Master of Public Policy (MPP)

Course: ZIGP 6106 Management

Name: Jason Loh Seong Wei

Matric No.: ZGA070004

Individual Assignment Question:

Critically analyse the key elements in performance management in relation to Malaysia

and another country. Do you think these measures are effective in increasing

productivity in organisations? Why?

a) Introduction

Performance measurement or appraisal is an integral aspect of managing an

organisation. The method and process of conducting performance measurement or

appraisal is normally termed as, “performance management.” Hence, performance

measurement is a core element in performance management. The objective of

performance measurement is to “evaluate or assess the effectiveness of specific

activities which are designated in the job description and scope to ensure that

organisational objectives are achieved.” Thus, performance management involves

directing and coordinating the entire structure and process of performance

measurement of the human resources in an organisation on a regular basis.

1

In performance measurement, an organisation conducts a comparison of the output or

tangible results set against a fixed standard. In a broader context, organisations now

engage in “benchmarking.” Benchmarking – as a continuous process of subjecting the

performance of the organisation to the best practices in the industry – is also a vital

component in any performance measurement to ensure competitiveness and viability.1

Figure 1. The relationship of performance management within the management matrix

Lebas (1995) argues that performance is defined as the “potential for future successful

implementation of actions in order to reach the objectives and targets” and that

“[p]erformance management precedes performance measurement and gives it

meaning.”2 Performance management is set within the broader context of management

1 See Donnelly, Jr., J. H.; Gibson, J. I. & Ivancevich, J. M. (1995). Fundamentals of Management. Richard D.

Irwin, p. 290.

2 Lebas, Michel J. (1995). Performance measurement and performance management. International

Journal of Production Economics, 41,pp. 23-35.

2

Management Human Resource Management

Performance Management Performance

Measurement/Appraisal

which consists of planning, organising, controlling and leading – as constituting the four

basic functions of management.3

There many more definitions of performance management which apply to public and

private sector organisations. Max Moullin defined performance measurement as

“evaluating how well organizations are managed and the value they deliver for

customers and other stakeholders.”4 A more complex definition is offered by Rogers

(1990):

“… an integrated set of planning and review procedures which cascade down through the organization to provide a

Source:

<http://www.sciencedirect.com/science?_ob=MImg&_imagekey=B6VF8-3YSXP6K-3-

1&_cdi=6004&_user=152948&_pii=092552739500081X&_orig=search&_coverDate=10%2F31%2F1995&_

sk=999589998&view=c&wchp=dGLbVzb-zSkWA&md5=f4f25a70ac9fa61f6c93a3661cd5d65b&ie=/

sdarticle.pdf>.

3 For a guide to planning, organising, controlling and leading, see Daft, R. (2008). The New Era of

Management. Thomson South-Western.

4 Quoted by Fabrizio Bocci. (2004). “Defining performance measurement – A comment.” Perspectives on

Performance (PMA Newsletter), 3(1/2).

Source: <http://www.balancedscorecardreview.it/c2005/Definition-of-Performance-Measurement.pdf>.

The Moullin article, Performance measurement definitions “Linking performance measurement and

organisational excellence.” International Journal of Health Care Quality Assurance, can be found at

Source: < <http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/

EmeraldFullTextArticle/Articles/0620200301.html>

3

link between each individual and the overall strategy of the organization.”5

There is also no clear agreement on the precise definition of business performance

measurement (BPM) system which is a term employed by scholars to refer to the

environment and framework in which organisations conducts performance

management.6

A BPM system enables the organisation to more effectively plan, design, control,

implement and monitor its performance measurement in each of the elements or stages

in whole process of performance management. However the lack of a precise and

“tightly-knit” definition of performance management – and by extension, BPM – means

that this applies to the elements themselves.

5 Rogers, S. (1990). Performance Management in Local Government. Longman: London. The above

passage was quoted by Smith, P. C. & Goddard, M. (2002). “Performance management and operational

research: A marriage made in heaven? The Journal of the Operational Research Society, 53(3), pp. 247-

255.

