Impact of Rewards on Employee Performance

This assignment examines the influence of rewards on employee motivation and performance. Students are tasked with evaluating different types of rewards, such as monetary and non-monetary incentives, and assessing their impact on work priorities and overall performance. The questionnaire provided aims to gather insights into employee perceptions of the current reward system and its effectiveness in meeting their needs.

Managing performance and
rewards

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task .................................................................................................................................................3
Critical Examine Performance Management Issues And Rationale For A Performance
Management.................................................................................................................................3
Critical Evaluation Of Key Issues In Performance And Reward Management..........................8
Critical Evaluation Of Effectiveness Of Performance And Reward Policies And Practices. . .12
CONCLUSION..............................................................................................................................15
References......................................................................................................................................16
2

INTRODUCTION
Performance management refers as process or strategy of an entity which ensure that
people contribute well in attaining goal of the organization. It is broader and essential function of
human resource management that assist in improving overall performance of the corporation in
order to sustain in the market for longer duration (Kaplan and Atkinson, 2015). It involves
rewards system to motivate employees so that they like the workplace and put their best efforts.
Managing performance with rewards is the proactive system that supports in managing people
well and making them loyal towards the firms. Present report is based on the case study of
national office suppliers. The firm is provider of stationery and office furniture throughout UK.
Cited firm has good experience and its turn over has been increased approx one-third in last three
days. Current assignment will critically examine performance management issues in reference to
National office suppliers (Kaplan and Atkinson, 2015). It will discuss the measuring points of
performance. Study will illustrate new reward strategy and it will define the ways in order to
accomplish business needs and objectives. In addition, report will give appropriate suggestion of
performance measurement and reward system for improving performance of the company.
TASK
Critical Examine Performance Management Issues And Rationale For A Performance
Management
In the globalized era competition is very high and companies are suffering from high
competition. Most of the small firms are not getting chance to enter in the market due to high
completion (Teeratansirikool and et.al, 2013). Apart from this most of the big organizations are
unable to sustain in the market for longer duration. Firms have to make effective strategies so
that they can face this issues and can perform better. Performance management is the way that
can support the entities in facing competition and gaining the competitive advantage. It is to be
said that employees are assest6s of the organization, if workers are satisfied and loyal then
corporations can perform better and can achieve its objective soon (Schaltegger and Burritt,
2014).
National office supplier is the suppliers of stationary and furniture in the UK market.
South West regional office of the company is running well. Regional sales manager of the area
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conducts business operations in informal manner. The person encourages team members to be
more talkative so that coordination among them can be build up (Koike, 2013). Individual does
not have any formal future plans, they just believe that if employees perform well as compare to
previous year then they can do well in near future as well. Regional sales manager concentrates
more on its staff members and always try to make them happy so that they like the workplace
and perform well in the organization.
Southern Regional office of National office supplier is also working well, the sales
manager of region is reserved and fastidious. Individual focuses on improvement and
concentrates more on mistakes so that proper action can be taken by the management for
improving the lacking points (Rabovsky, 2013). That is the only way that can support in
improving performance level of employees. Individual provides cash bonus to all workers but it
pressurizes others those who are not eligible for the rewards and recognition so that poor people
also improve their working efficiency and perform better in the workplace.
Performance management issues faced by National office suppliers
There are many issues which are faced by the cit ed firm at the time of measuring
performance of the employees. Due to this issues company fails to achieve its target within
decided time duration (Wilson and Hollensen, 2013). These are described as below:
Lack of credibility
The effective measuring of performance is highly depends upon trust between employees
and employer. If workers have doubt of the credibility of the supervisors then they may create
the measurement and due to this actual results get hampered. Lack of credibility takes place due
to poor communication, inexperienced management etc. This is the major problems which is
faced by the National office supplier that the time of performance measurement (Aracıoğlu,
Zalluhoğlu and Candemir, 2013). South west regional office of cited firm focuses on building
relationship with the employees thus, it provides them flexible workplace environment and
motivate them that they discuss their issues with each other. On other hand Southern regional
office concentrates more on improvement thus, it always motivates its employees by giving cash
bonuses. But due to lack of trust people do not relies on the management. Thus, it creates issue
of lack of consistency due to this performance can not be measured effectively (Salleh and et.al,
2013).
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Lack of established goal
It is another major issue which is faced by national office suppliers to great extent. It is
found from the case study of South West regional office that manager do not have formal
planning and have no authentic future plans. Thus, due to this they fail to understand on which
criteria they have to measure employees. It is necessary that owner of the company must have
clear goal and objectives so that they can measure the performance accordingly (Wilson and
Hollensen, 2013). In addition to this, it is necessary that managers communicate the goal to
employees effectively so that they can know the future planning and they can support
management in measuring performance/. It will help in improving their level of performance
soon. In the absence of established goal cited firm will not be able to measure employees
performance well.
