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1 Introduction
Performance appraisal, also known as employee appraisal, is a
method by which the job performance of an employee is evaluated
(generally in terms of quality, quantity, cost and time).
Performance appraisal is a part of career development and is linked
to other human resources functions.

Before discussing the link between performance appraisal and


other human resources functions it is important to understand what
appraisal is all about and how it affects organizations and
individuals.

This assignment will discuss firstly performance appraisal as a


human resource management function, its uses, the problems, the
methods of performance appraisal lastly the link between
performance appraisal and other human resources management
functions human resources management
planning,promotion,remuneration training and development and
dismissals.

1.2 Performance Appraisal: an overview

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Performance evaluation unlike job evaluation stresses the
individual in the job rather than the job itself1.
There are as many definitions of performance appraisals as there
are authors. In some sources performance appraisal and
performance evaluation are regarded as synonymous. The
following definitions can be given, performance appraisal;

• … is the process of systematically evaluating each


employee’s job-related strengths and weaknesses, as well as
determining ways to improve his or her
performance.(Hellriegel and Slocum-1992:409)
• … is process of evaluating and communicating to an
employee hw he or she is performing the job and
establishing a plan for improvement, Byers2.
• …is a process that provides an analysis of a person’s overall
capabilities and potential allowing informal decisions to be
made for particular purposes, Bratton3.

Thus it can be deduced that performance appraisal is about the


reviewing of an individual performance for the reasons to be
explained as uses below.
1
Leornard R.Burgess (1989): Compensation Administration 2nd Edition; Merrill Publishing Company-pge
250
2
Lioyd L.Byars,Leslie W.Rue;HRM,9th ,McGraw-Hill/lrwin,pge-217
3
John Bratton,Jeff Gold; Human Resource Management; Theory and Practice 4th ;Palgrave McMillan,pge-
284

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1.3 Parties in Performance appraisal
The employee is obviously the subject being evaluated and the
question arises; who does performance evaluation? According to
Burges (1989:250); the employer’s superior, subordinates, peers,
the employee, other individuals or a combination of these subjects
can do performance evaluation. Groups and assessment centers are
also responsible according to him.

1.4 Uses/Purposes of Performance appraisal


Hellriegel and Slocum (1992:409) divided the uses of performance
evaluation into four classes namely; reward decisions, personnel
movement, feedback on performance and determining training
needs. Rothwell and Kazanas (2003:106) states that appraisals
serve as a two-fold purpose. First they furnish employees with
feedback on past performance. Second they provide a starting point
for planning future performance improvement. Thus performance
appraisal is about evaluating employees’ performance for
organizational decisions in rewarding, personnel movement (i.e.
promotion, transfers and demotions) and also for individual career
planning. The feedback on the current performance will probably
give the employee the view of what he or she can achieve thereby
planning for the future.

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1.5 Problems in performance appraisal
Every human resource function has its problems and performance
appraisal is not an exception. Many performance problems can be
avoided by designing performance appraisal systems. An effective
performance appraisal system lets people know what is expected of
them, how well they are meeting those expectations and what they
can do to improve on their weaknesses4.Two major problems can
be noted, subjectivity and political issues.

1.5.1 SUBJECTIVITY
1. Rater characteristics –characteristics of the rater exert a subtle
and often indirect influence on performance appraisals .Younger
and less experienced managers, who may have received low
evaluations themselves tend to rate others strictly than older more
experienced managers do.
2. Leniency- A common and often intentional rating error, occurs
when a manager rates all employees in a group higher than they
deserve, for any of a number of reasons. Reasons are usually
unprofessional, may be; avoiding conflict, giving employees a
morale boost, creating a good record for the group or making one
self feel good.
4
Luis R.Gomez, Mejia-David B.Balkin, Robert L.Cardy (1998): Managing Human Resources; Prentice
Hall.

