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Performance And Reward Management

  0 Downloads   |   15 Pages 3,520 Words   |   Published Date: 16/09/2017

Question:

Discuss about the Performance and Reward Management.
 
 

Answer:

Introduction:

Performance management acts as the measuring criteria for the progress of the organization. It helps the organization to establish goals and targets alongside supporting them for proper achievement. Suitable actions are devised through the performance management for attaining the goals set by the organization and promoting the overall improvement of the business (Posthuma et al. 2013).

Purposes of Performance Management

Considering such understanding, the primary aims of the performance management system are outlined below:

  • It ensures the proper understanding to the employees related to their job roles and their specific contributions to the achievement of organizational objectives.
  • The overall system focuses on developing and improving the healthy relationships between the management and employees.
  • It enables the involvement of proper motivation for the employees within the workplace and informs them that their individual contributions are valued highly by the organization (Talib, Rahman, and Qureshi 2013).
  • One of the primary aims of performance management is to offer reward to the employees for their exceptional contributions towards the predefined goals of the organization.

Relationship with Business Objectives

From the particular identification regarding the principle aims of performance management system as part of the organization, it can be determined that the development of the framework is based on supporting the organization to achieve its valuable targets. The overall system is designed by the combination of value-oriented processes for accomplishing the previously set goals systematically. Most importantly, it connects with the employees of an organization by knowing their values in conducting the business efficiently (Green et al. 2012). Performance management offers suitable understanding to the employees for developing a proper sense about their roles within the organization and the way they should be played successfully. Therefore, an appropriate relationship can be observed between the principles of performance management and the smooth accomplishment of the business objectives.

It is dictated earlier that the development of performance management is based on the involvement of some essential components. These components ensure that the objectives of the organization are attained successfully.

Components of Performance Management System – Three principal components facilitating the development of performance management are discussed and highlighted below:

  • Firstly, performance management satisfies the goal-setting criteria of the organization, as the process is required to formulate the targets (Cooke, Saini, and Wang 2014). As part of this certain stage, the system aids the organization to inform the employees about their particular contribution towards the achievement of the identified goals.
  • The second component of performance management is based on providing guidelines for improving the operations of the organization. As part of this element, the particular system distinguishes between the robust and weak areas of the organization to recognise the portion requiring further improvement. The Proper suggestion is provided after identifying the necessary areas.
  • The third component is known as the reward management system. As part of the scheme, the employees with the excellent performances are spotted out to provide them the adequate rewards for their contribution (Tatoglu et al. 2016). This particular system guarantees to provide necessary values to the employees for their contribution towards supporting the achievement of organizational targets.
Motivation from the business perspective refers to the strengthening of internal activities of the organization. It helps to promote the performance of the employees within the organization. Therefore, a direct relationship can be observed between the performance of an employee and motivation. For an example, the employee will tend to perform better if he/she is highly motivated within the workforce.

Relationship between Motivation and Performance Management – Different suggestions can be obtained related to the motivation and performance of the employees by considering the relevant theories of motivation.

Reinforcement Theory of Motivation: The particular theory focuses majorly on the current behaviours of the employees due to their specific impacts of the future consequences (Wales, Parida, and Patel 2013). The theory develops the guidelines to change or modify the behaviours of the employees according to the particular situation or surrounding environment of the workplace. Four different types of activities are mentioned by the theory in order to manage the behaviours of the employees.

  • Proper rewards such as pay hikes, bonuses, and promotions are provided to the employees for ensuring the repetition of the particular behaviour adopted by the employees within the workplace. These rewards are treated as positive reinforcement designed to motivate employees to increase their contributions.
  • In the case of negative behaviours of the employees such as avoidance or ignorance, strengthening the employee behaviours is attempted (Armstrong and Taylor 2014). The particular effort made by the organization is defined as the negative reinforcement, which ensures the necessary roles are played by the employees.
  • If the employees are performing his/her duties and conducting the responsibilities, then the individual is neither praised nor provided the reward. This particular process is known as extinction.
  • Lastly, the employees are punished according to the workplace policy if they are unable to continue with the standard way of behaviour.

