Performance Management And Reward System - Essay Example

Performance management and reward system Performance and reward system is a very important function in human resource management and the organisation as whole. This study looks at the importance of Performance Appraisal, Absence Management, and Total Reward Systems and their roles in human resource management and the organization as a whole, the essay critically discuss the integration of performance management and reward system with other functions of human resource management and the utilisation of appropriate HRM models and theories. Various examples are used to illustrate this function and explain the need for integration across HRM practices, & other departmental functions, (horizontal) and the business & strategic management of the organisation as a whole (vertical) One of the importance of Performance management is to help an organisation achieve set goals and objectives. It’s achievement is through maximisation of individual employee, a team or the entire organisation which is the function of human resource management. To enable employees to be focused and achieve the company’s business plan and objectives performance management and reward system must be there in any institution. It is an important tool in management because it enables individuals to attain self actualisation and strengthen the employee in line with achieving the company’s goals and objectives. It also enables the establishment to reward individuals based on their contributions in goal realisation (Thomas, 1994). Achievements of business objectives are an important survival tool for any organisation.  For the accomplishment of business performance, objectives need to be established and explained by the upper management. After sharing the objectives, they should be measured, appraised, monitored and actions taken. However, the performance and management process involves the entire business objectives evolution from its inception until its end. For an organisation to increase the strength of the employees, they have to measure it. The other importance of performance management is giving current workers, progress, and formalized feedback. However, formalized feedbacks are a few things totally different. It involves stepping back to evaluate workers performance of crucial competencies and goals. It is also the maximum amount concerning the “how” because the “what”. Formal feedback helps all the staff and also the organization grasp who is playing, who wants development and who is not a right match. The other importance is the performance-based development. For each worker, it is important to spot areas that require develop supported performance, invest in acceptable coaching and development activities. It also helps to monitor enhancements in performance to make sure they are effective. This can help to improve everybody’s performance. A lot of organisation managers neglect these important performance management functions since they are terribly time overwhelming and need some competent skills. However, that should not be a barrier. There are lots nice; reasonable performance management applications offered that automates the full method, and even offer tools that help to create it and make it easier to align goals, write feedback and select development activities. Grouping package is one amongst the leading suppliers; however there are many others as well. Reward systems will and sometimes do have associate influence on the effectiveness of structure modification efforts. Once the impact of a modification program on the reward system is not taken into consideration, the reward system will become a crucial impediment to people accepting the modification. On the opposite hand, once the reward system is taken into account and made a part of the modification strategy, it will create a positive contribution to a modification effort. It is exactly due to the general nature of organizations that nearly any modification effort has implications for the reward system. The capability of the employees is improved through motivation and rewarding hard work. For an organisation to retain motivated workers and achieve high performance there should be development programs which has motivational reward strategies and challenging work. This will enhance career development and progressive job satisfaction. This management process is usually developed to help employees understand what they need to learn and how they need to learn. Workers are supposed to be in continuous growth and learning. Well informed workers deliver high quality work leading to improved performance of the organisation. The extent of skills, employees’ behaviours and knowledge are critical to the organisation’s ability to execute its activities (Edward & Alber, 2011). The content theories investigate what motivates individuals at work. Maslow, Hergberg and Alderfer contributed considerably to content theories. These are terribly in short made public here: Hierarchy of desires: Abraham Maslow planned a hierarchy of 5 needs: Physiological, Safety (emotional and physical safety- insurance, pension), Love (affection and affiliation – belongingness, social). Also, the need for Esteem and Self-actualization (personal growth and realization of potential). People could obtain fulfilment of upper order desires before their lower order desires are consummated. Maslow suggests that a glad would like is not a rational motive. The exception, however, is that the self-actualization would like whose gratification will increase in growth-motivated people. A good performance management system should have the following components: Review of achievements; these