Source: <http://www.jstor.org/stable/822890>.

6 Franco-Santos, M. et al. (2007). “Towards a definition of a business performance measurement system.”

International Journal of Operations and Production Management. Vol. 27(8), pp. 784-801.

Source:

<https://dspace.lib.cranfield.ac.uk/bitstream/1826/2789/1/Towards%20a%20definition%20of

%20business%20performance%20measurement%20system.pdf>.

4

Nonetheless, for the purposes of this essay, the elements of performance management

can be reduced to the following:7

Planning;

Monitoring;

Developing;

Rating; and

Rewarding.

This essay will analyse the performance management of the public and private sectors in

both Malaysia and Singapore as a comparison. The analysis will include the elements of

performance management and their impact on productivity.

b) Public Sector – Malaysia and Singapore

In Malaysia, performance management is increasingly used in the public sector as an

important measure in the on-going modernisation process to improve efficiency and

productivity in both the administrative machinery and delivery mechanisms and provide

value for stakeholders, particularly the public as customers. An updated performance

management approach was introduced on 1 January 1992 by the Government of

7 US Office of Personnel Management. Source: <http://www.opm.gov/perform/overview.asp>.

5

Malaysia through the Public Service Department (PSD).8 This was known as the New

Performance Appraisal System (NPAS).9

The NPAS is a continuous process which begins in January and ends in December

annually.10 Unlike the traditional outlook which treats performance measurement as

purely “unilateral,” i.e. the value of output is determined solely on one side by the

performance rater, the contemporary approach is more “bilateral” or

mutually/reciprocally conditioned whereby there is an information exchange. That is,

both sides as equally subjects provide input into the performance measurement

exercise.11

This is demonstrated in the context of the public sector in Malaysia. Rusli & Azman

(2004) mention that the initial stage is a meeting encompassing senior officers and rank-

8 Rusli Ahmad & Nur Azman Ali. (2004). Performance appraisal decision in Malaysian public service. The

International Journal of Public Sector Management, Vol. 17 No. 1, pp. 48-64.

Source:

<http://www.emeraldinsight.com/Insight/

ViewContentServlet;jsessionid=8DF853935CE84500EF639550D16A1C0A?Filename=Published/

EmeraldFullTextArticle/Pdf/0420170103.pdf>.

9 Ibid.

10 Ibid.

11 Ibid. As citing Armstrong, M. & Baron, A. (1998). Performance Management: The New Realistic, Institute

of

Personnel and Development (London).

6

and-file to determine departmental activities for the year, detailed programmes and

projects, etc.12 The next stage requires that first rater officers (FRO) and second rater

officers (SRO) project the targets and key performance indicators (KPIs).13 The process

represents a two-way interaction between the subordinate and the supervisor.14

Figure 2. Elements in the performance appraisal process in the Malaysian public sector

The employees is responsible for implementing the detailed task activities as agreed.

The mid-year performance review starts in June to compare the employees’s actual

performance and targets. A mid-year performance revision of work progress is required 12 Ibid.

13 For a recent discussion on the development of KPIs in the Malaysian government, see Ismail Adam. (12

July, 2009). “Taking public service beyond the ordinary.” New Straits Times.

14 Ibid.

7

between June and July. The NPAS is also flexible in that it allows for the planning and

targeting to be changed according to constraints, pressures and other factors which can

affect work performance.15

After this is preparation of the performance appraisal report by a performance appraisal

committee (PAC) which functions as the co-ordinator. During the preparation, the PAC

will collect the relevant evaluation forms – the first half of which has been filled in the

employees concerned – and hand them to the FRO as the immediate supervisor for

assessment.16

If and when necessary, the FRO and the employees will have a preliminary discussion

regarding the performance appraisal process and decision. Only then will the decision

be subjected to the SRO for the overall departmental rating. The next stages are the

performance appraisal and salary movement co-ordination.17 PAC will maintain all the

performance appraisal reports and submit them for action by the Board of Salary

Movement (BSM). BSM is also responsible for performance appraisal co-ordination.