Lack of clear strategy
It is another issue which is faced by the National office suppliers.
There is no clear strategy that how management will measure performance and on what criteria it
would be measured. Due to this, employees fails to understand standards of work thus they do
not perform well and do not support organization well (Kaplan and Atkinson, 2015).
Lack of consistency
It is another issue of performance management due to this, confusions and resentment
make place among employee. That is why actual results get differed from the real situation.
Consistency supports in measuring the performance and make strategies accordingly (Van de
Walle and Cornelissen, 2016).
Rationale for performance management
Performance management is one of the essential tool that support entity in improving
their business performances to great extent. It is very important for the growth of National office
suppliers. The rationale of performance measurement system are as following:
 Financial reporting
 Demonstrate achievements
 Operational control
 Facilitate continuous improvements
 Communication, motivation, control and improvement
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The rationale of the performance management is goal setting and revising. Every
employees need to work harder but individual wants some benefit from the organization. With
the help of can concentrate on clear goal and can revise its strategies accordingly. It is the great
tool that supports in improving overall performance of the cited firm (Schaltegger and Burritt,
2014). It is the great technique that can help in identifying the gap between required skills and
actual skills. By this management would be able to perform their work better and they would be
able to know training needs of employees. That is the main reason that can assist in improving
overall performance of the organization (Teeratansirikool and et.al, 2013). Rational of
performance management system is that it assist in making development planning so that
workers can get developed and they get promotion opportunities in the National office suppliers.
One of the most important reason of performance management implementation in the workplace
is that with the help of this, companies and improve its bottom line and can reduce their
operational cost. It is the great way that can support in improving productivity and mission
effectiveness (Wilson and Hollensen, 2013).
Balance score card is the great strategy of performance management that supports in
identifying the system and process by this way firms like National office suppliers can
implement effective strategies for the improvement in the current process. It is the great tool that
can support management of cited firm that to identify the strength and weakness of its staff
members and work to improve their lacking points. Apart from this, companies can utilize skills
of the person effectively that would help in enhancing profitability of the organization
significantly (Koike, 2013). It not only helpful for organization but also it is beneficial for
managers and employees as well. By this way people can analyses their potential strength and
they can use it effectively. Managers can reduce conflicts soon that would help in improving
their efficiency level. Employees are assets of the cited firm it is necessary y that they feel
satisfied with the entity. Workers gets career opportunities and job satisfaction. By this way they
will stay in the National office supplier for longer duration. In addition, performance
management is the technique that helps in developing culture of the company and rebuild trust of
workers (Salleh and et.al, 2013). That can motivate them and they will put their best efforts for
the well fare of entity.
Ways to measure performance of employees
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Performance can be defined as level of efficiency of employees against standard. There
are several met hods that can support National office suppliers in order to measure its employees
performance: 360 degree feedback: It is the great way of measuring performance of employees.
Authorities take feedback from employees so that their training needs can be identified
by them (Koike, 2013). By this way their comfort level can be determined that would
help in taking necessary actions such as training etc. for improving performance of the
worker. In this method managers take feedback of co-workers and immediate boss of the
person about their production capability. On the bases of this they evaluate the working
efficiency of the persons. It is the great way through which overall performance of the
staff members can be improved. Apart from this it helps in motivating people and
building relationship with them (Rabovsky, 2013). By this way they will be loyal towards
the brand and will perform better in the workplace. Attitude check: It is another method that can support in measuring the performance of
staff member to the National office supplier. By this way manager can identify their
behavior towards work, time punctuality and seriousness towards the job. It is another
way that can assist in measuring the performance of the employees to great extent
(Wilson and Hollensen, 2013).
 Graphic Rating scale: National office supplier can use this method to measure the
performance of its employees. In this system, authorities rank the workers and give hem
grading. By this way overall employee's performance can be measured by the cited firm
and it will motivate the workers to put the best efforts for making improvement in the
efficiency level (Aracıoğlu, Zalluhoğlu and Candemir, 2013).
 Management by objective: It is the great method that can help National office suppliers in
measuring performance of employees. It can be define by output of workers ad its
contribution in company's goal and objectives. If consumers of the cited firm are
retaining in the organization for longer duration that means employees are performing
well. It is found that cited firm has increased its revenues by one third that shows staff
embers are doing well (Koike, 2013). Overall growth in the profitability and
sustainability of en entity can assist management in measuring the performance of the
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employees. By this way they will be able to make plan for their improvement
(Teeratansirikool and et.al, 2013).
