Performance Management

This article discusses the importance of an effective remuneration system in performance management and provides recommendations for implementing a strategic remuneration framework. It highlights the need for equal remuneration based on employee performance and the role of total reward strategy in creating a transparent and effective system. The article also addresses the specific challenges faced by O’Meara Electronics in their remuneration system and suggests steps to improve it.

Running Head: PERFORMANCE MANAGEMENT
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Reward and remunerations are considered to be one of the major steps for an organisation
to boost or motivate the employees in a great degree. Actually, remuneration is a payment that is
resembled with the compensation system to encourage the employees emphatically to render
services more enthusiastically (Wang and Hou 2015). Based on this understanding, it is also
essential for the organisation to set up a system that can equally pay the employees. According to
De Gieter and Hofmans (2015) performance is the key factor for an organisation to decide the
amount of remuneration that an employee should get. As a matter of fact, it will also develop an
equal opportunity for all the employees to prove their ability on the basis of their performances.
However, a pertinent question arises regarding the unit of performances. It creates gap behind the
system and its efficacy. This same problem is found in the remuneration system of O’Meara
Engineering where a number of employees alleged the existing compensation system as partial
and dubious.
Based on this scenario, it is the role of the consultant to prescribe an effective
remuneration system that can facilitate equal remuneration scale based on the performance of the
employees. In this context, the strategic remuneration framework is going to discussed as the
best possible mechanism and blended with the total reward strategy so that the entire system will
be transparent and effective enough to resolve the issue as soon as possible.
O’Meara Electronics is facing a severe problem with its remuneration system that creates
further dissatisfaction among the employees. The remuneration system was installed at the initial
phase of the company and the management did not take any extra initiative to evaluate the
efficacy of the system. As a matter of fact, the performance management system of the
organisation is not transparent enough and different departments face severe problem to meet the

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performance quotient positively. Furthermore, the future development orientation of the
employees was also missing in O’Meara Electronics that demoralised the employees extensively.
The strategic remuneration framework is based on the principle of making a better and
impartial approach for motivating and engaging the employees extensively. However, there are
certain measures that the organisation should take in order to establish a concrete and effective
framework (Perez et al. 2016). Remuneration policy making must be of top priority for the
organisation. For instance, setting the goals and objectives of the organisation and aligned the
employees’ personal interest with the organisational objectives is the most essential part that any
successful organisation should do while setting the remuneration policy. It is the first step
towards establishing strategic remuneration framework. In this step the HR department or the
consultant must take a deep research on the existing remuneration framework and discussed with
the top management about the flaws of the existing system (Paşaoğlu and Tonus 2014).
Moreover, the organisational objectives have also been set in the first step. In the next step the
HRM department will carry out the ability and skill of the employees and plan the objectives
accordingly. However, it is pertinent for the HRM department that the equation between the
organisational objectives, HRM objectives and individual objectives of the employees should be
interlinked (Hary, Rious and Saguan 2016). The purpose of this step is to take a deep down
research on the employee intentions and understand their objectives as a whole. Only the general
interests of the employees related to the organisational objectives will be taken into consideration
(Osibanjo et al. 2014). However, individual interests will also be listened and the HRM team will
evaluate the feasibility to grant those interests. Different department has different role to play.
Therefore, it is also important to set different goals for different teams. In this phase, job analysis

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takes a great role to play in order to understand the operation of that job and based on that the
goals will be set (Appiah and Chizema 2015).
On the basis of the job analysis, the HR department will evaluate the job and try to
establish relativity within jobs. As the purpose of the strategic remuneration framework is to
create a unique but equal remuneration process so that job evaluation is considered to be a
pivotal part in the process (Stachova, Stacho and Bartakova 2015). Moreover, the ability of the
organisation to provide equal remuneration on the basis of job is also under thorough scrutiny.
It can be argued that without analysing the financial background and equity share of the
organisation it will be futile to set equal remuneration slab for the employees. After that,
analysing the value of the job role is also considered to be an important part where the
comparison between internal and external value will be judged on the basis of job evaluation and
the labour market worth (Jenkins and Pérez-Arriaga 2017). It will help the HR to set different
pay levels based on the employee performances. The final step is associated with the
communication and monitoring process of the entire remuneration system. The purpose of this
phase is to evaluate the employee satisfaction and their review regarding the new system. Based
on that analysis the success of the strategy can be understood clearly.
In this regard, the role of the total reward strategy is also relevant to deal with the
remuneration issue in O’Meara Engineering. According to Bussin and Van Rooy (2014) the total
reward strategy is a system that provides monetary benefits and develop rewards to employees
with the specific purpose of achieving business goals. It is associated with the business goals of
the organisation and emphasising on individual interests of the employees in order to set better
reward management system. The communication is resembled with the practice of enrolment
and legal requirements. The primary focus of this part is to deal with the process of making

