their productivity. This has been highly effective as reports resulted in operational efficiency and increasingly economy oriented thinking. Finland recognized that it was far more realistic targeting agencies bottom-up by motivating staff to derive maximum benefit from PM.
Since 1994, the Maltese government introduced a PM for its employees to point out performance rating reports replacing them by a new appraisal system known as PMP. The new scheme involves calculating the performance of employees with set quality standards and levels of output. The supervisor and the individuals agree on a work plan and thus this leads to improved working relations. The employee receives output on its performance for the period which is usually one year. The aim of this scheme is reduced error and waster, increased productivity and improved quality and serviceability. The PMP is also a relevant tool for greater motivation by aligning individual and organisational goals and identification of training and development needs.
2.5 PERFORMANCE APPRAISAL SYSTEM WITHIN THE MALTESE PUBLIC SERVICE
The newly introduced system of performance rating reports, is systematically recorded with the aim of future considerations for promotion with accordance to a common standard. These reports are done on an annual basis by the employee superior and their reliability is of utmost importance and the result of the appraisal has to be taken into careful consideration. The report is to be discussed with the officer concerned and in case of disagreement the superior is obliged to give reasons for their rating. Whenever the officer is rated below "Qualified" the report should be reviewed by the Reviewing Panel whom decision would be final. The reports should be kept within the HR unit of the department and the information is strictly confidential.
As a part of the implementation process a number of PMP trainers have been appointed by their respected department to conduct training to enable them in a position to conduct this process effectively. The managers and their subordinates are to plan their work in advance in accordance with the departmental goals which involves drawing up individual work plans on a twelve month basis which usually starts in December prior to the opening of a new calendar year.
The document is a two-page document and the PMP form for general service employees is similar to those in headship positions which was introduced before. The form includes the following sections:
Schedule of Reviews
Final Overall Rating
The first part is usually the details of the employees, the employing department, their immediate supervisor who is responsible for their performance and finally the next level supervisor to whom the immediate supervisor is liable. The following part defines the valid cycle of the work plan in the form which is important to be in sequence between one PMP document and the following. Thirdly, the schedule of reviews is the dates which the employee and the supervisor mutually agree on which are registered on the document. The skills (training) part pin points the training needs of the employee to improve their productivity and performance and it should be ensured that action is taken on this regard. The work plan involves that the employee and the supervisor mutually agree on a set of five tasks and activities for each appraisal period. These tasks should cover the key responsibilities which of the employee and new projects or initiatives that may involve revising the duties of the employee. The work plan also involves the performance measurement column to determine the standards in respect of each activity completed which have to be agreed on by both parties. The rating scales applied are the following: Outstanding (16 -20), Above average (11-15), Average (6 -10), Unsatisfactory (0-5). The final overall rating should represent the overall average of all the grading obtained by the employee during the reviews of his/her performance. The last part is intended for comments that the supervisor and the employee following the end of the cycle covered by the report.
ANALYSIS OF FIELD RESEARCH FINDINGS
The chapter presents the field research undertaken at NSO. The methodology applied is already explained and justified in the previous part of the report. Therefore, it is appropriate to present the findings in this section. This chapter is split up in two sections: the responses from the Management questionnaire and the feedback of the employees who were surveyed by another questionnaire. Since several questions were asked to both parties there is also a comparison of the findings from both perceptions. The findings are presented according to the different themes set within the literature review findings.
The figure above shows that 25% of the managers are under 30 years of age, 9% are between 31 and 40, 16% are between 41 to 49 years and 50% are over 50 years.
The above figure shows that the majority of the respondents (50%) have been in managerial positions for less than 2 years. Therefore, it can be concluded that the NSO management is made up of relatively new managers. Another 31% have been in managerial positions for longer 3 to 5 years, 6.3% for 6 to 8 years and 13% for more than 9 years.