Considering the particular discussion, it is worth to mention that the managers of an organization should need to play the pivotal role in this specific scenario (Zhu, Sarkis, and Lai 2013). The managers are required to inform employees for not repeating certain action while providing them guidance to earn positive reinforcement. Apart from that, the managers and the supervisors must need to give rewards to the employees for their high level of performances. Positive motivation can be provided to the employees with the help of this process.

 

Equity Theory of Motivation: The Equity Theory of Motivation ensures the maintenance of equality in the workplace for developing a balance among employees with their same amount of contributions. Without the quality maintained in providing promotions or other facilities to the employee, they tend to become disappointed in their performance or commitment towards the organization (Renwick, Redman, and Maguire 2013). Therefore, the managers are required to establish the performance management system carefully to provide a reward. Apart from that, it is necessary for the managers to set the specified targets for the employees to motivate them and remove the indifference regarding employee attitudes.

Purposes of Reward within a Performance Management System – From the perspective of the business organization, developing and providing rewards to the employees is done to motivate them properly. At the same time, it aims to retain the employees for a long-term period with the company while supporting the reduction of the cost associated with employee turnover. Employees are the most valuable assets of any business (Hajmohammad et al. 2013). The certain fact ensures the organization to provide them the adequate encouragement to facilitate their favourable contributions to the overall business. Therefore, the introduction of reward system as part of the performance management structure is based on offering recognition and encouragement to the employees for their desired level of commitment and extraordinary performance in the company. Apart from that, the reward management system directly contributes to the development of understanding about the expectations of the organization from the staffs.

Components of a Total Reward System – Multiple components are insisting the development of a total reward system. These are discussed below:

Individual Growth: The certain element makes sure the sound investment is made to the employees of the organization. As part of the process, new learning opportunities are provided to the employees through the different training programs along with them the unique career opportunities by helping them to participate in the new job openings (Van Dooren, Bouckaert, and Halligan 2015). Apart from them, the skills of the employees can be enhanced to drive them for handling an overseas project of the organization.

Compelling Future: It is one of the significant elements of the total rewarding system, which includes the growth and success of the company. The component ensures the organization to maintain its reputation and brand image in the midst of the identified markets, stakeholders, and employees by improving the vision and values of the company.

Positive Workplace: The certain component promotes the leadership and commitment within the workplace by working on the attitudes of the colleagues and external parties (Mone and London 2014). Besides, the internal communication of the organization is largely enhanced by the process with influencing the involvements of the organizational members.

Total Pay: This particular category involves considering the various performance criteria for recognising the skills and expertise of the employees and providing them basic or variable payments according to their performance. Therefore, the central focus of the component is to provide additional benefits to the employees for their performance (Duncan and Natarajarathinam 2016). Moreover, suitable recognition is also provided to the employees within the workforce based on the tasks provided to them.

 


It is highly essential for an organization to conduct a review of the performance of individual employees. It should include the behaviours demonstrated by the employees as part of the workplace. Based on the performance of an employee, it could be graded as good or poor depending on the precise outcomes.

Factors to be considered for Manging Good or Poor Performance – In order to ensure the adequate review of performance, the performance management system of the organization must need to consider some major factors, which are briefly elaborated in the following paragraphs:

Planning: Planning refers to designing the goals and expectations of the organization, which are required to be followed by the employees to accomplish the previously set targets (Stahl et al. 2012). Therefore, the management must need to involvement employees in the planning process to provide them the useful understanding regarding their roles and contributions necessary for the achievement of the identified targets.

Monitoring: The roles played by the employees in accomplishing the tasks are required to be monitored properly for measuring the employee performance. Such process also ensures the appropriate feedbacks are provided to the employees in the right time to create a high possibility of attaining the proposed goals and targets. Monitoring includes the regular checking of methods employed by the organization and its employees to support coping up with the determined standards related to the essential requirements.

Developing: Developing refers to the development and improvement of employee performance (Alfes et al. 2013). The process is based on enabling the employees to introduce the new skills and performance standards by regularly implementing the training sessions and providing new assignments.

Rewarding: Proper system of providing rewards to the employees must need to consider by the performance management for pleasing the employees for their expertise and performance in the company. It will certainly provide better impact to the overall performance of the organization.

 


It is necessary to collect the information related to the performance of the employees as part of the workforce to make sure the employee behaviours are in line with the organizational objectives. The result of the process facilitates the organisation to perform accordingly (Shahin 2014).