 Measuring sales productivity: Overall sales volume of National office supplier can
support the company in identifying the level of performance of the workers. Management
of cited firm can include number of sales, number of calls made by employees, calls
made to potential new consumers. That is the great way that can help in making strategies
for improving efficiency level of the staff members (alleh and et.al, 2013).
Critical Evaluation Of Key Issues In Performance And Reward Management
As performance and reward management has been in regular practice by the HR
professionals to make things goes right at the workplace, it is important to examine deeply the
issues related with these management system. As National office suppliers are delivering the
businesses across UK stationaries it is quite important for them to take care of the need and
wants of all the businesses they have as their clients. Thus it is important for them to deal with
the issues of performance in the workplace and also reward management should be undertaken in
an effective manner(Zuckerman and Gal-Oz, 2014). As performance management is an
important element in the businesses and this sector helps an organization to effectively make
strategies for the future purpose and make decision which benefits the future. Through
application of performance management National office suppliers will be able to understand each
employees individual capacity to perform and then try and make those employees performance
levels to rise whose performance levels are not up to the mark. Further in managing the
performance levels of the employees there are certain issues that are being faced by
organizations such as national office suppliers and those are:
1. Rapid Pace of businesses to Remain Static: It has been said that employees are the
important elements when it comes to companies and thus there performance is what is
important trait for the businesses in order to development and growth of the people. As
the practice followed by national office suppliers in evaluating the performance of his
employees is based on the goals which are set at the start of the year(DuBrin, 2013). But
this isn't showing the performance of employees as appropriate as it was because what
happens is as the world is changing so does the workings and scenario out there is
changing, due to that the the actual performance level is not measured and thus
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management of national office suppliers should keep in mind the change in the world and
implement appropriate measures which can help them in achieving real time efficiency of
employees.
2. Long time for Performance Feedback: Since this issue has been seen in the recent
times have come up drastically into the lime it. There is been seen that employee
performance has been evaluated by the mangers for a long time and they makes a long
time to deliver the results which ultimately not benefit the businesses. As time is precious
and it doesn't wait for somebody, so it does not wait for them too(DuBrin, 2013). As a
result measuring the performance of employee will not work in this case for national
office suppliers so in order to make right changes thy have to deal with this issue
effectively and immediate feedback to employees should be given on their performance
which will help them in motivation and then uplifting the profitability levels.
3. Traditional Review's: People at the workplace are an important asset and thus
motivating them to deliver there best in the work is important for the firm as whole and
an individuals growth as well but sometimes the use of review and rewards don't treat
people as individuals. If an employee has perform rigorously at the workforce then in
order to keep him/her motivated national office suppliers distributes the rewards for more
effective performance thus making them more efficient and more reluctant is the key in
maintaining the performance levels.
4. Ranking and Rating: Sometimes at the workplace managers adopt techniques of rating
the employees on certain scales and some ranking methods have been adopted to make
sure that who are compatible employees who have delivered their best the workplace. But
what actually this technique does is it makes the employees of lower rank demotivated
and feel low which in turn creates differences among the people and makes them
dissatisfied towards the organizations(Chang and et.al, 2013). Thus this sort of technique
is not so promising for national office suppliers to engage in because national office
suppliers have a high base of clients which in turn to address them they need workforce
and thus they have to implement such strategies which helps them achieve better
emotional and motivational engagement of employee at workplace.
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5. Growth and Development: Application of traditional review's will not help the people
to grow and develop because as world has changed and various new techniques and
innovative practices have arrived and thus managers need to examine new strategies and
form the one's which helps in achieving those objectives which are set in order to make
things smooth and functioning. By following the traditional techniques people will not be
able to find the actual deviations in their performances and thus they will not be
effectively catering to the needs of clients and national office suppliers as well(Hoerzer,
Legenstein and Maass, 2014).
Reward Management on the other hand focuses on the employees who have given their heart and
soul into the work and in return they have been given the rewards in terms of monetary
incentives or non-monetary incentives which has been the key for management to lift the
motivation levels of employees who have delivered and for the one's who have not delivered thus
this makes people more efficient and effective with relation to there work(Eijkenaar and et.al,
2013). Reward management is basically about the design, maintenance, implementation,
communication and evolution of reward processes which helps companies like national office
suppliers to improve the performance levels of the employees and achieve the desired growth
and objectives which firm have strive for.