However, there had been strong criticism of the NPAS emanating from Congress of

Union of Employees in the Public and Civil Services (CUEPACS), the union representing

15 Ibid.

16 Ibid.

17 Ibid.

8

the welfare and interests of civil servants in Malaysia.18 A survey by the CUEPACS

showed that 90 per cent of civil servants were dissatisfied with the NPAS.19 The main

reasons had to do with lack of objectivity and competency in performing the appraisal.20

Figure 3. An outline of the NPAS from the perspective of the rater21

On 1 November 2002, a revised scheme called the Sistem Saraan Malaysia (SSM) or its

English equivalent, Malaysia Remuneration System (MRS) was introduced.22 To

18 Op. cit.

19 Ibid.

20 Ibid.

21 Known as cognitive processing model (CPM).

22 Ibid.

9

complement the MRS, a sub-tool termed the Competency Level Assessment (CAL) or

Penilaian Tahap Kecakapan (PTK) was designed to raise the capacity and capability of

civil servants in knowledge and skills, including information and communications

technology (ICT) to create a knowledge worker (k-worker).23 Unfortunately, MRS and

CAL were subjected to the same criticism by CUEPACS. Intriguingly, CUEPACS thought

that the NPAS was better and urged for a revamp in favour of a more “workable”

appraisal scheme.24

One crucial area where performance management is linked to the modernisation

process has been the introduction of an e-government which involves the

implementation of ICT which was in introduced in 1996 as one of the seven flagship

programmes of the Multimedia Super Corridor (MSC).25 The agency tasked with the

architecture and construction of ICT initiatives in the public sector towards an e-

23 Sayed Mahmud Afdhal Yamani. Penilaian tahap kecakapan (competency level assessment) as a

problematic human capital developing strategy for Malaysia’s public servant. Network of Asia-Pacific

Schools and Institutes of Public Administration and Governance (NAPSIPAG).

Source: <http://www.napsipag-research.org/pdf/SAYED.pdf>. See also Syed Omar Sharifuddin &

Rowland, F. (2004). Benchmarking knowledge management in a public organisation in Malaysia.

Benchmarking: An International Journal. Vol. 11 No. 3, pp. 238-266.

24 Ibid.

25 “A decade of e-government.” (12 October 2009). The Star.

Source: <http://www.mampu.gov.my/pdf/star121009.pdf>.

10

government is the Malaysian Administrative Modernisation and Management Planning

Unit (MAMPU).26

Simultaneously, ICT is employed to foster an integrated performance management

system to:27

• Produce a single, integrated platform for collaboration and information sharing;

• Promote access and integrate data automatically from disparate operational, budget,

performance planning and cost accounting systems;

• Boost links between programme and service costs at the individual agency level;

• Consolidate information from all departments and agencies for a 360-degree view of

performance; and

• Use analytics to transform that information into insights that can drive confident

decision making.

26 Website: <http://www.mampu.gov.my>.

27 Source: <http://www.mampu.gov.my/1e-gov/papers/Plenary5/P5P1.pdf>.

11

Raha and Abdul Razak (2005) note that the outcome had been mixed.28 One of the

critical findings was the lack of a consistent and thorough conformity to the

implementation of the e-government blueprint.29 This resulted in an uneven application

of the ICT to the entire public sector organisational structure. Such a characteristic

feature which currently besets the public sector not only impedes the full extent of

efficient and effective administration and delivery.

Performance management gets bogged down by a narrow focus on remedial measures,

instead of setting KPIs to drive strategies towards developing the potential of

employees. Thus, the formulation of new performance measures in tandem with

improved existing performance levels cannot take place. The end result is that

performance management cannot properly complete its “full cycle.”