The above figure shows that the majority of the respondents have been working with the Public Service between 10 to 15 years and for over 20 years. It can be concluded that Managers at NSO have a relatively long working experience within the Public Service.
From this question it transpires that the majority of the managers (56.3%) agree that the performance appraisal is a good tool for performance planning and goal setting and only 6.3% disagree with this statement. Conversely, 39% of the rest of the workforce disagree with this statement and therefore think that the system is not an effective tool. However, the majority of employees agree with the rest of the management. It can be deducted that since 20.3% of the employees and 37.5% of the managers were neutral in this regard those respondents were not sure about the system effectiveness in this regard. It can be concluded that the perception of both managers and staff is that the PMP does not fulfil the aim of goal setting and performance management. Both the managers and the staff commented that the PMP is not properly used and needs to be customised for NSO in order to obtain performance planning thus strengthening the fact that the PMP does not address these issues. It has been said also that the PMP should be done more frequently in order that it is more productive and moreover the staff should be given feedback of what can be improved in their performance and also of future challenges that their area would face. They all said that the system should be changed or at least upgraded to a much better and more holistic system specifically designed for the NSO situation. Moreover, even though those who agreed that the PMP is a good tool commented that if not used properly the effectiveness could be compromised.
This response is in conflict since 37.5% of the managers interviewed think that the PMP is not a fair way to assess performance, however 31.3% agree and another 31.3% are neutral about this statement. The type of response above could imply that the managers give positive feedback to their respective subordinates for the sake of not creating friction with him or her. This could also be since within NSO there is no real set standards of performance in place and the majority of managers dish out good grades to their staff, the main reason being to avoid any conflicts whatsoever. This method of grading and lack of set standards creates various situations of employees. There are employees who receive good grades even if their performance is lacking so they perceive that the rating is fair for them. There are employees who work hard and receive good grades and are satisfied with their grading and there are also those who are sceptical about the grading since many employees get more or less the same grading regardless of their performance. Some also commented that since the actual system is rigid the manager can underestimate someone's performance unintentionally since the manager doesn't usually know all the details of each person's workload.
The results show that the managers have more faith in this statement than the staff. Infact, only 10% of the managers disagree with this whereas 37.3% of the staff disagree. However, there is a 43.8% of the management who are not sure about this statement which can be perceived as disagreement maybe no real marked improvement in production and motivation has been recorded after the PMP is completed. The major disagreement to this statement from employees is probably because no incentive is tied to it, therefore, employees do not see it as a token to improve their status if they work harder. Some employees commented that the PMP if done properly it does improve motivation and productivity but it is not the case within NSO since the career progression is automatic by seniority and not tied up to performance. Furthermore, they stated that a form of reward or recognition for showing good or exceptional performance can motivate their subordinates to work harder. In reality this is not done and therefore there is no extrinsic motivation for the employee to achieve higher. The staff also commented that there should be more discussion with the manager so as there is more motivation and productivity since some managers do the PMP on their own without discussing future goals with their subordinates.
The result transpires that the majority of 68.8% of the managers think that the result of the PMP is subjective to their opinion. This strengthens the fact that there is need of more discussion with the staff regarding the outcome of the result and also more frequent reviews of performance. There is more need for the manager to focus on the aspects of its subordinates job apart from pointing the parts of the job that haven't been handled well, the manager should also recognise for jobs that have been done well. Some managers commented that the result might be unfair due to this reason and considering the way a PMP should be handled there is no other option. Moreover, it was stated that the PMP should not be the only measure of performance since this is completed only by the managers perception and some jobs that the employee does aren't being considered.
From the above responses, it is clearly shown that the respondents all agree that in case of disagreement with the results the subordinates should be given opportunity to appeal and discuss the outcome of their results. This sustains the fact that within NSO more communication between the two parties is needed in order to improve performance, discuss future responsibilities and also identify the employee's training needs.