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better communication so that it will generate more efficacy into the practice of employee
opportunity (Smit, Stanz and Bussin 2015). Motivation and encouragement of the employees is a
major concern for this and also facilitates career growth or opportunity that creates positive
impact on the employees. In this regard, one of the major factor can be identified as the role of
the organisations to foster leadership quality that will be effective for the total reward strategy.
According to Pregnolato, Bussin and Schlechter (2017) it can be stated that the more the
leadership will be flexible and liberal the more it creates better environment for the total reward
strategy. It links the organisational perspective with individual aspirations and set a
benchmarking for the benefit of the organisation (Terera and Ngirande 2014). It further deals
with the practice of design and evaluating the costs of installing the system and gather the
information related to the employee input. As a matter of fact, before putting great deal of
emphasis on the implementation it is also essential for the organisation to gather information
related to the process of establishing effective framework for the organisation (Hodor 2015).
Analysing the data and clearly figure out the strengths and weaknesses in the existing framework
is also an intricate part of the total reward system.
Based on the above steps it is essential for the organisation to figure out possible
recommendations for establishing a better reward management framework with the help of the
total reward strategy. Those recommendations will help the organisational management to set
effective strategy resolving the organisational issue effectively. Moreover, it can be stated that
the recommendation part is highly important for the organisation for understanding the
importance of implementing a new remuneration strategy. In this regard, the process of making
effective framework is depended on the communication between the management and the
employees and the guiding principles (Gulyani and Sharma 2018). The communication will help

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the top management to formulate an effective measure that can help to gather data and
information and creating an urge to set new mechanism. On the other hand, the principles are
also important factors that can deliver better environment for the entire aspect. Based on these
part, the organisation will formulate better reward system that is resembled with the practice of
making effective remuneration process within the organisation.
In this regard, the final part of the total reward strategy is going to deal with the approval
of the prescribed recommendations and formulate a change map that can paves an effective way
connected with the total reward strategy. Therefore are some underlining facts that are highly
associated with this part in terms of the feasibility of the map and its efficacy to bring new
changes into the existing practice of remuneration system (Bonache and Paz-Aparicio 2015). As
a matter of fact, the purpose of the road map is also considered to be a guideline for the
organisation to generate more efficacy into the reward management system.
Both the total reward strategy and the strategic remuneration framework are highly
effective for O’Meara Engineering to set up effective means of reward management system.
However, both the strategies are not adequate enough to deal with the O’Meara Engineering
scenario. Therefore, it is essential to blend both the strategies where each strategy has different
role to play. For an instance, the total reward strategy will be implemented at first to evaluate the
specific importance and need of the system. It will generate and gather information regarding the
employee details and based on this the process will set some recommendations that will help the
organisation to create better remuneration framework. As a matter of act, the total reward
management strategy puts a great deal of emphasis on the career growth opportunities of the
employees so that it can attract the employees and get their support effectively.

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After that, based on the recommendations and road map illustrated in the total reward
strategy, the HR will suggest to implement the strategic remuneration framework. The purpose
of the strategic remuneration framework is to create a set of remuneration levels on the basis of
the employee performances. Moreover, setting the goals of the individual employee with the
organisational objectives is also an important part of the strategic remuneration framework.
Based on the system, the O’Meara Engineering easily formulates a unique and equal
remuneration system. Moreover, the specific job roles of the employees is also considered to be
an important aspect that the organisation is going to focus with the purpose to deliver effective
reward system.
Actions Responsible
persons
Resources Purpose Timeline
Create an
evaluation of the
existing
remuneration
practice
HR and the CEO Executive staff
forum
Direct interaction
with the
employees
To understand the
drawbacks of the
existing system
1 month
Set specific
objectives of the
organisation
HR and the CEO Executive meeting
with different
departmental
heads
To make a step
towards effective
organisational
reward system
1 week
Link the individual
goals with the
company
objectives
HR and the CEO Staff meetings To set up a solid
basis towards
developing
remuneration
2 weeks

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mechanism
Evaluate job roles
of different
departments
HR Job description
report
To set different
objectives and
targets for
different
department
1 month
Evaluate the equity
share
HR and the CFO Direct business
meetings
To understand the
feasibility of the
offering rewards
with the financial
capability of the
organisation
1 week
Monitoring the
efficacy of the new
mechanism
HR Monthly progress
report of the new
remuneration
process
To understand the
efficiency and
capability of the
new system
6 months
In this regard, it can be stated that there are some recommendations that can help the
new remuneration practice effectively. For example,
 It is important for the organisation to put emphasis on both individual interests and
business objective of the company and linked the objectives for a positive impact on the
process.

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 The hybrid system should have a clear career growth opportunity for the employees
because the reward mechanism is associated aims to develop better opportunity for the
future sustainability of the employees.
 Considering the internal and external equity of the organisation is also an important
aspect for the HR because it is not possible for the organisation to curtail down its profit
share for the benefit o the employees. A balance between the profit and reward must be
implemented.
In this context, it can be argued that the above report tries to set up a better remuneration
practice that can deliver effective business approach for the organisation. Employee attrition is
an important aspect for the organisation. Therefore, putting emphasis on individual aspirations is
also within the framework of the new system. Moreover, the new reward system aims to develop
both the employee and the business organisation. The recommendations will help O’Meara
Engineering to make progress in the business orientation and better environment for the
employees to work.

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