28 Raha Othman and Abdul Razak Rahmat. (2005). The analysis of electronic government blueprint for

implementation towards the actual e-government implementation.

Source:

<http://eg2km.org/articles/The%20Comprehensive%20Analysis%20of%20e-Government%20Blueprint

%20for%20Implementation%20towards%20the%20Actual%20e-governemnt%20Implementation.pdf>.

See also Sharifah Mariam Alhabshi. (2009). Case Studies on Government Programs and Policies. Kuala

Lumpur: University of Malaya Press.

29 See also Raha Othman. (2005). A comprehensive analysis of electronic government blueprint for

implementation towards the actual e-government implementation. (Master’s thesis, Universiti Utara

Malaysia).

Source: <http://ep3.uum.edu.my/1329/1/RAHA_BT._OTHMAN.pdf>.

12

Furthermore, employees are demoralised and lack confidence in the performance

management system. And they suffer a drawback in terms of output for fear that it will

be subjected to overly-rigorous standards. Implicit in this scenario is also the impact on

productivity. Noore Alam (2006) has documented the persistent sluggish performance

of the Malaysian public sector despite the introduction of performance measurement

schemes in “Public management reform in Malaysia.”30

For example, the public sector recorded 58 per cent increase in formal complaints from

the public. The complaints revolved around issues such as delays in service provision,

unfair actions/decisions on part of administrators, abuse of power, misconduct of the

officials, failure to enforce rules are among the common complaints made to and

regularly received by the PCB (2003).31

In addition to the NPAS, there is also the Malaysia Modified Budgeting System (MBS).

The MBS offers “greater managerial flexibility and accountability … it performs on par

with international best practice and is being used in some developing countries as a

model” World Bank Report (1999).32 The MBS makes use of Integrated Performance 30 Noore Alam Siddique. (2006). “Public management reform in Malaysia.” International Journal of Public Sector

Management, 19(4), pp. 339-358.

Source: <http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/

EmeraldFullTextArticle/Articles/0420190403.html>

31 Ibid.

32 Public Expenditure Management in Malaysia: How Malaysia Performs Malaysia, cited in Thomas, K.

(2007). Integrated results-based management – the Malaysia experience (Part III). Managing for

13

Management Framework, which provides baseline data that allows measurement of

comparable progress and results at predetermined intervals.

Performance data are explicitly focused on measuring performance progress areas such

as key result areas (KRAs), goals, objectives, outcomes, outputs, and activities. Such

performance data are monitored against predetermined targets.33 The MBS was actually

introduced in 1990 and revised as the Integrated RBM (IRBM) system in 1999 to take

into account the “missing links,” namely:34

It did not integrate the operating and development budgets, and the personnel

performance system; and

It created only limited linkages between budget performance, resource usage, and

policy implementation.

Despite the revision, there were still short-comings which had to be rectified. The

corrective action was a consequence of integrating a unique computerised applications

solution or platform known as the PPMSTM8 (Programme Performance Management

System) in 2004.35

Development Results Principles in Action.

Source: <http://www.mfdr.org/sourcebook/2ndEdition/4-2MalaysiaRBM.pdf>.

33 Ibid.

34 Ibid.

35 Ibid.

14

In Singapore’s public sector, performance management is geared towards efficient

allocation of resources. Thus the budget allocation is linked to the ministry’s

performance. And one of the critical tools used to measure performance in the public

sector is the balanced scorecard (BSC).36

It was conceived by Robert Kaplan and David Norton as a “performance measurement

framework that added strategic non-financial performance measures to traditional

financial metrics to give managers and executives a more 'balanced' view of

organizational performance.”37 The BSC methodology was adopted to achieve the

following objectives:38

Clearer linkages between vision, mission and action;

Balanced view, internally and externally;

Proactive management; and

Simple and critical performance measures.

