Impact of Performance Management on OCBC Bank Employee Performance

This project investigates the impact of performance management systems (PMS) on employee performance, using OCBC Bank as a case study. The research examines how PMS influences employee motivation, performance, and organizational outcomes. The introduction provides background information, problem statements, research hypotheses, aims, objectives, and research questions. The literature review explores the importance of PMS, its implementation, the role of human resource management, and various performance management processes. The methodology chapter details the research process, philosophy, approach, design, data collection techniques, and analysis methods. Findings from a primary analysis of OCBC Bank employees are presented and discussed, including the impact of training and development programs, rewards, and performance appraisals. The conclusion summarizes the key findings, links the objectives, and provides recommendations for improving PMS within the bank. The research highlights the positive correlation between a well-developed PMS and enhanced employee performance.

Running head: INTERNATIONAL HUMAN RESOURCE MANAGEMENT
International Human Resource Management
Name of the Student
Name of the University
Author Note

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Abstract
The present research includes the investigation on the research title “The Impact of
Performance Management System on Employee Performance: A case study of OCBC Bank “.
The major purpose of the research is to understand how performance management system
influences the performance of the employees. The introductory chapter provides a strong
background to the research, which reveals that HRM strategies are widely related to the
performance management system of the organization. This means if the HRM strategies are not
effective, the management might find it difficult to build the base of performance management
system. The literature review indicates that that if the employees’ performances are assessed and
based on that they are rewarded, they could be responsible towards organizational job and
responsibilities. The literature review also indicates that the human resource management plays a
strong role in developing performance management system. In order to conduct the research a
primary analysis has been conducted and the primary data has been collected from the employees
of Oversea-Chinese Banking Corporation Limited. The data has been collected from a
particular population size and the population size has been selected based on the probability
sampling technique method. The overall population size is 65 but 50 employees of OCBC
Bank has been surveyed. The findings indicate that performance management system has a
strong and positive impact on employees of OCBC Bank. The employees mention that training
and development programs developed by the firm are effective enough to keep performance up
to the mark.

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Acknowledgement
The completion of the dissertation gives me a great amount of satisfaction. I have gained
knowledge in several fields of human resource management and performance management
system. On the completion of the dissertation, I would like to thank a number of people who
have helped me to complete the project successfully. Firstly, I would like to thank my supervisor
for guiding me throughout the dissertation. I thank my colleagues for helping me to collect data
for the project. I thank my families and friends for encouraging me to work on the project.
Thanking you all,

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Table of Content
CHAPTER 1- INTRODUCTION....................................................................................................7
1.1 Introduction................................................................................................................................7
1.2 Background to the research.......................................................................................................8
1.3 Problem Statement.....................................................................................................................9
1.4 Research Hypotheses...............................................................................................................10
1.5 Research Aim and Objectives..................................................................................................10
1.6 Research Questions..................................................................................................................10
1.7 Significance of the study.........................................................................................................11
1.8 Dissertation Structure..............................................................................................................11
1.9 Conclusion...............................................................................................................................12
CHAPTER 2- LITERATURE REVIEW.......................................................................................13
2.1 Introduction..............................................................................................................................13
2.2 Importance of performance management system....................................................................13
2.3 Implementation of the performance management program.....................................................15
2.4 Role of human resource management in performance management system...........................18
2.5 Process of performance management......................................................................................21
2.6 Understanding performance applying theories and models.....................................................24
2.7 Research Gap analysis.............................................................................................................27
2.8 Summary..................................................................................................................................28
CHAPTER 3- RESEARCH METHODOLOGY...........................................................................29
3.1 Introduction..............................................................................................................................29
3.2 Research process......................................................................................................................29
3.3 Research philosophy................................................................................................................29

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3.4 Research Approach..................................................................................................................31
3.5 Research Design......................................................................................................................33
3.6 Data collection techniques.......................................................................................................34
3.7 Data analysis............................................................................................................................35
3.8 Sampling technique.................................................................................................................36
3.9 Reliability and Validity............................................................................................................37
3.10 Ethical Consideration.............................................................................................................38
3.11 Research Limitations.............................................................................................................38
CHAPTER 4- FINDINGS AND DISCUSSION...........................................................................40
4.0 Findings and Analysis..............................................................................................................40
CHAPTER 5- CONCLUSION AND RECOMMENDATION.....................................................70
5.1 Conclusion...............................................................................................................................70
5.2 Linking the objectives..............................................................................................................71
5.3 Recommendation.....................................................................................................................73
References and Bibliography.........................................................................................................74
Appendix........................................................................................................................................80

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List of Figures
Figure 1: Dissertation Structure.....................................................................................................11
Figure 2: Performance management framework...........................................................................17
Figure 3: Elements of human resource management.....................................................................19
Figure 4: Elements of Goal setting theory.....................................................................................25
Figure 5: Research Philosophy......................................................................................................29
Figure 6: Research Approach........................................................................................................31
Figure 7: Types of Sampling and their associates.........................................................................36

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List of Graphs
Graph 1: Tenure.............................................................................................................................41
Graph 2: Gender............................................................................................................................42
Graph 3: Age..................................................................................................................................44
Graph 4: Satisfaction level of employees......................................................................................46
Graph 5: Performance appraisal is essential in performance management system.......................48
Graph 6: Employee motivation will be affected by the performance management system..........50
Graph 7: Training and development programs are important in creating effective performance
management system.......................................................................................................................52
Graph 8: Rewards and benefits will have an impact on the overall performance management
system............................................................................................................................................55
Graph 9: Performance management system will facilitate in maintaining quality standards........57
Graph 10: Performance management system improves the team bonding of the employees.......59
Graph 11: Performance management system will facilitate in achieving the operational
excellence......................................................................................................................................62
Graph 12: Performance management system creates positive impact on the overall employee
performance...................................................................................................................................64

