Comparative Performance Systems

  • David M. MelloEmail author
Living reference work entry



A plethora of definitions can be found in the literature on performance management regarding what constitutes a performance management system. For purposes of this entry, a performance management system refers to an interlinkage of carefully designed processes and activities performed to assess and optimize individual performance, as well as reward and continuously develop employees for the achievement of the overall organizational goals (Mello 2014).


Different performance management systems can be identified across the globe. In the public sector, performance management systems were introduced to deal with concerns over the effectiveness of public institutions. Similarly, the need to satisfy the growing and changing needs of members of the public was another consideration for the introduction and improvement of performance management systems. The success of public sector institutions depends on the caliber of employees on their payroll. The performance of employees needs to be managed, following a policy and a performance management system that is suitable for the institution, its unique environment, as well as its employees. This entry provides an overview of common features identifiable across performance management systems and outlines the evolution of performance management systems within the public sector context. Furthermore, this entry focuses on contextual issues that may give each performance management system a unique flavor and identifies common problems in performance management systems.

Common Features of Performance Management Systems

Performance management systems are designed to achieve almost similar objectives. These objectives are, among others, improvement of organizational effectiveness and efficiency, motivation of employees, and improvement of employee morale. It is for this reason that performance management systems have similar features. These features include, but are not limited to, their alignment with the organizational purpose statement, the existence of a policy on performance management, measurement of performance against set standards using specific techniques, behavior modification using rewards and sanctions, as well as employee training and development to improve proficiency in performing their duties. Each of these features is discussed separately in the following subsections.

Alignment with Purpose Statement

A purpose statement or what is also popularly known as the vision of an institution provides direction that must be followed by all employees in the institution. A performance management system is a means to an end. It enables the organization to realize its long-term vision. A performance management system must be aligned with the vision and be designed to support it. Furthermore, the system must be aligned with other systems, strategic goals, and values of the organization. A policy on performance management represents concrete steps that must be followed for a purpose statement of the institution to be operationalized.

Policy on Performance Management

All public sector institutions require a policy statement on the management of employees at different levels of the institution. A policy of performance management represents a statement of intent and contains detailed guidelines on how performance management has to be implemented. The policy statement should also clarify the roles and responsibilities of stakeholders. Processes that form an integral part of the performance management system should be crystal clear in the policy statement. A policy of performance management must communicate organizational intentions clearly, leaving no room for ambiguity. A vague policy is open to different interpretations, which may be a source of discontent and disputes. It is important for a policy on performance management to make provision for appeals in instances where employees are not satisfied with the outcomes of their assessments.

No policy is cast in stone. It is advisable for public sector institutions’ policies on performance management to be reviewed at intervals of 3–5 years or whenever there are fundamental problems that necessitate changes. The environment in which the institution operates will, apart from the 3- to 5-year guideline suggested in this entry, be the determining factor relating to the intervals at which performance management policies may be reviewed. A more stable organization may review its policy every 5 years, while an unstable or newly established organization may benefit from more regular policy reviews. An inclusive consultation process during the formulation and review of policy on performance management may improve buy-in among employees.

Setting of Standards

Standards represent a yardstick against which the performance of a public institution and its employees can be measured. Standards manifest themselves in the form of quantity and quality of expected outputs. Apart from using standards to measure employee performance, standards are important for consistency and certainty among consumers of public goods and services. In setting standards, consumers of public goods and services must be consulted to establish their expectations. When setting standards, institutions and their employees need to be realistic. Setting unrealistic standards is tantamount to setting the organization and individuals up for failure. The ability to measure outputs is central to setting standards. Once standards have been set, it becomes easier to appraise individual employee performance.

Performance Appraisal

Appraising employees is an integral part of any manager’s core responsibilities. While performance reviews may be periodic in terms of policy, it is important to note that performance feedback needs to be provided to employees on a regular basis. Thanking an employee for a job well done does not have to wait for monthly or quarterly reviews. Similarly, an employee whose performance is below par needs to be informed promptly by his immediate supervisor. Performance reviews may lead to rewards, decisions to train, or develop an employee, and, in extreme cases, disciplinary measures may be preferred for an employee whose behavior cannot be corrected through one-on-one meetings with a supervisor or referrals to employee assistance programs where they exist. It is furthermore important to note that performance appraisal is not in any way a witch-hunt. Discipline resulting from consistent unsatisfactory performance reviews needs to be approached with great circumspect to allay fears and perceptions of a witch-hunt. It is only in instances where all corrective measures prescribed by policy have been exhausted that disciplinary measures may be considered in line with applicable labor laws. The principle of fairness must guide any decision to discipline an employee after a series of poor results from assessments.