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3. Halo effect-As in interviewing, the halo effect occurs in rating
where the rater allows his/her knowledge of an employee’s
performance one dimension to colour the rating of all dimensions.
4. Central tendency- Central tendency is a rating error that occurs
when a manager gives an average rating to all employees, even
when their performance varies. Manager with broad spans of
management and little opportunity to observe behaviour are likely
to play it safe by rating most of their subordinates in the middle of
the scale rather than high or low.
1.5.2 POLITICAL ISSUES
Office politics decides who gets what raise, promotion or
demotion5.Thus performance appraisals will always a political
bearing in organizational politics which determines who go where,
who gets what and how much goes where for example R400 000 is
for T&D this year.
1.6 The link between performance appraisal and other human
resources management functions
1.6.1 Appraisal and Human resources planning
Human resource planning is used to estimate future human
resources management needs by analyzing current job occupation,
turnover, transfers, promotions (as well as the related skill levels)
and retirements (Haasbroek et al 2008:275).Because the managers

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Don Hellriegel, John W Slocum, Jr (1992): Management 6th Edition; Edison-Wesley Company

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and supervisors must take decisions concerning promotions,
demotions, transfers and lay-offs. Past performance appraisals
normally help to determine which employee is most deserving of a
promotion or other desirable job changes6.Gomez-Meja et al
(2001:226) as cited in Swanepoel et al (2003:813) writes that,
“performance information can be categorized under two main
headings of administrative and developmental processes”.
Administrative purposes concern the use of performance data as a
basis for personnel decision making, including human resources
planning, for example compiling skills inventories, obtaining
information regarding positions to be created, and developing
succession plans7. Thus through performance evaluation
organizations can use that feedback whether it is positive or
undesirable to plan for future personnel needs. For example which
employees will need training or which skills is the organization
lacking so as to determine if external recruitment is a solution.

1.6.2 Appraisal and promotion


lf promotions are not fairly administered, low employee morale;
high turnover can be the order of days in an organization which
will ultimately reduce productivity and increase unnecessary costs.
6
P Grobler,Surrette Warnich,Michael R Carell,Norbert f.Elbert,Robert d.Hatfield(2001);Human Resource
Management in South Africa3rd edition ,pge
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Ben Swanepoel, Barney Erasmus, Marius Van Wyk, Heinz Schenk (2003): South African Human
Resource Management; Theory and Practice 3rd Edition, Juta-pge813

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Performance evaluation can be used to increase and to promote an
individual as well as to improve employee performance. An
effective performance evaluation will also improve employee
motivation. (Burgess-1989:250).Thus when conducting
performance appraisal for promotion purposes subjectivity
(leniency, halo error, central tendency) should be avoided so that
any outcome of the appraisals will be perceived as fair by all
employees who will be expecting promotion.

1.6.3 Appraisal and remuneration


If the decision is made to use a merit pay system which is based on
performance appraisal results, then it follows that appraisal must
be done and done very well. Even if performance appraisal results
are not used for merit pay purposes, there is a good reason to
believe that appraisals should be done8.The most common
decisions based on evaluative objectives concern compensation,
which includes merit increases, employee bonuses and other
increases in pay. Thus the term merit review or merit evaluation
can be found in organizations using performance appraisal to
determine pay increases. (Grobler et al 2001:265)

1.6.4 Appraisal and training and development

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Edward E.Lawler,111(1981):Pay &Organization development,Pge-129

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Employee performance appraisals are especially appropriate for
identifying individual training and educational needs. After all,an
appraisal is intended to determine how well an individual is
performing his or her job. Deficiencies stemming from the lack of
individual knowledge or skill are appropriately used to identify
traditional training needs; proficiencies are traditionally used to
plan employee educational activities leading to promotion or other
future career moves for individuals9.Carell et al (2001:265) writes
that the results of appraisals influence decisions about the training
and development (T&D) of employees. To him below average
evaluations may signal areas of employee behaviour that may be
strengthened through on- and away- from-the-job training. Of
course, it is arguable that not all performance deficiencies may be
overcome by T & D.lt is therefore the role of managers and
supervisors to distinguish problems resulting from the lack of a
critical skill or ability from those caused by low morale or some
form of job dissatisfaction.