36 Kon, D. “Performance measurement and management: a Singapore perspective.” Measuring Business

Excellence, 9(3).

Source:

<http://www.emeraldinsight.com/Insight/ViewContentServlet?

contentType=NonArticle&Filename=Published/NonArticle/Articles/26709caf.004.html>.

37 Source:

<http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx>.

38 Ibid.

15

An example where BSC has successfully applied is the court system. The BSC started

with one division, i.e. the Small Claims Court as pilot project in 1998.39 A Steering

Committee reviewed and monitored the BSC every month. After 6 months, the Steering

Committee decided to cascade the implementation of the BSC to the entire judiciary.

Chan Wai Yin, Director of Research and Statistics Unit stated that:

“The pilot programme proved that the scorecard provided a clear advance over the existing performance measurement system. As the scorecard is a predictive system we were able to detect early warnings of what was going to happen and so take preventative action. The scorecard made it far easier for us to see what we were doing and how we were doing it. We also discovered that the scorecard significantly improved communications. Being a two-way system whereby employees could better report and discuss performance we found it actually changed the whole paradigm of performance monitoring, improvement and measurement.”40

The key success factors for the BSC implementation in the Small Claims Court of the

Singapore judiciary could be attributed to the a) commitment of the top management

commitment; b) establishment of a clear purpose of its implementation; c) positive

attitude to change in the organisation; and d) effective communication of the goals and

KPIs within the organisation.

39 Enterprise Performance Management (EPM) Review.

Source: <http://www.epmreview.com/Resources/Case-Studies/Subordinate-Courts-Singapore.html>.

40 Ibid.

16

c) Private Sector – Malaysia and Singapore

BSC is a favourite tool in performance management by private sector organisations.41 In

a study on small and medium-sized enterprises (SMEs) in Malaysia with a special focus

on healthcare service providers (i.e. private firms contracted as vendors to the public

healthcare system), it was found that the implementation of BSC in four key areas of a)

learning and growth; b) mission and vision; c) customer satisfaction; and d) internal

business perspective are vital for organisational development.42

On the other hand, where a market or industry is dominated by oligopoly, there is no

incentive to measure and benchmark performance against best practices to improve

technical efficiency and reduce wastage.43 This is amply illustrated in the case of

Malaysia’s container haulage industry where there are very few players, and many of

the existing ones are subsidiaries of conglomerates such as MISC44 and Kontena

41 Abdullah Mohd Ayedh. (2007). Performance measurement practices in the Malaysian companies: An

exploratory study. (Master’s thesis, International Islamic University Malaysia).

42 Budi Suprapto, Hasnida Abdul Wahab & Jatmiko W. A. (2009). “The implementation of balanced score

card for performance measurement in small and medium enterprises: evidence from Malaysian health

care services.” Asian Journal of Technology Management. 2(2), pp. 37-49.

43 Zailani Mohd Zaid & Mohd Zaly Shah. (2007). “Performance measurement in Malaysian container

haulage industry: a critical evaluation.” (Presented at a postgraduate seminar, University Technology

Malaysia).

Source: <http://eprints.utm.my/1834/1/Zailani_and_Zaly__Transport_.pdf>.

44 The parent company of MISC is PETRONAS, a government-linked company (GLC). Website: <http://

www.misc.com.my>

17

Nasional.45 The implication is that even in the private sector, performance management

with specific reference to BSC still has a long way to go. In the meantime, the lack of a

“across the board” standard will perhaps to continue to persist.

Environmental management system (EMS) certification is also increasingly playing a

pivotal role in assessing and contributing to a firm’s performance in Malaysia.46 EMS

relates to the capacity of firms to effectively respond to environmental issues as integral

to their business strategy and performance.47 Though market demand is theoretically

“insatiable,” environmental management is concretely premised on the scarcity of

resources and constraints of space; hence, the concept of sustainability applies equally

to profit-driven institutions.

