Increasing Business Efficiencies through Performance Improvement

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The basis of the employment relationship is reciprocal; there are specific requirements from both the employer and the employee. In the 3M SA (Pty) Ltd v SA Commercial Catering & Allied Workers Union & Others case, 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.” This begs the question, how do employers ensure that they are proactive in managing employee performance to ensure increased business efficiencies?

In order to ensure that companies meet their organisational performance indicators and standards, each individual is given performance objectives, targets, and standards that are linked to the objectives of their team, their department, and ultimately their company. Once organisational objectives and targets have been set, they are distributed to the relevant departments and individuals. In turn, the individuals and departments, by achieving their objectives and targets, contribute towards the organisation as a whole and gain a sense of inclusion in a shared vision.

A Performance Improvement Plan affords the employer a great deal of flexibility in determining the standard required of its employees. In Empangeni Transport (Pty) Ltd v Zulu (1992) 13 ILJ352 (LAC) it was held that “it is for the employer to determine whether or not the required standard is met, and the court will interfere only if the performance assessment made by the employer is grossly unreasonable.”

Performance management is about managing individual performance within the organization, in order to ensure that their actions take the organization closer to its goals. A Performance Improvement Plan is a strategy that stipulates the expectations and objectives of the employee, as well as providing a platform to monitor performance against these objectives. It ensures that objectives are set in such a way that continuous improvement and growth is encouraged and ongoing feedback is provided.

A Performance Improvement Plan is founded on the notion of empowerment by establishing a collaborative relationship between employee and employer. Regular performance feedback sessions allow the employee to revisit previously established goals and navigate their progress in this regard. The employee has the opportunity to engage with their own performance indicators and determine their achievements and shortcomings in a non-threatening setting – encouraging the desire to meet or exceed agreed expectations.

Regular feedback affords managers the opportunity to identify shortcomings in performance and proactively schedule the necessary training, guidance, counselling, mentoring and instruction as envisaged in Schedule 8 of the Labour Relations Act. Furthermore, employees are motivated through the performance improvement plan by means of reward and recognition to reinforce good performance.

To ensure successful management of individual performance through means of the Performance Improvement Plan, the Manager/Supervisor shall:

  1. Communicate with employees, and show them how their work contributes to the success of the company.

  2. Ensure that employees know what is expected of them and why.

  3. Help employees set challenging but realistic objectives and work with them to achieve these.

  4. Identify necessary skills and actions required by the employee to achieve the objectives and performance standards that have been set.

  5. Conduct reviews with the employee to ensure that the objectives are still relevant and to assess the employee’s progress to date.

  6. Together with the employee, complete an individual learning plan that caters for his/her specific developmental needs in relation to the company.

  7. Create a climate that encourages employees’ natural motivation.

  8. Recognize achievements and performance goals which are met or exceeded.

In the event that the employee fails to meet performance objectives, the following guidelines should be followed:

  1. The employee’s direct Manager / Supervisor is responsible for conducting formal counselling sessions on poor performance.

  2. The counselling session is an opportunity to formally plan and agree on corrective action.

  3. Identify why the employee is failing to meet the required performance standards / objectives.

  4. Agree on a plan to assist the employee in achieving the required standards/objectives and give the employee a fair opportunity to improve his/her performance.

  5. Make the employee aware of the potential consequences of not complying with performance requirements.

  6. Ensure that these meetings are documented so that procedural fairness can be proven in the event of any future disciplinary action being taken.

It is essential that the standards and/or targets set for an employee are fair and are wholly made known to the employee in a comprehensive manner. An employee cannot be expected to meet certain standards or targets if he / she is unaware of them. Although performance standards need not be written into a contract of employment, they must be clearly defined and brought to the attention of the employee.

A Performance Improvement Plan establishes trust between employee and employer and is fundamentally based on growth and betterment of the business to act as a synergistic and efficient entity with a dedicated workforce.

For more information on the above topic, please contact the LabourNet Helpdesk at

0861 LABNET (0861 522638).

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