1.6.5 Appraisal and dismissals


Dismissals cause movement outside the organization and
invariably lead to an unplanned vacancy. They represent extreme
disciplinary action and must not be taken lightly10.Dismissals
9
Rothwell William and Kazanas H.C(2003): The Strategic Development of Talent: A framework for using
talent to support your organizational strategy(2003Pge106)
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PS Nel.A Werner,GD Haasbroek,P Poisyt,T Sono,HB Schultz(2008);HRM 7th edition,pge-275

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should only be taken as the last resort after all other efforts have
failed because they are costly to an organization as a severance
package has to be prepared for each dismissed employee. The
appraisal can establish that there is a serious performance gap
between the desired and current performance. Corrective measures
to make up for the performance gap should be instituted and this
may include some form of training (on or off-the-job).lf
performance has failed to match the required job performances,
another job less challenging should be given to the employee after
which failure to execute may call for the dismissal of an employee.

1.6.6 Performance appraisal and recruitment, selection, and


placement
Grobler et al (2001:265) are of the opinion that performance
appraisal can also be used to evaluate the recruitment, selection
and placement system. The effectiveness of these functions can be
partially be measured by comparing employees’ performance
appraisals with their test scores as job applicants. For example,
management may find that applicants who scored about the same
on selection tests show a significant difference in performance
after one year on the job, thus the test may not accurately predict
behaviour.Thus performance appraisal carried out on new

Pge-275

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employees will help to determine the effectiveness of our
recruitment, selection and placement processes. However negative
feedback from the appraisals should not only be attributed to
recruitment, selection and placement processes as there are great
chances that other factors such as poor motivation and vague job
tasks may also lead to unsatisfactory results.

Conclusively, performance appraisal which is most concerned with


the evaluation of an individual job strengths and weaknesses is not
carried out in isolation. Rather the process is intertwined with other
human resources functions such as human resources management
planning, promotion, remuneration training and development and
dismissals. Performance appraisals are of great value to any
organization however the problems of subjectivity and political
issues should always be taken into consideration for its effective
execution.

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Question 2
2.1 Introduction

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Unfair dismissal of an employee constitutes unfair labour
practices. This contrasts with the provision section 23 of the
Constitution of Republic of South Africa Act 108 of 1996
which provides that, “everyone has a right to fair labour
practices”11.

According to South African law an employee can only be


dismissed on three conditions which are, misconduct, incapacity
and operational requirements. Moreover to these conditions any
dismissal should follow a fair procedure thus substantive fairness
and procedural fairness.

This assignment will; firstly discuss the concepts, dismissal and


incapacity; secondly the considerations required in dismissing an
employee on the grounds of incapacity; thirdly fair dismissal.

2.2 Dismissals and incapacity defined


According to the Labour Relations Act (LRA), s186 (1) a,
Dismissal means that,an employer has terminated a contract of
employment with or without notice. Grogan (2007:121) writes,
‘capacity’ refers to employees’ ability to perform their work
adequately. Thus from this definition we can deduce that

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section 23 of the Constitution of Republic of South Africa Act 108 of 1996

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‘incapacity’ refers to the employees’ inability to perform their work
adequately since it is the opposite of capacity.
Incapacity includes incapacity due to ill-health and poor work
performance12.

2.3 Considerations
lf an employee is not capable of doing the work because he lacks
skills, knowledge or ability and, therefore does not meet the
required standards, he can be dismissed for poor work
performance.

2.3.1 Probationary worker


When probationary employees’ does not meet the required
standards, evaluation and assistance by the employer are required.
Only in instances where the employer has taken reasonable steps to
help improve the employees’ performance and his performance
does not improve, can be dismissal be considered. Poor
performance is treated less strictly in probationary workers than in
permanent workers. (Du Plessis et al-2002:311).Thus probationary
workers are given more chances to work on their performances as
compared to senior workers.