The training and development of employees should be planned and implemented to rectify skills deficits identified during performance reviews. Consequently, individual personal development plans must be developed. Adequate resources such as time, finance, advice from supervisors, and other relevant experts must be mobilized for all employees. It is, however, important to prioritize underperformers, while top performers do not have to be ignored as they too need to maintain or surpass their current momentum. A training and development budget in public finance should not be an afterthought.

The Evolution

Performance management systems have evolved over decades. Earlier systems were more supervisor centered and were top-down in nature. The supervisor played a critical role in performance management, and his/her word was final. The standards set by supervisors would not be questioned. Similarly, the supervisor’s assessment, whether objective or biased, would be final. It is for this reason that in the evolution of performance management systems, one can arrive at two main categories. These two categories are supervisor centered and inclusive performance management systems. The supervisor-centered performance management system is viewed as autocratic. As early as the eighteenth century, there were attempts to improve organizational and individual efficiency and effectiveness. Frederick Taylor is one of the earliest theorists who was concerned about the performance of employees. Taylor’s system included, among others, incentive systems for higher performance, standardization of work through time study using stop watches, and the use of functional foremen (Tompkins 2005). Subtle and overt coercion was used to optimize employee performance. Punitive fines were used for underperformers. Similarly, top performers were rewarded with higher pay. Supervisor-centered performance management systems are still found in different countries and sectors. Unskilled employees are mostly subjected to supervisor-centered performance management.

Inclusive performance management systems emerged over the years due to labor rights and reforms in public sector management. Affording employees more rights led to the democratization of the workplace. Waves of public sector reforms, which can be traced to the 1980s to date, impacted positively on the evolution of performance management systems. Inclusive performance management systems were drifting toward what is known as 360-degree assessments. These types of assessments are gaining popularity due to their inclusiveness. They are preferred over supervisor-centered performance management systems, as the supervisor’s subjectivity is moderated by two or more other assessors. These assessors may be clients or colleagues, among others.

Contextual Issues

Similar performance management systems may be implemented in different countries with different results. Differences in results are a consequence of a number of factors in different continents and their regions. Developed and less developed countries are likely to achieve different results when implementing the same system of performance management due to inherent contextual issues. Some contextual issues that have a bearing on the success of performance management systems include, but are not limited to skills base, strengths of organized labor, leadership, and technology uptake.

Skills Base

Developing countries have historically had a low skills base. This state of affairs is mainly due to poor education systems and poor investment in skills development. A corollary to this historical fact is skills flight from developing and developed countries. Skills flight, also known as brain drain, happens in developing countries and developed countries. Brain drain seems to follow the law of the jungle: “survival of the fittest.” Countries that are well endowed with resources attract better-skilled employees. South Africa and Botswana in Southern Africa are, for instance, preferred destinations for skilled professionals who are searching for better-paying jobs. Southern African Development Countries such as Zimbabwe, Lesotho, and Swaziland are poorly resourced, and therefore they cannot attract skilled professionals. Developed countries, on the other hand, can have a massive skills inflow, and therefore their immigration policies may largely focus on attracting scarce skills.

The relatively high unemployment rates in Southern Africa force employees to settle for second best applicants. It is common for employers to advertise and then re-advertise with the hope of attracting the best employees. The abundance of labor with no skills or irrelevant skills may lead to another problem, namely, skills mismatch. Skills mismatch occurs due to the unavailability of suitable candidates in the market and applicants accepting offers out of desperation for employment opportunities.

Appointing an employee who does not have the requisite skills is setting such an employee and the organization up for failure. An employee who does not have the requisite qualification, skills, and experience is more likely to deliver poor services to members of the public and achieve lower scores during performance appraisals. An organization that has more of these employees is likely to have more grievances related to performance appraisals.

