Achieving required standards through a regular performance appraisal

performance appraisal

A performance appraisal is very beneficial to the company, manager and employee. Constructive communication around performance adds great value to an organisation when correctly and thoroughly completed by managers and employees.

Aside from the obvious record of performance, real-time feedback can assist an employee in various ways.

Performance appraisals are important because they help each side of the table gather their thoughts and become more familiar with the areas that need improvement and those that are working well.

A formal appraisal system is effective if it is part of a culture of open communication and regular positive feedback to employees. It is advisable to conduct these reviews monthly to help establish and communicate employee and manager expectations in a monthly cycle. Monthly reviews may help drive the importance of performance and send a clear message for meeting and exceeding expectations.

Regular performance appraisals have the following advantages:

  • Self-Assessment: Allowing employees to assess their own performance can be a beneficial review method. This can provide a clue to managers as to areas where employees feel they can improve and expand.
  • Assist to identify, track, and maintain goals.
  • Prevent miscommunications.
  • Keeps everyone engaged.
  • Avoiding the surprise of employees finding out that they are not meeting their manager’s expectations.
  • Building a stronger relationship between manager and employee.
  • Assist managers by identifying areas where they can improve their management skills.
  • Promotion: Performance reviews can help managers discuss and consider any promotion or successional opportunities for high performing employees.
  • Compensation: Performance reviews can assist when an incentive bonus structure is in place.

One must also be mindful that if a performance appraisal is not conducted in the correct manner, it can hold various disadvantages for the business. The performance appraisal can create a negative experience for both the employee as well as the manager. Proper training on processes should be provided before embarking upon this process.

Should an employee fail to meet the required performance standard, it is advisable to implement a performance improvement plan to try and assist the employee to improve his/her performance through any applicable interventions such as training, guidance, or counselling.

However, in terms of labour legislation, no employer is obliged to retain an employee who does not perform according to the company’s expectations.

Labour Relations Act

In terms of Item 9 of Schedule 8 of the Labour Relations Act: Any person determining whether a dismissal for poor work performance is unfair should consider:

(a) whether or not the employee failed to meet a performance standard; and

(b) if the employee did not meet a required performance standard whether or not:

  • the employee was aware, or could reasonably be expected to have been aware, of the required performance standard.
  • the employee was given a fair opportunity to meet the required performance standard, and
  • dismissal was an appropriate sanction for not meeting the required performance standard.

From Schedule 8 it is therefore clear that no disciplinary process is initially envisaged. The process is one of counselling with the view to remedying the situation, and only if this is not successful, to then proceed to terminate services based on the incapacity of the employee to meet the performance standards.

In 3M SA (Pty) Ltd v SA Commercial Catering & Allied Workers Union & Others (2001) 22 ILJ 1092 (LAC) it was held that “A party to a contract is entitled to reject a tender of defective or incomplete performance and to demand complete and proper performance.” Crucially however, the party seeking to terminate the contract based upon the defective performance, must show that the performance is in fact defective (see National Union of Textile Workers v Jaguar Shoes (Pty) Ltd 1987 (1) SA 39 (N)).

Poor work performance

Poor work performance would generally relate to issues concerning the failure to achieve objectives, or targets, or other required deliverables. It would also include the efficiency with which work is done. From the outset, it must be stated that it is the prerogative of the employer to set the performance standards required in their business, and no Court will interfere with such standards unless it is simply unattainable or manifestly unreasonable. A Court or the CCMA is simply not entitled to second guess the employer on performance standards. The employer has a great deal of flexibility in determining what should be the standard required of employees. In Sun Couriers (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & Others (2002) 23 ILJ 189 (LC) it was held that “Employers are entitled to set performance standards and unless shown to be patently irrational or unrealistic, courts will be slow to interfere with them.”

It is further for the employer to determine whether or not the required standard is met, and the court will interfere only if the performance standards or the performance assessment made by the employer is grossly unreasonable. Performance standard do not have to be agreed to with employees. The standards can be unilaterally implemented by an employer. This was specifically held in National Union of Metalworkers of SA obo Sakati v DLP Manufacturing t/a Prism Products (2005) 26 ILJ 582 (BCA), where it was held that “Targets that employees have to achieve are clearly not conditions of employment and resort under work practices and may be changed unilaterally by employers as this falls within managerial prerogatives.”

A further principle regarding managerial employees, as enunciated in New Forest Farming CC v Cachalia & Others (2003) 24 ILJ 1995 (LC), is “whether or not the second respondent (referring to the employee), holding the managerial position that he did, ought to have been able to judge for himself whether or not he was meeting the standard set by his employer.”

The concept of awareness of a performance standard in the case of senior or management employees, where there is often no detailed and precise job descriptions of duties, and where some responsibility and initiative is required, is often in issue as senior employees argue that they had not been provided with a detailed job description. However, the arbitration award in A-B v SA Breweries Ltd (2001) 22 ILJ 495 (CCMA) quite aptly illustrates the legal position in this regard, being that “For a senior managerial employee to ask for a job description is a clear indication that the employee was not senior managerial material. The concepts of managerial prerogative, managerial discretion and managerial responsibility do not sit well within the restrictive confines of a job description, which belong to more mechanistic and delineated occupations. . . . . Similarly, if one looks at the matter objectively, the employee was employed on a senior managerial level at a handsome salary. Clearly such a position and the payment of such a salary presuppose a function beyond that of the ordinary foot soldier and more in keeping with that of a field commander.”

For more information on the above topic, please contact the LabourNet Helpdesk at 0861 LABNET (0861 522638) or the Port Elizabeth Office at 041-373 2994.

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