Through the introduction of international standard indices such as ISO14001, firms can

benchmark against good environmental practices. ISO 14001 consists of five essential

elements:48

45 Ibid.

46 Goh, E. A., Suhaiza Zailani & Nabsiah A. Wahid. (2006). “A study on the impact of environmental

management system (EMS) certification towards firms’ performance in Malaysia” Management of

Environmental Quality. Vol. 17 No. 1, pp. 73-93.

47 Montabon, F., Meinyk, S.A., Stroofe, R. & Calantone, R.J. (2000), “ISO 14000: Assessing its perceived

impact on corporate performance”, Journal of Supply Chain Management,

pp. 4-16.

48 Op. cit. Based on Boiral, O. & Sala, J.-M. (1998), “Environmental management: should industry adopt

ISO14001?.” Business Horizons, January/February, pp. 57-64.

18

Formal commitment embodied in a policy;

Planning;

Implementation and operation;

Checking and corrective action; and

Management review and continual improvement.

It has been found to have a positive impact on the business and environmental

performance of firms in Malaysia.49 Thus, they meet the environmental concerns of their

stakeholders, particularly customers and help to properly optimise the use of renewable

and non-renewable resources in an environment fraught with uncertainties, be it

natural (e.g. climate) or man-made (e.g. globalisation).

Whereas EMS applies more specifically to the former, in meeting the uncertainties and

challenges of man-made globalisation, there is a need for the private sector to

collaborate closer with the government in re-training and upgrading the skills of the

workforce.50 This is part and parcel of performance management. Indeed, the

introduction of the New Economic Model (NEM) in mid-2010 to coincide with the

introduction of the 10th Malaysia Plan is timely to spur the country towards high-income

level on the back of sustained productivity and innovation.

49 Ibid.

50 Hamisah Hamid (7 August, 2009). “Trained workforce will drive performance.” New Straits Times. Tan

Sri Sulaiman Mahbob in a Public Policy Colloquium lecture on “labour, wages and productivity” dated 22

March 2010 confirmed that this was the scenario.

19

In Singapore, the multi-dimensionality of total quality management (TQM) has impinged

on performance appraisal of the private sector. It has been shown that where TQM was

embedded in the performance measurement process of Singapore companies, their

productivity and output generally increased and improved.51 A longitudinal study on

Singapore Airlines (SIA) has found that its business and organisational performance in

the industry is almost unrivalled anywhere in the world due to its resilience and

competitiveness.52 One of the critical determinants in the success of SIA has been its

ability to generate a service excellence-oriented vision which continues to its enduring

hallmark.53 Thus, SIA’s performance management involves, inter alia, setting up very

high customer service standards. This is supported by a rigorous quality control system

in employee recruitment and selection.54 Hence, the productivity levels of SIA have been

enhanced in the context of TQM.

d) Conclusion

51 Shaukat A. Brah, Tee, S. S .L. & Rao, B. M. (2002). “Relationship between TQM and performance of

Singapore companies.” International Journal of Quality & Reliability Management. 19(4), pp. 356-379.

Source:

<http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/

EmeraldFullTextArticle/Articles/0400190401.html>.

52 Chan, D. (2000). “The story of Singapore Airlines and the Singapore Girl.” Journal of Management

Development. 19(6), pp. 456-472.

53 Ibid.

54 Ibid. Citing Asia Business Review (1996, p. 34).

20

By way of comparison, it is argued that the implementation of performance

management techniques such as the BSC has produced varying results in the Malaysian

and Singaporean public sectors. On the whole, the Singapore public sector fared better

than its Malaysian counterpart at the implementation level (e.g. controlling,

monitoring), although at the conceptualisation/planning level, both demonstrate

competency and sophistication.

