The influence of a 360-degree performance appraisal on labour productivity in an automotive manufacturing organisation

Abstract

Background: South Africa’s (SAs) decline in labour productivity in the manufacturing sector is a cause for concern. The sector turns to employees for innovative productivity improvement initiatives. Employees need to know what activities they are currently performing that need to improve. This is where a 360-degree performance appraisal system plays a growing role. The 360-degree performance appraisal is a valuable tool that provides an opportunity for employees to work together to identify strengths and areas that need improvement.

Aim: This study investigates the influence of a 360-degree performance appraisal system for the improvement of labour productivity in the automotive parts manufacturing sector in SA.

Settings: The study investigated the production and related experiences of an automotive parts manufacturing company that has adopted a 360-degree strategy. The company operates in the eThekwini district Municipality in KwaZulu-Natal. It assessed if 360-degree performance appraisal is responsible for the company’s labour productivity improvements.

Methods: The investigation was achieved by collecting pre- and post-360-degree quarterly data for spoilage, absenteeism, capital investment and labour productivity.

Results: The 360-degree performance appraisal has no influence on labour productivity improvement. However, past capital investment plays a significant role in labour productivity increase. Results also showed a relationship between spoilage rate and labour productivity improvement.

Conclusion: In order to maximise performance, a comprehensive performance policy must be developed, which aligns employee appraisal to performance. The study uncovered the strengths and weaknesses of a 360-degree performance appraisal system for labour productivity improvement in SA.