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JV du Plessis, MA Fouche, MN Van Wyk: A practical guide to labour law 5th Edition; Butterworths,
Durban,pge

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2.3.2 Dismissal for incapacity after expiry of probation period.
The employee may be dismissed for incapacity after a hearing if
shown to be incapable of performing the work for which he was
employed to the standards required. It is not reasonable to expect
of an employer to return the services of an employee who process
incapable of performing the job of which he/she was hired
principles of logic and equity dictate that the employer attempts to
final alternatives to dismissal by and instance offering an often less
demanding post in which she is capable of performing if a situation
such post be available, even if this would mean a demotion from
her incumbent post. (www.roylaw.co.za).

2.3.3 Dismissal on poor work performance


Section 9 of the Code of Good practice on dismissal, schedule 8 of
the Act sets out the requirements when the dismissal is based on
poor work performance:
Any person determining whether a dismissal for poor work
performance is unfair should consider;
(a) whether or not the employee failed to meet the performance
standard; and
(b) if the employee did not meet a required performance standard,
whether or not:

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(i) the employee was aware could be reasonably be expected to
be aware of required
standard;
(ii) the employee was given a fair opportunity to meet the
required performance
standard; and
(iii) dismissal was an appropriate sanction not meeting the
required performance
standard13

2.3.4 Dismissal based on ill-health


If the incapacity of the employee is based on ill-health or injury,
section 11 of the Code of Good Practice lays down the following
guidelines:
Any person determining whether a dismissal arising from ill-health
or injury is unfair should consider:
(a) whether or not the employee is capable of performing the work;
and
(b) if the employee is not capable to;
(i) the extent to which the employee is able to perform the work
(ii) the extent to which the employee’s work circumstances might
be adapted to

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Section 9 of the Code of Good practice

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accommodate disability, or, where this is not possible; the
extent to which employee’s
duties might be adapted; and
(iii) the availability of any suitable alternative work14

2.4 Fair appraisal


A proper appraisal of the employees work performance is essential
to purposes of proving that the employee failed to attain the
required performance standard. An appraisal serves an important
function it gives the employer the chance not only to assess the
employees’ performance, but also to discuss the problems that may
have been identified with the employee. The employee’s capacity
must be objectively assessed in relation to such factors as changes
in production technique, new technology and other factors that
might be retarding the employees’ performance.(Grogan-
2007:415).

Unfair dismissal constitutes unfair labour practices hence they are


not allowed.Numsa(National Union of Metalworkers of South
Africa) successfully defended a member who was dismissed for
incapacity arguing the company had not followed the relevant
LRA guidelines.ln this case Lear Corporation dismissed an

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11 of the Code of Good Practice

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employee, James White who was a Numsa member purportedly on
the basis of incapacity. Lear demoted White from quality inspector
to line feeder ‘operator’ after an enquiry found him guilty of poor
work performance after he had approved a fault headrest. Prior to
demotion, the employer became aware that he was an epileptic.

However the company did not conduct medical investigations as


required in terms of LRA guidelines related to discipline for
incapacity. The employee also accidentally burnt himself with hot
water that spilt from urn and again the company suspected that it
was due to epileptic fits. The company on a latter date summoned
him to an incapacity inquiry and alleged that he posed a risk to the
company and fellow workers. They dismissed him in terms of
Occupational Health and Safety Act (OHSA), 35 of 1993 and
Numsa referred his unfair dispute to arbitration by the Motor
lndustry Bargaining Council. The senior Commissioner, Wickus
Ricket ordered the reinstatement of White on the same terms and
conditions of his employment prior to dismissal. A compensation
for 3 months was also ordered. (www.numsa.org.za).Thus
consequences of unfair dismissals due to incapacity may take form
of reinstatement and/or compensation.

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In conclusion, the onus lies with the employee to prove that in fact
he was dismissed and was an employee at the time of dismissal
while the employer has the obligation to attest that the employee
was fairly dismissed. Probationary employees are treated less
strictly than senior employees. Besides probationary workers,
employees can be dismissed for incapacity on poor work
performance and based on ill-health. Dismissals need to follow a
fair procedure thus substantive and procedural fairness otherwise
the employer may end up entangled in costly legal battles which
are not easy to win. Also organizations need to observe all the
legislations dealing with dismissal to ensure uniform standards.

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