These policies are adopted by management in making a employee thinks abut earning an
extra income and thus to earn that piece of income the employees deliver there best in the work
assigned to them which eventually benefits the organization as a whole and individual
too(Gunduz and et.al, 2014). But with the positives, negatives have also been there in reward
management and the different types of issues faced by the managers and employee's of the firm
are: Designing Effective Reward systems: As national office suppliers is into the business of
delivering quality services to the people they need to make sound reward systems at their
workplace because their business process is such that they have to make the reward
system for the employees as per considering their business structure and services they
provide also evaluation techniques should also be as per the consideration only(Smith,
Chein and Steinberg, 2013). Designing the reward systems have always been the tough
task as they are the motivational tool which will make out perform the respective
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employees. Thus national office suppliers needs to ensure that they need to make
effective rewards system for the employees. Rewarding Cost savings v/s Revenue Recognition: Many companies have been making
different type of reward systems which caters here needs but the issues established at
some workplaces where the rewards are given to those employees who generate revenues
for the firm but not to them who reduce there cost or saves there cost in operations or
activities performed by them. Thus the issue is faced by national office suppliers also
because in delivery of the stationary transportation cost is incurred and various other cost
is incurred but the employees who keep in mind the cost factor and saves he cost for
national office suppliers is neglected over the one's who produce new clients and
generates revenue for the firms(Smith, Chein and Steinberg, 2013). Thus this makes
biasness at the workplace which demotivates the employees to make such efforts of
saving the cost. Financial Targets v/s Employing People: A main purpose for every business is to employ
the people from different diversity and the reason behind that is to achieve the financial
targets set by the firm and thus in order to make people work towards that goal it is
important for the firm in maintaining the reward system properly and make believe the
employees that they will get an extra income if their work will satisfy the upper
body(Duric, Aßmus and Elgen, 2014). national office suppliers does not have to worry
for this issue because as per the structure of the organization they do not employ such
kind of practices in their systems. Rewarding Internal Compliance over Customer Service: As national office suppliers
business possess of that type of structure in which they are more concerned for customers
point of view but on the other hand they are treating the internal compliance procedures
more over the customers and that issue prevails and reflect in their reward management.
By not focusing on the customers they are more of like on the verge of loosing most of
the customers as per the reports(Volkow and et.al, 2014). Further this has resulted in
making employee not achieve the desired level of performance and the rewards are
revoked in relation to those activities.
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 Focus on compliance, Not on productivity: Also reward systems are affected because
businesses sometimes rely on compliance levels rather on the productivity. In order to
comply with the rules and regulations and making sure that rewards distribution does not
go beyond the line of boundaries set by industry, thus it affects the productivity levels
because sometimes in order to comply employees get distracted and in getting familiar
with the changes he/she loose their effectiveness of the work and thus this makes the
productivity levels to degrade and loose the scenarios(Casey, 2015).
Critical Evaluation Of Effectiveness Of Performance And Reward Policies And Practices
Effectiveness of the reward policies and procedures are important trait and plays an
important part in maintaining the level of compliance of the rules and regulations set by
government authorities and thus this makes a reward system at the organization an effective one.
As it is said that reward and performance are interrelated elements of the organization, thus they
should effective at the workplace and this makes the people at the firm more motivated and
energetic to work an extract hour to earn more(Smith, Chein and Steinberg, 2013). But
maintaining the effectiveness of the reward system at the workplace is important because this
facilitates the output of the work to be near to the desired goals and objectives which eventually
results in making growth of the organization. Further the performance and rewards are
interlinked in such a manner that they are more of like depending on each other, they are
dependent variables on each other. From rewards performance levels can be raised and in return
from performance the rewards can be earned so they are mutually relative elements. If people at
the workplace deliver greater productivity and their performance levels are high then those
employees are likely to get the higher rewards and vice versa if employees know that in the
organization if we work better and efficient and more than it is likely that we will be able to get
the incentives or extra rewards for that(Duric, Aßmus and Elgen, 2014). Thus this makes the
performance levels of people uplift and eventually motivates them to deliver more. There are
different set of techniques which can be adopted in order to effectively deliver the performance
and reward systems at workplace and also can be adopted by national office suppliers. Those
techniques are: Market-Leading Bonus For Market-Leading Performance: At organizations like
national office suppliers it is important for the managers to maintain the effectiveness of
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performance and reward system to continuously motivate the employees and thus they in
order to maintain the effectiveness should follow a different set of bonus providing
systems which can be bonus or rewards based on the performances(Casey, 2015). This
particular set of bonus providing system will help in making less calculations and if any
employees comes into that category then as per the market leads he/she will be provided
with the rewards. Performance-Driven Reward That Is Fair And Equitable: It has been discussed many
times that rewards are to be given on the basis of performance of an individual because it
is the best way to keep your employee stay motivated throughout the work because it
creates a mindset in the mind of employee that about the positiveness of the
employee(Finke and et.al, 2015). Thus it is said that Rewards which are based on the
performance level of employees are the best reward systems. Variable Proportion Of Reward That Increases With Grade: Some organizations have
been focusing on the variable rewards systems in which they follow the tactics of grading
system in which they allot the grades to the employees and based on that they provide
rewards to employees on the end of the quarter. If grade of employees increases during
the course of the period then people are likely to get variable rewards for that particular
period and the grade keep changing as per the performance of employee. Market Competitive Salaries: Also reward system also includes different competitive
salaries for the different set of positions in the organizations. Many organizations follow
these kind of reward system which not only help in lifting of the performance but also it
creates a motivation among the employees when they get equally competent salaries
according their knowledge and degrees(Finke and et.al, 2015). Competitive Benefits: Here in this reward system it actually talks about proportion of
employees making flexible benefits choices, thus the employees are given the choice to
actually choose the kind of benefits they want. how it actually drives is that first the
evaluation of each performance is measured and according to those performances further
action is taken in to account in order to make the choice of employees who all are eligible
then they are given the choice of choosing the rewards which will satisfy them most.
