Overhauling Performance Management in Malaysia: Challenges and Solutions
The management of underperforming employees is an arduous task, often leading to consequences like inefficiency and legal liability. To compound matters, the subjectivity of performance assessment can result in inconsistent standards and thus, unresolved performance issues. This predicament, alongside a number of other factors, contributes to the failing of performance management processes, particularly in the Malaysian context. However, with the right understanding and proactive measures, employers and employees alike can navigate this complex issue to their mutual benefit.
Why Performance Management Often Fails
Malaysian firms' management practices, while on par with other developing economies, are far behind those of advanced countries, with Malaysia scoring 2.84 out of 5 in the World Management Survey (WMS). The consequences of such shortcomings are notable; an increase in a firm’s WMS score can lead to substantial benefits like higher labour productivity, increased profitability, and a reduced risk of bankruptcy.
One area of concern in the performance management practice in Malaysia is target setting. Targets often are not actionable and measurable and aren't incorporated enough into employees’ day-to-day responsibilities. This situation leads to a disconnection between performance goals and daily tasks, rendering performance evaluation ineffective.
Moreover, legal considerations can make the management of poor performers challenging. Malaysian law stipulates that employers must warn an employee about their poor performance, provide them with sufficient opportunities to improve, and only if there's no significant improvement, can the employer consider dismissal. Failing to adhere to these criteria could result in legal repercussions.
Tips to Improve Performance Management Process
For Employers
Firstly, employers must ensure that performance expectations and measurements are clear and objective, with realistic and measurable targets. Key performance indicators (KPIs) and performance goals should be directly linked to the employee’s daily tasks. Notably, this approach will contribute towards improving Malaysia's performance in target setting, which currently lags behind other management practice areas.
Documentation is key. Meetings discussing an employee’s performance, be it face-to-face or telephonic, should be minuted and filed for reference. This practice provides a paper trail, ensuring clarity and transparency in the evaluation process.
Providing the necessary guidance and support for employee improvement is vital. For instance, if an employee's performance is falling due to a lack of technical knowledge, it is the employer's duty to offer training and guidance. This support can include workshops, professional development courses, and mentoring programs.
Promoting a diverse stakeholder structure, improving minority shareholder protection, and instilling confidence in hiring professional managers can also significantly improve management practices. Foreign direct investment (FDI) can introduce innovative practices and new technologies, enhancing overall productivity.
For Employees
Being open to constructive feedback is crucial for employee improvement. Proactive engagement in the performance management process, such as requesting regular performance reviews, and seeking clarification on KPIs and targets, can foster a better understanding of expectations and areas for improvement.
If placed on a Performance Improvement Plan (PIP), see it as an opportunity to improve rather than a prelude to termination. Studies show that PIPs are often viewed negatively, but a positive and proactive approach to these plans can lead to significant professional development.
Lastly, maintaining a record of achievements, tasks accomplished, and any feedback received can be helpful during performance discussions. It provides a basis for dialogue about performance improvement and objective setting, encouraging transparency and clarity.
Improving performance management is a challenging yet rewarding endeavor. As we've explored, clear communication, objective and measurable performance metrics, ongoing training and development, and proactive engagement from both employers and employees can vastly enhance this process. A revitalized performance management system not only boosts productivity but also fosters a healthier and more satisfying work environment for all.
