Reward Systems and Performance Management - Term Paper Example

Performance Management and Reward System Introduction The term reward system is now taking roots in many organizations throughout the world to increase its performance and efficiency and to gain a competitive advantage against its peers. The basic concept behind it is to increase the productivity of employees by giving them incentives based on their performance. This is also referred as performance management, as the outcome is effectively increased by regulating the performance of the workers (Armstrong, 2002). The basic aim of reward system and performance management is to increase the overall productivity and efficiency of the organization. And to do so the organization should be ready to value its workers. In this paper all those methods will be focused which can be used to reward the employees to make them feel valuable so that they work for the organization with all their dedication and devotion (Grote, 1996). Performance Management & Reward System An effective reward system can be made by using a very simple method based on the following five steps, namely: (1) Specific, (2) Meaningful, (3) Achievable, (4) Reliable and (5) Timely. To be “specific” means that action and the rewards should be maintained perfectly in accordance with each other. The reward should be meaningful and should be beneficial for both, the employ and the organization. The targets given to the employees should be achievable and practical. The entire program should be reliable and should be operated in accordance with the rules and regulations. Last but not the least, the entire program should be managed properly and timely (Lebas, 1995). There are several methods to reward the employees based on their performances. Some of them I have discussed in this paper. Employee Empowerment The empowerment of people refers to giving authority to the employees in particular. There are two major points to be understood. First is you should know that how you could utilize your work force to get the maximum possible financial results. And the second is that you should know and search for different techniques to raise productivity, lower the costs and maximize the revenues (Dransfield, 2000). Productivity refers to the outcome and efficiency of a firm. It is actually the outcome of your work. Empowerment has a vital role to play in things related to productivity. The productivity that is being induced and provoked by stress can be regarded as a path to burning out. The development of a work environment that is positive and friendly can surely help in decreasing and diffusing the stress that increases due to the demands and pressure of raising the performance. It is a universal truth that not all people are similar. They have their own diversity. Hence it is also true that their all have different working styles. It is therefore necessary that the needs and requirements of an employee should be understood, like what motivates them, so that they could give their best performance. Flexibility in working hours, a walk after lunch, may be little refreshment or sport can help employees get rid of the drowsiness and increase the metabolic rates. It is necessary to understand that employees are not school going children (Dransfield, 2000). Give Respect to the Employees It is noted that if an environment is such that it gives respect and enough space to its employees for working according to their own working styles, then the employees can easily give their best to the company. The support from the management is a must. If the sales team is given enough resources to raise the sales, then it is obvious that by the end of year your sales would have increased. Access to resources like, market data, conduction of workshops and seminars, etc all help in raising the performance graphs of your employees (Armstrong, 2002). People from every level in an organization should have good communication among them. It is no doubt true that if a person enjoys what he do then they surely give their best which ultimately helps the organization. If you give a little more value to your employee, then in return they will value the firm they are working for. If the senior management expects more from their employees, then they should value the work input given by them. It is noted that if people are given different goals and are valued with their inputs and suggestions on them, then they are a lot more enthusiastic about achieving them (Lawler, 2003). Discuss, Manage and Control the Output The development of the correct strategy is as important as having a good dedicated team. It is very important that the employees work together as a team so that they could achieve all their goals and get the best possible outcome of their hard work. The environment of the organization plays an important part in achieving the targeted goals. It comprises of some external and some internal elements. The atmosphere of the organization must be scrutinized time by time so as to ensure that the workers are not under any sort of stress or pressure and are playing their part to achieve success. The scrutiny of the atmosphere of the organization helps the managers to evade internal and external threats and mark the upcoming opportunities. The scrutiny of the internal atmosphere of the organization is the initial step that has to be taken in order to scan the overall environment. This includes the relationship of employees with each other, the communication and interface of the workers with the management, the interface of the management with the shareholders and all the other stakeholders, etc. Discussions, meetings, surveys, etc can be used as tools for scrutinizing the office environment. This helps in pointing out the weaknesses and strengths of any company (Lebas, 1995). The culture and trends of a company is closely associated with the working climate of that place. It means that the climate of a firm represents the morale and enthusiasm of the workers. The behavior of the employees corresponds to the negative or positive environment of the company, which is indicated by the relationship of the workers in their day to day dealings and interactions (Dresner, 2007). Capability of a firm shows that how dedicatedly the workers are working and contributing to achieve the targets of the company. I believe that efficiency of the company can be made better if the working environment is free of any politics and the workers have a good healthy and friendly relationship with each other as well as with the senior management. This will enable them to work more effectively and productively as they would feel more appreciated and loved within the organization. Conclusion In my opinion employees working in any organization must have the authority to perform their daily tasks within the area of their responsibilities and may have the freedom to make their own decisions which can work for the betterment of any organization, in other words employees should be given due authorization and empowerment. This will help them to take their own decisions and be able to manage work more effectively (Dresner, 2007). Only then they will be able to give their best. I believe that the performance of the employees is directly proportional to its performance. And optimum performance can only be achieved if the employees are rewarded with respect to their performance and are given some space to work as per their nature. They should not be forced or pushed to achieve targets, because if that happens then they will never be able to give their best (Grote, 1996). Work Cited Dransfield, Robert. “Human resource management.” 2000 Dresner, Howard. “The performance management revolution: business results through insight and action.” 2007 Armstrong, Michael. “Employee reward.” 2002 Grote, Richard C. “The complete guide to performance appraisal.” 1996 Lebas, Michel. J. “Performance Measurement and Performance Management.” International Journal of Production Economics. Volume 41. Issue 1-3. October 1995. February 26 2012. Lawler III, Edward E. “Reward Practices and Performance Management System Effectiveness.” CEO Publication. July 2003. February 26 2012. Read More