68.8% of the managers agree with the statement above whereas 25% disagree and another 6.3% have a neutral opinion, which might arise from the fact that either they are not even bothered by the PMP rating or were unwilling to express their true opinion. But from analysis of the trend, one can say that the majority of the managers do perceive that the PMP is a process worth doing. Some commented that the process should be improved so as it gives a more fruitful result, furthermore there should be more coordination between the management and human resources on this regard so as to give the process the necessary amount of importance.
3.10: Other methods of performance measurement that the managers use
Surely, the respondents agreed that there are no standards at all in place although some admitted this with a straightforward answer. Some of the respondents claimed that they have subjective and personal judgement on people's performance standards and also that there is inconsistency between departments on how they set and measure performance standards. It was also remarked that HR does not contribute at all to the setting of performance standards.
Managers where asked how they measure performance of their subordinates other than by performance appraisals. Forty per cent of the respondents replied that work methods are frequently reviewed and subordinates are monitored on the quality and quantity of work. However, none of them provided with evidenced and mentioned examples of how this is done. Eighty per cent of respondents also commented that measurement is executed by the managers by ensuring that deadlines are met whilst each member of the staff ensures quality in the work done. Some managers argued that training required to improve performance is also identified by them. It was also argued that performance is measured by assessing each employee's initiative in his job, the ability to work without supervision and the ability to work in a team.
3.11: What can be done to improve the actual system?
The last question focused on any improvement areas that can be recommended by the managers to have an effective PMP system at the NSO. The majority of the respondents suggested that it should be revamped and the rating system must be more clear and precise so as not to be subject to the manager's opinion. All managers recommended aligning the PMP system with some rewards to be more effective and that the present format should be discarded and replaced by tailor-made system that caters for the needs of NSO. Some remarked that in order to be effective, the performance appraisal system should have the full support of the superiors and must include appropriate feedback from them. The managers were very sceptical, however, on whether the PMP system should be retained, they all suggested that it must be totally restructured but it should not be discarded at all costs.
Lastly, some managers claimed that the current system is de-motivating the staff and the only way to get positive outcomes is when this is tied up to a progression system rather than the present system that involves automatic progression regardless of the employee's effort.
The subordinates where also asked the same question and most of the recommendations counterpart the answers of the managers. The majority of the respondents agreed that a reward system should be put in place in connection with the PMP like the actual performance bonus that the managers have in their system. Moreover, a good number of comments also showed that the PMP was not a continuous process and therefore there was no guidance by the manager regarding the employee performance throughout the year. This clearly shows the lack of communication that there is between managers and their subordinates. Furthermore, in coherence with what most managers stated, the actual PMP should be either discarded or revamped to a system which is custom made to the needs of NSO. Confirming the lack of communication between the managers and the staff it can be transpired that there is deficiency of discussion regarding the outcome of the PMP and aligning the organisation's goals with those of the subordinate. Due to these negative comments it can be concluded that the current system is seen by both the management and their subordinates as a bureaucratic procedure that doesn't have any positive results on the quality of work, productivity and motivation.
Figure 3.13 presents the distribution of gender within NSO. The majority 71% of the respondents were female.
The figure above shows that 6% of the respondents were Principal Statisticians, 22% are Senior Statisticians or Programmers III, 47.5% (the majority) are Statisticians, and 1.7% are Systems Analyst/Programmer II/Librarian/Web administrator. 6% are ProgrammerI/Assistant Statisticians/Sen Accounts Executive/Assistant Librarians. 1.7% are Senior Statistics Executive/IT support Officer/Accounts Executive/Senior Survey Interviewer/Library Assistant/Principal Messengers. 13.6% are Statistics Executive/Survey Interviewer/Clerk/Receptionist/Sen Messenger/Storekeeper.
The above figure shows that the majority of employees worked within the Public Service for 0 to 9 years. Therefore, it can be stated that the NSO is made up of a relatively young workforce. Furthermore, it is transpired that quite a big part of the workforce is made up of more experienced staff who have been working with the Public Service for over 20 years.