achievements should be measured against the set work goals and development goals. Goals for the next 12 months; goals set should be (SMART) specific, measurable in certain units, should be achievable results oriented and should account for time. Professional learning needs; this involves identification of individual employee learning needs for the next business period. Career development plan involved; due to the changing technology and customers requirements, on the job training is important since it keeps an employee abreast of the changing technological environment. Motivation is closely related with performance management; this relationship is very clear in that, high motivation will lead to better performance, so this is a very important component of an organisation. The motives of behaving in a particular way are many. Whether a person is left behind at work to finish a report for his or her manager will depend on various variables: the predication as to what will happen if the report was not finished that day; what arrangements has the employee made at home for not arriving at the usual time? E.L Thorndike explains this in his theory of reinforcement has described this relationship. E.L Thorndike’s law describes the relationship between behaviour and outcome. The theory concentrates on improving employees on the job behaviour through the appropriate use of positive reinforcement raising their pay or job promotion as a reward for a positive behaviour. The management can also choose to ignore either a positive or negative behaviour; this should only be used on temporally basis. Punishment and threat can also be done for those with bad behaviours. Edwin Locke introduced this goal setting theory in the late 1960s. In this theory, Edwin encourages managers to involve employee in setting goals of the organisation. This makes an individual to fell that they are so important to the organisation and they are part of running the institution. After every financial year, employees need to get feedback on their achievements and compare them with the set target to assess their performance (Clarence & Thorndike, 2012). Employees must be committed to the goal and believe that they are capable of performing tasks. There are various factors to consider when managing employees’ performance: one is organisational objective; there must be openness between the individual employee and the manager. Secondly the Managers and employees should both have the necessary skills to be able to use the process properly for mutual benefit. Also, there should be objectivity in forming and communicating judgements, unfair judgement can lead to disappointed worker who will not give good performance. Lastly all the managers should have the necessary training on performance management and appraisal process. The main purposes of rewarding employees within a performance management system are; to increase the retention rate, to motivate key employees and minimize turn over. It is well known that people are the most valued asset in an organisation; For example, in the company where I work, The manager’s award is an extra short term reward, that is given to outstanding employees that performed well by achieving set goals and objectives in given financial period. The total reward system is a collection of tools that the human resource manager has in his hand, and he can use it to attract, one of its roles is motivate and retain workers. From the employee view point, the total a reward is everything that he or she perceives to be of great value resulting from the employment. The reward covers both financial and non financial pay to show appreciation. Some of the components in the reward system are discussed below. Compensation is an important component of the reward system that entails: basic payment system (this is annual or monthly salary rate) and payments that vary depending on task or incentives pay systems (an increase in sales commissions and payment made depending on skills possessed). Benefits are used as a supplement to the cash compensation that the employees receive and are meant to protect employees and the family from financial uncertainties. Examples of this benefits: social insurance, life insurance, retirement plan, medical care insurance, favourable savings scheme, paid gym membership, breaks, holidays provided by the company, and vacations. Performance is an important component of the organisational objectives and involves how team and individual effort are organised towards the achievement of business goals and objectives. The recognition of good performance motivates the employees by raising their self esteem, of management, trophies or certificates. It can also be in the form of financial provision by giving special attention to their action, hard work, behaviour and performance. Recognition programs acknowledge and appreciate the employee’s efforts immediately after the task has been completed. Recognition can be material provision or verbal appreciation in conferences or seminars where there is important board. Development and career opportunity include providing learning opportunities (e.g. on the job training, workshops and seminars and conferences attendance, collaborating with corporate universities for employees training needs, self developed techniques, and creating opportunities for employees to learn new technologies. Also, provide coaching or mentoring (e.g. trainings on leadership, formal and informal mentoring systems, association memberships, and exposure. Performance appraisal is essential for every human resource and management function. According to Heyel, performance appraisal is the method of evaluating the performance