Investing in education and skills development is one of the answers to challenges experienced in the performance management systems of developing countries. The second answer is the improvement of salaries. The two challenges related to skills shortages require developing countries to redirect their scarce resources to education and skills development. This approach will have positive spin-offs for performance management, organizational performance and development, and ultimately economic prosperity.

Strengths of Unions

The strengths of unions differ from one country to the other. Differences in strengths relate to the nature of the state and labor policies that prescribe labor rights. States that are autocratic tend to limit labor rights. Contrary to the approach taken by states that are autocratic, democratic states afford individuals and groups of employee rights such as freedom of association and the right to strike. Workers in democratic countries are likely to be consulted when new performance management systems are designed or existing ones are improved. The strengths of organized labor may in extreme cases lead to a revolt against a performance management system that is perceived as infringing upon employee rights.


Leaders play a crucial role in performance management. A carefully designed system may fail in implementation due to the absence of leadership qualities in managers and supervisors. Leaders are the humane face of any performance management system. The role of any leader is to motivate, inspire confidence, and provide direction. Leaders who understand employees and what motivates them as groups and individuals are more likely to succeed. The inspirational role of a leader cannot be underestimated. Employees need a sense of belonging and appreciation. Successful leaders master the art of communication and the language of appreciation. The caliber of leaders that are found in different countries is largely influenced by cultural and religious practices. Circular and one religion-dominated countries may also display different sets of traits in leaders, which may impact on performance management systems differently.

Technology Uptake

The public sector is known to be slower in technology uptake. The fourth industrial revolution has brought with it a workplace that is automated with machines and computers that are able to process large quantities of data much faster. The use of information and communication technology can have both advantages and disadvantages. Depending on the settings and programming of technological aids, technology can overcome subjective tendencies and limitations that supervisors may have in the collection, sorting, storage, and processing of information used for performance assessments. The downside of technology is its invasive nature and the safety of collected information, which may be a cause for concern among employees. The advantages of using technology in performance management must always outweigh the disadvantages.

Common Problems in Performance Management Systems

The effectiveness of performance management systems or lack thereof can be ascribed to the poor design of the system, insufficient resources, and human factors. Employee policies, which include recruitment, selection, training, development, promotions, remuneration, and succession planning, must support the existing performance management system. However, if a public sector institution has good human resource management policies, a poorly designed performance management system may still yield negative results. A badly designed performance management system can be identified on the basis of its overemphasis of employer interests at the expense of employee interests; overemphasis of financial incentives while down-playing nonfinancial incentives; lack of focus on employee training and development; a higher number of grievances in proportion to the number of employees; and rigidity, absence of recourse for unfairly assessed employees, and absence of regular system reviews.

Rater errors are prevalent in performance management systems. Rater errors result from the extent to which human beings can be objective and perceptions of those who are rated. Human relations may impact on the rater who is unprofessional and vindictive. Similarly, an employee who had run-ins with the manager may perceive any rating negatively due to strained relations. Rater errors are largely influenced by human factors that are complex and may differ from one work environment to the other and among employees.

Public sector institutions depend largely on the ability of tax payers to afford higher tax rates. Tax payers are in majority of countries financially constrained and will resist any attempt to raise the prevailing tax rate. Public institutions are consequently forced to do more with little available resources. Financial resources to reward top performers adequately are often a limitation in the public sector. To deal with this dilemma, non-monetary incentives need to be considered. Nonmonetary incentives could include, among others, a day or afternoon off from work, trophies for good performers, citation of individuals’ excellent performance in meetings, and in-house journals and programs recognizing employees of the week or month.


A careful look at performance management systems indicates that there are differences and similarities. The development of inclusive performance systems over the years is indicative of the growing recognition of labor rights and concomitant reforms that seek to improve overall public sector performance. Public sector institutions exist and function in environments that must be taken cognizance of in the development and improvement of performance management systems. It can be expected that performance management systems will have challenges and from there the need for regular inclusive reviews. Discourses on performance management systems should always be aimed at the improvement of public sector performance and the perennial desire to learn from good as well as bad practices.



  1. Mello DM (Ed) (2014) Managing human capital in the public sector. Van Schaik, PretoriaGoogle Scholar
  2. Tompkins JR (2005) Organization theory and public management. Wadsworth, BelmontGoogle Scholar

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© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Faculty of Economic and Management Sciences, Mafikeng CampusNorth-West UniversityMafikengSouth Africa