Two Items of Data – Several types of information include the employee performance related data, sales report, and the project deadlines. Apart from that, sensitive data related to the employee performance can be obtained by collecting feedbacks from others, personal observations to the practices and approaches undertaken by the employees, and conducting reviews of the employees. In this case, the process of collecting feedbacks involves communicating with the various staffs and subordinates about the specific employees to compare the data with the final report to be submitted. The process will sufficiently help to judge and reward the individual performance.

Apart from that, there is other useful data source providing valuable contribution to generating a determination about the performance (Schiemann 2014). These sources include reviewing the past performance report, determining the present organizational purposes, and the standard documentation related to the career goals of the employees.

In order to clarify the purpose, frequency, and processes undertaken by the performance management system, it is essential to consider a company from a certain industry. Here, a particular company from the energy industry is recognized for raising the required information.

Purposes

The fundamental purpose of developing the performance management system of an energy company is to build an annual cycle system, which integrates the budgeting and business planning process (Alfes et al. 2013). The identified cycle develops with the combination three individual stages held annually to continue over the year.

Frequency and Process

First Stage: In the initial stage, the work agreement of the company is suitably planned while the occupational standards are developed to meet with the required competencies. On the other hand, the personal development planning process is employed during the stage with compliance with the organizational vision and aims.

Second Stage: The second stage includes maintaining the ongoing processes of the business throughout the financial year with the aim of upgrading the data related to the information and work agreements (Duncan and Natarajarathinam 2016). In this case, the actions and approaches of the organization must need to be shaped for providing balance with the environment in which the company is operating. As part of the process, meetings are held in frequent intervals within the organization to discuss the progress of the company.

Third Stage: This particular stage is initiated in the ending of the financial year to review and judge the performance level to develop a comparative overview of the overall functionality with the required level of performance.

 

Conducting the Meeting

A meeting need to be arranged positively with the employees, as it contributes to the enhancement of their morale. It helps to lower the frustration and stress among the employees to encourage them to develop innovative ideas for the organization. Therefore, the critical emphasis must need to be provided to the content and presentation of the meeting in order to ensure it to conduct positively. Some essential guidelines are identified to conduct the meeting in a favourable manner (Duncan and Natarajarathinam 2016). First, the outstanding performances and achievement of the specific employees must need to be praised in order to offer them the well-deserved recognition. Secondly, the current goals and views of the company should need to be elaborated to the staffs to help them build superior ideas about their individual job roles. Thirdly, the employees should need to be individually approached for determining the sense about their problems faced by them. It will make sure the emergence of relevant suggestions and feedbacks, which should need to be welcomed during the meeting (Alfes, et al. 2013). Lastly, the open criticism during the meeting should be avoided strictly to maintain the workplace balance and disciplines.

Review Form

BOTOX  UK LTD

Performance Review Form

Date of Review:

Period Covered:

Name of Manager:

Name of Employee:

Job Role of Employee:

1. Summary of discussion on performance over the last six months

 

The performance has been deteriorated in the last six months, as the organizational targets are not fully achieved during the period. It can be caused majorly due to the lack of motivation or some other benefits required by the employee.

 

2. The quality of the work provided, recording areas that have gone well and those where improvement is required

 

During the last five years the performance was exceptionally well, which should be considered as the good area. However, during the past six months, the performance dropped, as the organizational objectives and expectations have become highly complicated resulting the inadequately communicated to the employee.

 

3. Record performance against targets set and in those cases where they have not been met, record the reasons given and your views on these

 

Based on the comparison with the identified target of the company, the employee fails to achieve the expected sales target. It is observed that only the half of the proposed target is met by the employee over the last few months. According to my view, the possible reasons behind the scenario might be the ineffective understanding of the organization’s objectives and the lack of cooperation from the superiors or subordinates.

 

4. Outline agreed actions to overcome any shortfall against targets including such factors as training and development needs, equipment needs or medical support

 

Considering the situation, it can be assumed that the employee would require the proper training and development for improving her performance towards the organization. Therefore, the suitable implementation of training and development program is essential for the organization.