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Topic- The Impact of Performance Management System on Employee Performance: A case
study of OCBC Bank
CHAPTER 1- INTRODUCTION
1.1 Introduction
It has been identified that performance management is one of the most significant
human resource management practices as well as is crucial for every organization. Thus, to
enhance the performance of the employees, it is very significant to evaluate the performance at
the regular intervals to understand where they stand, what is being expected from the employees
and what they are actually contributing. However, it is also important to learn the impact of such
system on the employees. The research also focuses on the facts about how such system affect
the employee performance. According to Kehoe and Wright (2013), performance appraisal or the
performance review remains as the technique for individual employees. Here, Christian, Garza,
and Slaughter (2011) also commented that performance management is a holistic process that
brings together a large set of activities that collectively help to form an effective management of
individuals and teams. The major purpose of the study is to examine the impact of performance
management system on the employees. This chapter presents a set of issues that organizations
and the employees face while implementing and cooperating with such system. This section of
the study also presents the research questions and objectives based on which the research has
been conducted.

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1.2 Background to the research
According to Elnaga and Imran (2013), one of the significant elements of Human
Resource is performance appraisal, as all engaged parties supervisors, employees, Human
Resource administrators conventionally are dissatisfied with the organization performance
system and considers the appraisal process as the bureaucratic exercise or the distractive
influence. On the other side, Gunday et al. (2011) mentioned that appraisal involve the
identification of cause and effect relationship on which the employment as well as the labor
policies are based and it remains as the routine method that firms use to evaluate their
employees. Thus, it can be mentioned that it is a systematic evaluation that is as objective as
possible of an ongoing programs. Christian, Garza and Slaughter (2011) commented that this
practice aims to appraise the relevance and fulfillment of objectives, efficiency, influence and
sustainability as well as the effectiveness.
As put forward by Guest (2011), the organizational performance criteria must include
productivity, profitability, marketing effectiveness, customer satisfaction as well as the
employees morale. In such context, the employee performance is strongly associated with the
organizational performance, effective but it is observed that efficient employee performance
could positively influence organizational performance. On the other side, a study conducted by
Kehoe and Wright (2013) presented a framework of talent management which includes
recruiting, performance, learning, planning, career enhancement, measuring and reporting.
Moreover, to organize an organization effectively, the organizations must have to reconsider how
they hire, train and reward their employees. Thus, the organizational members could be
encouraged to be competitive. In this context, Gruman and Saks (2011) commented that
performance appraisal remains as a significant aspect of performance management, in itself it

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might not be considered as performance management; instead it become one of a series of tools
that can be used to deal with the performance. To the background of performance management,
Mithas, Ramasubbu and Sambamurthy (2011) mentioned that performance management can be
considered as the holistic technique integrating several activities that collectively contribute to
the effective management of individuals and teams to achieve high extent of organizational
performance. This is a strategic technique, which is particularly about the wider issues as well as
the long-term goals that connect several aspects of the business, human resource management,
organizational and members.
1.3 Problem Statement
The problem identified in the research concerns the impact of performance management
system on employee performance, which might negatively affect employee motivation,
performance, teams and the organization as a whole. This is not certain that performance
management system only has negative impact on employee and organizational performance.
PMS does positively influence employee performance but that depends on the type of methods of
performance management system applied by the organizations. Therefore, it is not known, how
and to what extent, the performance management system influences the employee performance
and this unknown fact creates the necessity of conducting a research on this context.
Performance management techniques in regional spheres are often considered and implemented
separately from other organizational practices. However, such separate technique could make
negative influence like employee deviation as well as performance issues. The current research
problem examined manner, which makes sure the synergy of the component parts within the
system to evaluate the role of Human Resource with regard to performance management system
and analyze the barriers faced in this technique regarding PMS and employee motivation.

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1.4 Research Hypotheses
H0-A well-developed performance and well-designed performance management system with
well thought-out approaches and practices can enhance employee performance
H1- A well-developed performance and well-designed performance management system with
well thought-out approaches and practices cannot enhance employee performance
1.5 Research Aim and Objectives
The aim of the research is to examine the impact of employee performance on the employees of
the organization. To achieve the purpose of the study, the study covers the following key
objectives.
 To critically investigate the components of performance management system
 To critically analyze the impact of performance management system on employee
performance
 To identify the major loopholes while improving employee performance parameters
1.6 Research Questions
 What are the components of performance management system?
 What is the impact of performance management system on employee performance?
 What are the major challenges found while improving employee performance
parameters?

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1.7 Significance of the study
The present study is significant for several reasons; its major significance is in
employee’s contribution in the organization with their performance in helping the firms
achieving its mission and given knowledge development in the area of performance
management. Moreover, the identification of the factors that influence performance management
system to be relevant to help employees achieving organizational objectives. Moreover, the
investigation of the issues could help to find the solutions to the issues and barriers faced by the
employees and the organization to meet their respective needs. The significance of performance
management system to the employees ensures that organization develops the required strategies
to introduce performance management but this could also help to figure out what exactly the
employees are supposed to contribute towards the achievement of the visions.
1.8 Dissertation Structure