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What this does is that this gives the owner to maintain the reward system effectively at
workplace.
 Management Leaders Empowered To Make & Communicate Reward Decisions: In
order to be effective in reward systems at workplace it is important that the management
should adopt strategic plans which caters the reward system at most, since this will
facilitate the problem not maintaining it properly(Lyons and et.al, 2014). Further
communication of decisions regarding the alteration of the plan and making of the plan
will develop the other traits and make people work extra towards the higher performance
levels which in deed will reflect the growth of the organization.
Further on making the reward system works with the performance levels it is important for
national office suppliers like organizations to follow a perfect set of steps which helps them in
maintaining the both the reward and performance management at the workplace. Thus to apply
these traits it is important for the businesses to follow a general process of improvement and that
is:
1. Set Strategic Reward Goals & Success Criteria: In order to make effective the reward
system and performance level of employee at workplace firms needs to develop the
strategic goals that where they want to reach and make a way to achieve them in order to
make the reward system work as per its standards. Here main emphasis is laid on clarity
and transparency, business linkage and reinforcement, external market focus, fair and
equal rewards, personal choice, flexibility and performance related differentiated
pay(Lyons and et.al, 2014). There is also a framework which makes define the strategic
goals in relation with rewards and they are: rewards should be cost-effective and
affordable, chances in response to changing needs should be done, rewards should be
controlled and efficient to manage and administer, complaint legally, internally equitable,
fair and rewards should be as per the performance contribution pay.
2. A Reward Review: A review of the reward system is important from the point of view
manager as well as employees because managers they have made the system so they will
always have the soft corner for such type of reviews but on the other hand an employee
will be the right person to give the review because they are more concerned about the
14

reward system than any other person will be thus it is important for the firms to take
review of the people and make necessary adjustments in the rewards.
3. Piloting And Implementing The Changes: After taking the review it is important for
management to address those issues and consider possible options which can improve the
delivery of the reward goals further which helps in making performance level attain up to
the levels(Lyons and et.al, 2014). Thus this makes in agreeing the optimum
improvements and planning their implementation. Thus implementation of the change
should be done as per the required standards and makes the better of the trait.
4. Measure, Review And Adapt: After the third process which is the action of change it is
also important for the firm to measure the change how productive and effective it is and
thus it facilitates in making a review of that change that how the reward system has been
performing at the workplace(Finke and et.al, 2015). After this adapting the change is the
last process which needs to be effectively used as per the knowledge possessed.
CONCLUSION
From this report it has been studied that people at the workplace are more concerned with
rewards which flows from individual performances and thus in order to make a good reward
system it should be effective. From rewards performance levels can be raised and in return from
performance the rewards can be earned so they are mutually relative elements. If people at the
workplace deliver greater productivity and their performance levels are high then those
employees are likely to get the higher rewards and vice versa if employees know that in the
organization if we work better and efficient and more than it is likely that we will be able to get
the incentives or extra rewards for that.
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REFERENCES
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APPENDIX
Questionnaire
1. Do rewards Create Motivation to drive people towards performance?
2. Do these set of rewards have a impact on employee Motivation?
3. Improvement witnessed at priorities of work?
4. Which is better in enhancing employee Performance Monetary incentive or a
Non-Monetary incentive?
5. Do you think the reward system adopted by the company is up to the mark and
will full fill the desires?
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