and qualifications of the staff in terms of job needs, for body functions like placement, choice and promotions, to supply monetary rewards and alternative actions that need differential treatment among the members of a team as distinguished from actions touching all members equally. For instance, the amount of quality articles to be churned in a week, in a publishing company is, let’s say, ten. This can be the goal of the organisation. This goal needs to be set in coordination with the writers. The most important thing here is accomplishing this task cleanly over the week instead of the setting of a technique to accomplish a similar task. Employees are given the freedom of choice. However, they need to work hard so as to accomplish target. This offers the worker individual responsibility and authority to try and do the task. The workers are currently accountable for the task success and failure since it is their key task. It is a very good management tool wherever the worker is concerned within the decision process (Stone, 2002). Performance appraisals are thought-about to be the foremost vital and indispensable tool for performance management because it; Provides helpful info for higher cognitive process in areas of promotion and benefit rating. It also assists in compensation reviews, linking operation and method process that square measure the idea for deciding the effectiveness of personnel sub functions like recruiting, choosing and compensation. Performance appraisal helps the managers pinpoint areas of considerations within the main systems like selling, accounts and production. It also Enhances understanding for coaching and guidance wants. The annual Performance Appraisal is that the rationalization of the continuing method of the Performance Management. It will offer a good and correct basis for wage choices and pay-for-performance programs. It is conjointly the mechanism by that we are able to know whether the employees are achieving objectives or goals of the organisation and whether they are meeting standards or expectations. Effective performance management makes goals and objectives attainable through tight controls and utilisation of workers’ potential by continually appraising their performance. Performance appraisal helps the manager to determine training and development needs of an employee. This prepares the staff for future assignments or responsibilities. Eventually, it provides the driver for setting individual objectives and goals for the approaching appraisal process. The Performance Appraisal method may be a strong tool. It is, however, a refined and sophisticated method and thus managers should be completely trained within the method to reap the rewards. Collaborative worker appraisal systems permit workers and managers perform their duties along set goals, monitor progress toward goals and spot areas of required improvement. In an exceedingly review system that really encourages honesty and growth, workers will speak up concerning areas that require improvement they see in themselves, their department and the entire company. Workers have deeper insights into their personal struggles than their superiors do, workers should be happy to reveal these weaknesses while not damaging their name or trust round the workplace. Workers can also give valuable feedback on their managers, recognizing potential areas of weakness to be self-addressed with advanced, probably one-on-one, coaching sessions (Herwigg, 2003). Absents in an organisation can cause a great damage revenues and performance in that company; therefore its management is very vital. It is necessary to manage short and frequent absences not solely as a result of the costs square measure vital, but also to take care of smart morale amongst the staff that remains at work. Short and frequent absences could also be a signal of an even bigger drawback. Literature reports that sad workers take off times more frequently than satisfied workers. Thus, it is necessary for frequent absences to be reviewed not solely to minimize the frequency of inessential absences, but to assist in determining if the absence is as a result of an even bigger drawback. In conclusion, having a transparent attending policy that is communicated to any or all employees is important; workers ought to perceive what is expected of them and what is thought of to be acceptable. Having absence procedures will make sure that all workers understand the process precisely. There ought to be a high level of consistency within the means that the business deals with unacceptable absences. Conducting return-to-work interviews may be notably useful in ascertaining the explanations behind the absence and assessing whether or not they are real. It is conjointly necessary for the corporate to hunt for ways to keep employees engaged. In overall, if robust procedures are in situ and are adhered to, they will facilitate to reduce absence across the business (Giovanni & Tommasso, 2011). Bibliography Clarence, L., & Thorndike, E. (2012). Scott, Foresman Advanced Dictionary. Addison Wesley. Edward, E., & Alber, S. (2011). Useful research:Advancing theory and practice . Berrett Koehler Publishers. Giovanni, A., & Tommasso, P. (2011). Adopting performance appraisal and reward systems.A qualitative analysis of public sector organizational change. Journal of organizational change management , 24, 90-11. Herwigg, K. (2003). Motivate and Reward:Performance Appraisal and incentive systems for business success. Palgrave Macmillan. Stone, F. (2002). Performance and Reward management. Capstone. Thomas, B. (1994). Innovative Reward Systems for the Changing Workplace (1st ed.). McGraw Hill Companies. Read More