The figure above transpires that the majority of the subordinates (50.8%) consider the PMP currently used at NSO as being unfair when compared to appraisals used within the Private Sector. A 35.6% who have given a neutral answer can be counted as being indifferent to the fairness of the system and as many commented some employees don't know what methods are commonly used outside Public Sector. The diffused disagreement on this statement may be due to many reasons one of them being the fact mentioned earlier of not having rewards attached to the appraisal system therefore the procedure is seen as a bureaucratic one without any benefit. Some commented again that the actual PMP is subjective to the manager's opinion moreover, appraisals in the Private Sector are perceived as being more goal oriented.
The above response clearly shows that some sort of standards exist, these are set by the respective unit manager. It can be deducted that there are managers who set standards for their unit and there are others who do not, and since there is no official common standards it contributes to disparity between units. However, as shown from the results above it can be remarked that only the minimum of the respondents stated that they don't know what is expected from them.
The majority of the respondents (74.6%) are neutral or disagree that the PMP provides opportunity of aligning own goals with those of the organisation, thus strengthening the fact that the PMP does not address these issues at all. This is in concomitance with the managers' view about the PMP being just a work plan sheet and nothing else. If training is needed by an employee to improve his/her performance, that is identified by the manager, not specifically through the PMP, though in the case there is a section where the employee writes down what type of training s/he would like to receive.
The major opinion of the respondents in this regard is more on the disagreement side having 40.7% who totally disagreed and another 23.7% are not sure about it. The result is in concurrence with the previous figure and therefore strengthens the fact that the actual system does not involve tackling weaknesses of subordinates by two way communication between parties regarding training needs and performance issues. The current system does not prepare the subordinates for future challenges that the organisation will be facing since it does not directly address what could be improved in their performance. In order that the system is effective the manager should also point out good jobs that have been done which works out as a great motivator.
The figure above transpires that the majority of the subordinates are on the disagreement side with 37.3% who disagreed and 52.5% gave a neutral answer. Therefore, most of the employees cannot perceive that the PMP can help them improve their career through the current system since the career progression at NSO is automatic.
The results show that the majority of 86.4% agree that if they don't agree with the result of the PMP they should be given the opportunity to appeal. In the current format of the PMP there is a column where the subordinates can write comments over the grading given by their manager. Although, this is not practised normally the subordinates have a say and can be given an explanation regarding their grading.
CONCLUSIONS AND RECOMMENDATIONS
This chapter presents the conclusions on the findings derived from the literature review, the questionnaire distributed to the management and to the employees of NSO. The conclusions are based on the same framework of the findings based on the main study themes. Moreover, a list of recommendations is presented to finalise the report.
4.2 THE EFFECTIVNESS OF PERFORMANCE APPRAISALS
The study also determined that there is no standard of performance currently in place at NSO and the HR does not influence the setting up of these standards. This was confirmed by the directors, managers and employees themselves in the survey undertaken. One may therefore conclude that although authors and academics claimed that these are crucial and important to ensure efficiency and accountability and have been in place for more than five decades, the system at the NSO is still not yet in place. Although the directors and some managers claimed that they do some informal spot checks to ensure that all employees are contributing towards the organisation, there is no system in place where managers can plan and control operational outputs on standards. The author is of the firm belief that this is one of the major flaws within the operational systems at the NSO. Even if the aim of the performance appraisal is indeed to improve individual and organisational performance, in scantily designed systems this may not be effective as it is supposed to be. This study aimed to investigate the effectiveness of performance appraisal within NSO and as a result it can be concluded that the situation at NSO is surely contradicting specific academic writings. Evidence shows that performance appraisals can be an effective tool to measure performance and that the system can be a key motivator both on employees' behaviour and performance. Nevertheless, the PMP at NSO is totally ineffective as proved by the overall consensus of the management and also their subordinates. There are various factors which contribute to this ineffectiveness some of those are listed below:
Government institution bureaucracy
Lack of competence of management due to lack of training
Inability of HR to coordinate the system
Indifference of both management and subordinates to improve the system
Inappropriate sets of criteria to measure performance
Loss of faith in the system by both parties
One major problem mentioned above is the lack of criteria to measure performance. This leads to managers and directors focus on more informal methods of performance measurement and consequently performance is not measured appropriately. However, in concurrence with literature review findings, both parties agree that the PMP is an effective measure of performance however the way it is used today throughout NSO it's purely a 'waste of time' and therefore ineffective.