To reiterate, the shortcoming in implementation has a bearing on the productivity of the

Malaysian public sector. In its Annual Productivity Report (2008), the Malaysian

Productivity Corporation (MPC) stated that public sector productivity only grew by

about 3.8 percent in 2008.55 Although this figure is commendable, it hardly constitutes a

“quantum leap” in productivity which is supposed to be boosted by performance

management elements and measures. On the other hand, productivity growth in the

private sector is comparable, i.e. on average trailing closely.56 In such a case, comparing

the performance of performance management in both the Malaysian public and private

sectors does not easily yield decisive conclusions.

Perhaps there should be a paradigm shift, at least in relation to performance

management approaches in Malaysian organisations, which de-emphasise the element

55 Chapter 7: Productivity performance of the public sector.

Source: <http://www.mpc.gov.my/v1/files/APR2008/Chapter7.pdf>

56 Chapter 1: Productivity performance of Malaysia.

Source: < http://www.mpc.gov.my/v1/files/APR2008/Chapter1.pdf>.

21

of rating or classification of an employee’s performance. Thus, the move away from

traditional outlook of a “flat” measurement whereby rating determines evaluation does

not go far enough.

Rather, whilst rating should not be necessarily displaced, the focus should be on the

element of motivation. Hence, the performance measurement process itself will be

subject to less controversy, e.g. on the subjectivity of the rater; and more on ensuring

self-evaluation. Such self-evaluation can then be put to rigorous comparison with that of

the rater, and any discrepancies or anomalies can be “ironed out.”

It is clear, nonetheless, the lack of total commitment and support by CUEPACS is a

strong factor discouraging or even hindering the performance management process in

the Malaysian public sector. Thus, the success of performance management in the

public sector in Malaysia requires the wholehearted consent of its rank-and-file

employees so that the introduction of a scheme will not be perceived as “unnecessary

pressure,” which ironically may affect work morale and motivation, and therefore

productivity.

In the case of the private sector scenario, again it is arguable that Singaporean firms

exhibit higher acceptance of benchmarking standards than do their Malaysian

counterparts. However, it is clear that Malaysia private sector are just as quick to adapt

to new performance management measures and use them to their own advantage.

22

What is needed is a dynamic synergy between the public and private sectors in

Malaysia.

The private sector can respond to the policies of the government by establishing

institutions which promote efficient performance and good practices in the work

environment of the various industries considered as part of total factor productivity

(TFP).57 The private sector can help to formulate, improve upon and monitor the

performance management measures in the industry.

One example is the formation of the Malaysian Alliance of Corporate Directors (MACD)

in mid-2009. The MACD aims to develop professional standards for the captains of

industry. Moreover, in view of the current global financial crisis and economic doldrums,

the call to ensure appropriately designed performance management measures is more

relevant than even to ensure realistic adjustments are correspondingly made to the

compensation and benefits (C&B) scheme(s).58

57 The MPC’s definition of TFP is “efficiency and effectiveness of all factors of production.”

Source: <http://www.mpc.gov.my/home/?sstr_lang=en&cont=ds&id=1i9&item=d1&t=4>

58 For performance management in the case of top executives, see Dharma Chandran. Manager@Work:

“Perform or perish.” (1 March, 2010). The Edge.

23

The private sector need not be overly reliant on external stimulus such as tax incentives

to boost productivity of the workforce. Instead, they can partner with the public sector

in enhancing the exchange of good practices and technical expertise so that the

performance management can enjoy “cross-fertilisation,” i.e. the “best of both worlds”

in the quest to boost productivity in line with gross domestic product (GDP), and elevate

the economic growth and development of the nation.

Selected bibliography:

1. Daft, R. (2008). New Era of Management (2nd ed.). Thomson South-Western.

2. Donnelly, Jr., J. H.; Gibson, J. I. & Ivancevich, J. M. (1995). Fundamentals of

Management (9th ed.). Richard D. Irwin.

3. Armstrong, M. (2000). Strategic Human Resource Management: A Guide to Action.

Kogan Page Ltd.

24

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