Importance Of Employee Performance

2.1.3 Employee Performance

Employee performance is normally looked at in terms of outcomes. However, it can also be looked at in terms of behavior (Armstrong 2000). Kenney et al. (1992) stated that employee 's performance is measured against the performance standards set by the organization. There are a number of measures that can be taken into consideration when measuring performance for example using of productivity, efficiency, effectiveness, quality and profitability measures (Ahuja 1992) as briefly explained hereafter. Profitability is the ability to earn profits consistently over a period of time. It is expressed as the ratio of gross profit to sales or return on capital employed (Wood & Stangster 2002). Efficiency and effectiveness

This therefore implies that managers have to set the desired levels of performance for any periods in question. This they can do by for example setting goals and standards against which individual performance can be measured. Companies ensure that their employees are contributing to producing high quality products and/or services through the process of employee performance management. This management process encourages employees to get involved in planning for the company, and therefore participates by having a role in the entire process thus creating motivation for high performance levels. It is important to note that performance management includes activities that ensure that organizational goals are being consistently met in an effective and efficient manner. Performance management can focus on performance of the employees, a department, processes to build a product or service, etc. Earlier research on productivity of workers has showed that employees who are satisfied with their job will have higher job performance, and thus supreme job retention, than those who are not happy with their jobs (Landy 1985). Further still, Kinicki & Kreitner (2007) document that employee performance is higher in happy and satisfied workers and the management find it easy to motivate high performers to attain firm

Thus, the quest for theory and tools that could reliably predict effectiveness in the workplace began (McClelland, 1973). In 1982 it was Boyatzis who first drew together comprehensive data that had been collected in the USA using the McBer & Company ‘Job Competence Assessment’ method. Since then, competency has become a significant factor in HR development practices (Simpson, 2002). The word competency comes from a Latin word meaning “suitable” (Bueno & Tubbs, 2004). Boyatzis (1982) defines a competency as “an underlying characteristic of a person which results in effective and/or superior performance in a job” (p. 97). According to Boyatzis (1982) a job competency represents ability. An individual’s set of competencies reflect their capability or what they can do. A job competency may be a motive, trait, skill, aspect of one’s self-image or social role, or a body of knowledge that an individual uses, and the existence and possession of these characteristics may or may not be known to the individual. Similarly, Mitrani et al. (1992) state that competencies could be motives, traits, self-concepts, attitudes or values, content knowledge, or cognitive or behavioral