4.3 THE FAIRNESS OF PERFORMANCE APPRAISALS AND THE IMPACT ON THE EMPLOYEE'S PERFORMANCE
The findings derived resulted that the current system within NSO is very unfair and this was confirmed by all the staff that participated in the questionnaire. This is due to grading being given at the discretion of the manager and consequently the system is flawed. Opposing to academic findings the current system fails to increase motivation and productivity levels and conversely de-motivates the workforce since managers are ignoring the entire system. This also was confirmed through the managers' survey where approximately 70 per cent disagreed or were indifferent with the statement that the actual appraisal is fair. Additionally, this perception of fairness is derived from the fact that there is lack of performance standards and therefore managers attempt to measure the output and performance through achievement of tasks or objectives. In concurrence with literature review findings it can be concluded that appraisals are generally applied in subjective manner leading to unfairness on the appraisee.
There was also a general consensus that the PMP is not giving opportunity to the employees to improve their performance and very little is being done to improve the situation. It can be concluded that this situation is due to the fact that the actual PMP is not attached to any rewards and therefore it gives no incentive to the employee to increase its output. This results in both parties considering the PMP as a routine exercise without any advantage to both. This is quite contradictory when related to the literature review findings since many authors claim that there are many benefits associated with the PMP if its done appropriately. One of the factors contributing to this problem may be that subordinates are not being given feedback how they are progressing throughout the year since the PMP is not being executed in periods but only yearly.
The conclusion above surely contradicts the main literature review findings in relation to the appropriateness and effectiveness of the performance appraisal application in organisations. However, one may argue that the findings in the NSO support other theoretical opinions that performance appraisal systems fail to achieve their objective whenever they are not applied appropriately and whenever the criteria to measure performance is subjective to the managers opinion leading to unfairness.
Based upon the above conclusions It can be recommended that:
HR role in this system is revised
Performance standards are set
Managers are given appropriate training regarding performance standards
A report with ideas and suggestions to improve the system shall be prepared and passed on to the government.
A consideration should be given on the idea of attaching rewards to the performance appraisal
The actual system must be upgraded to being perceived as being a fair one
The HR in this regard should be more involved with more coordination with the management in setting performance standards and measuring these standards across the entire structure at NSO. This should be done by upgrading the actual system to a tailor made PMP format which righteously adapts to the needs of the actual organisational structure. Furthermore, performance standards will enhance the control mechanisms and also stabilizing certain unbalance from one section to another thus ensuring efficiency and effectiveness in all tasks undertaken.
Training should be given to both managers and subordinates in this regard in order that managers are skilled to undertake performance appraisals and also make their subordinates aware why and how performance appraisals are done. Another suggestion may be that the managers prepare a list of suggestions to improve the actual system and also passing It on to the central government putting into consideration a reward system tied up to the performance appraisal. This should be done in collaboration with the rest of the staff with the aim of increasing motivation by incorporating them in the decision making process.
Criteria should be set to measure clearly productivity, quality of work, skills and flexibility and other behavioural traits. These set of criteria can be further developed and agreed upon by key stakeholders involved including directors, managers and employees, trade unions and government management. The aim of these set of criteria is to improve its effectiveness and to decrease the perception of the system being unfair.