Supporting Good Practice in Performance and Reward Management - Essay Example

Topic: Lecturer: Presentation: Purpose of Performance Management Performance management is a systematic process for improving organizational performance by developing performance of individuals and teams (Armstrong 2009 p. 55). Its main purpose is to achieve superior standards of work performance. By clearly stating what the employees are expected to do and providing the necessary support, the employees can direct their behaviour towards achieving the set goals (Jackson et al. 2012). Employees are enabled to identify knowledge and skills required to perform their tasks effectively hence improved performance. Another purpose of performance management is to identify barriers to effective performance and eliminate them through constant monitoring, training and development among other interventions (Armstrong, 2009). This enables employees to improve performance and to feel that they are contributing to the attainment organizational objectives hence high motivation and commitment to the organization. Components of Performance Management Systems There are various components of a performance management system such as performance planning, reviews and feedback, rewards, and improvement plans. Performance planning according to Jackson et al (2012) entails deciding on job expectations and goals. These should be clearly stipulated so that employees are aware of what is expected hence direct their behaviour towards achieving those objectives. The targets should be set in mutual agreement between appraiser and appraisee so as to be acceptable. Another vital component of performance systems is reviews and feedback. A review of activities, tasks, objectives and achievements is carried out guided by reliable facts and figures. Reliability is vital as unreliable reviews may lead to unsuitable action plan (Bacal, 2004). Employees need to know whether their performance is up to the expected standards and to identify areas that need improvement hence adequate feedback both positive and negative should be provided. Feedback is also used to identify training and development needs of employees. Performance rewards are essential if the organization is to have a motivated and committed workforce. These are in form of pay rise, recognition, promotion, and company paid vacations among others. Armstrong (2009) argues that rewards are very sensitive as they have direct influence on performance hence the organization should be cautious in rewarding performance. Some people prefer financial while others prefer non-financial rewards depending on personal and cultural values hence some rewards may be motivating to some but de-motivating to others. Motivation and Performance Management Employees who are highly motivated are known to achieve high performance hence organizations need to ensure employees are motivated at all times. Low motivation on the other hand, argues Dubrin (2011), results in low-quality, high absenteeism and turnover and customer dissatisfaction. However, motivation alone is not enough to achieve desirable results thus employees need to have the ability to do the assigned tasks as well as the right equipment. The aim of performance management is to motivate employees to achieve superior work standards hence the organization should know how to motivate workers. According to the needs theory of motivation by Maslow and Hertzberg, people are motivated by desire to fulfil their needs. The maslows hierarchy of needs has five levels and each level needs to be satisfied before proceeding to the next level and different individuals are at different levels of satisfaction hence are not motivated the same way. This is vital in performance management in determining rewards. For example, those at safety level need security and protection hence job security is a motivator but those at self-esteem level are motivated by recognition. For Hertzberg, there are motivators derived from actual job and hygiene factors which if absent de-motivate workers but are not motivators themselves such as good working conditions. Performance management should thus aim at providing both by ensuring good job content and good working conditions. The expectancy theory by Vroom indicates that motivation is likely only ‘when a relationship exists between performance and outcome and outcome is seen as a means of satisfying needs’ (Armstrong 2009 p. 38). Motivation leading to improved performance thus occurs only if employees expect rewards for their performance. The theory thus supports performance management processes that provide intrinsic motivation such as training to develop their ability to perform and thus get rewards. Factors to Consider when Managing Performance When managing performance, the management should consider the organization culture. The organization should create a performance-oriented culture whereby performance management is a continuous process and employees understand what is expected of them. The employees should be able to understand how their work fits into the organization and be given support to accomplish their goals (Armstrong, 2009). The appraiser should also consider the method of appraisal to use; whether to use management by objectives, critical incidents, 360 degree feedback, or any other method. However, the 36o degree feedback is the most preferred as it incorporates views from all stakeholders (Dubrin, 2011). The employee should be allowed to carry out self-assessment and to defend his/her performance before any action can be taken and should also be involved in the process for it to be acceptable. When managing poor performance, the appraiser should consider whether the employee has been given the necessary support and ample time to improve. Dubrin (2011) argues that one cannot expect other results without change hence the need to consider the reason for poor performance so as to effect changes that can lead to improved performance. If it is due to lack of knowledge and skills, training and development can be affected to improve the employee’s capability. Another important consideration is how to reward good performance. Different employees view rewards differently hence the appraiser should know the preferences of employees. A proper reward system should be in place for proper performance management. Purposes of Reward A reward serves various purposes in within a performance management system. First, it serves as a motivator for improved performance and productivity (Dubrin, 2011).If employees know that their efforts will be rewarded; they will have high morale and be committed to the achievement of organizational objectives. Rewards are also used as a means to determine the remuneration of employees. Many organizations link pay to performance thus high performance can be rewarded through a pay raise or a bonus thus enabling the organization to retain talented employees. However, for it to be effective, the reward system should be non- discriminatory. Components of Total Reward System Armstrong (2009) defines a total reward system as a combination of both financial and non-financial rewards available to employees. The system is comprised of components such as a good working environment, growth and development, and total pay. Employees like working in a good environment where they feel safe and secure, where efforts are encouraged and rewarded, their views are appreciated. Growth and development is an important component. Employees are enabled to develop their abilities through training and development hence career and personal development resulting in high morale and commitment. Total pay involves base and variable pay, benefits, and allowances. These are financial incentives aimed at boosting morale and improving performance. Sources of Data Individuals involved in performance and reward management processes need reliable data in order to appraise staff. They may get data from all company stakeholders such as customers, suppliers, peers, workmates, team members and supervisors (Armstrong, 2009).All these people are in contact with the employee being appraised hence are best suited to give information regarding the employee. They are issued with questionnaires to fill regarding employee performance but their identity is kept anonymous. The individual can also obtain data from confidential reports compiled by supervisors and are evaluated annually. However, the employee is not given feedback thus making it hard for him/her to assess performance and know areas that need improvement. References Armstrong, M. 2009. Armstrong’s Handbook of Performance Management: An Evidence-Based Guide to Delivering High Performance. 4edn. UK: Kogan Page. Bacal, R. 2004. Manager’s Guide to Performance Reviews. USA: McGraw-Hill. Dubrin, A. 2011. Essentials of Management. 9 edn. Mason, OH: Cengage. Jackson, S., Schuler, R., Werner, S. 2012. Managing Human Resources. 11edn. Mason, OH: Cengage. Read More