 

5. Indicate whether a performance related bonus should be made at current rates. (In circumstances where the full target has not been met a case must be made before any partial bonus payment can be paid, with reasons provided for that recommendation)

 

The performance related bonus should need to be developed at a rate better than the current rate. Because of such factor, the employees will motivate to provide their full commitment to the organization and the targets can be easily achieved by them.

 

Signed:

Date:

Line Manager:

    

Reflection on the Outcomes

Based on reviewing the feedbacks collected from the identified staff, multiple useful understandings has been gained by me. Firstly, it is identified that the need of proper training and development is primarily considered by the organization to boost the performance of the selected employees. Apart from that, integrating motivation within the management is another important criterion that the business should need to prioritise for developing the employee morale and willingness to participate. However, the task seems to be is difficult due to the fullest commitments and supports are required from the employees (Schiemann 2014). In order to conduct the performance review, I had to conduct an in-depth research about the involving processes as part of the framework and the efforts established by the employees. From the overall efforts put forwarded by me, I can acknowledge that performance management is not only associated with the past but also connected with the future wellbeing of the company (Hajmohammad et al. 2013). Apart from that, I essentially gathered the knowledge to comply with the guidelines of the employee appraisal and reviewing process. In this case, I have come to know the essence of periodic documentation of throughout the assessment period to measure the employee progress.

 

References

Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C., 2013. The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model. The international journal of human resource management, 24(2), pp.330-351.

Alfes, K., Truss, C., Soane, E.C., Rees, C. and Gatenby, M., 2013. The relationship between line manager behavior, perceived HRM practices, and individual performance: Examining the mediating role of engagement. Human resource management, 52(6), pp.839-859.

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Cooke, F.L., Saini, D.S. and Wang, J., 2014. Talent management in China and India: A comparison of management perceptions and human resource practices. Journal of World Business, 49(2), pp.225-235.

Duncan, M.S. and Natarajarathinam, M., 2016. Best practices of sales force compensation within small, to medium sized enterprises: the metrics associated with performance appraisal. The association of collegiate marketing educators, p.123.

Green Jr, K.W., Zelbst, P.J., Meacham, J. and Bhadauria, V.S., 2012. Green supply chain management practices: impact on performance. Supply Chain Management: An International Journal, 17(3), pp.290-305.

Hajmohammad, S., Vachon, S., Klassen, R.D. and Gavronski, I., 2013. Lean management and supply management: their role in green practices and performance. Journal of Cleaner Production, 39, pp.312-320.

Mone, E.M. and London, M., 2014. Employee engagement through effective performance management: A practical guide for managers. Routledge.

Posthuma, R.A., Campion, M.C., Masimova, M. and Campion, M.A., 2013. A high performance work practices taxonomy integrating the literature and directing future research. Journal of Management, p.0149206313478184.

Renwick, D.W., Redman, T. and Maguire, S., 2013. Green human resource management: A review and research agenda. International Journal of Management Reviews, 15(1), pp.1-14.

Schiemann, W.A., 2014. From talent management to talent optimization.Journal of World Business, 49(2), pp.281-288.

Shahin, N., 2014. Role of Employee Retention Practices in Indian Industry–A Study of Select MNCs in Jamshedpur. International Journal of Engineering and Management Research, 4(4), pp.206-213.

Stahl, G., Björkman, I., Farndale, E., Morris, S.S., Paauwe, J., Stiles, P., Trevor, J. and Wright, P., 2012. Six principles of effective global talent management. Sloan Management Review, 53(2), pp.25-42.

Talib, F., Rahman, Z. and Qureshi, M.N., 2013. An empirical investigation of relationship between total quality management practices and quality performance in Indian service companies. International Journal of Quality & Reliability Management, 30(3), pp.280-318.

Tatoglu, E., Bayraktar, E., Golgeci, I., Koh, S.L., Demirbag, M. and Zaim, S., 2016. How do supply chain management and information systems practices influence operational performance? Evidence from emerging country SMEs.International Journal of Logistics Research and Applications, 19(3), pp.181-199.

Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the public sector. Routledge.

Wales, W.J., Parida, V. and Patel, P.C., 2013. Too much of a good thing? Absorptive capacity, firm performance, and the moderating role of entrepreneurial orientation. Strategic Management Journal, 34(5), pp.622-633.

Zhu, Q., Sarkis, J. and Lai, K.H., 2013. Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management,19(2), pp.106-117.

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