Performance Management and Rewards

Running head: PERFORMANCE MANAGEMENT AND REWARDS
PERFORMANCE MANAGEMENT AND REWARDS
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PERFORMANCE MANAGEMENT AND REWARDS1
Introduction
As opined by Greene (2018), the modern business firms are extensively focusing on
the attribute of employee performance so as to gain a higher profitability as well as the
desired level of growth. Marshall et al. (2019) have stated that the importance of employee
performance becomes apparent from the fact that the different business firms are using
diverse kinds of performance management processes for the effective management of the
performance or production of the employees. The resultant of effect of this is that the
business firms not only undertake regular or periodical assessment of the performance of
their employees but at the same time provide them with different feedbacks as well for the
improvement of their performance (Baird, Su and Munir 2018). In this regard, it needs to be
said that the construct of reward and recognition that the different business firms take the
help of for the purpose of motivating the employees but also for the purpose of enhancing the
performance of the employees. However, at the same time it is seen that there are various
kinds of issues or challenges that the firms face for the effective usage of the processes of
performance management and rewards. Some of the essential ones in this regard are
ineffective strategic focus, leadership support, ineffective feedback, stakeholder review,
excessive focus on quantitative data rather than taking into account the contribution made by
the employees towards the growth of the firms and others (Foss et al. 2015). The purpose of
this paper is to analyse the issues or the challenges that the business firms face related to the
usage of an effective performance management and reward system while suggesting the
manner in which they can overcome the same.
Clothing industry of Australia
The clothing industry over the years had become an important industry of the nation
of Australia not only because of the economic contribution that it makes towards the national

PERFORMANCE MANAGEMENT AND REWARDS2
economy of Australia but also on the score of the large variety of products that it offers to the
customers (Ibisworld.com.au 2019). For example, the clothing industry not only offers
different kinds of apparels, garments and others kinds of cloths to the Australians but at the
same time in the recent times the effective collaboration between the fashion industry and the
clothing industry had positively affected the business or the financial prospects of the
concerned industry (Ibisworld.com.au 2019). In this regard, it needs to be mentioned that the
annual revenue generated by the clothing industry of Australia for the year 2018 was $16.8
billion while it offered employment services to more than 110,000 people (Ibisworld.com.au
2019). More importantly, an important trend which is being seen within the framework of the
clothing industry of Australia is the fact that the e-commerce model of business is gaining
more popularity than the brick and mortar system of business. In this context, it needs to be
said that whereas the brick and mortar system of business registered a growth rate of 2.1% for
the year 2018, the same registered by the e-commerce model of business was more than
16.4% (Ibisworld.com.au 2019). However, at the same time it is seen that despite the
impressive growth rate of the concerned industry one of the major issues that the industry is
facing presently can be related to the ineffective performance of the employees. One of the
most important reasons for the same is the inadequate performance management system or
the reward system used by the firms which in turn had significantly contributed towards the
below-par performance of the employees.
Performance management and rewards
Henttonen, Kianto and Ritala (2016) have articulated the viewpoint that performance
management is the process through which the business firms try to create the kind of work
environment or work culture wherein the employees or the workers would be able to perform
as per their maximum potential and thereby realise the goals or the objectives of the
concerned firm. As opined by Kontoghiorghes (2016), the construct of performance

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management refers to the entire work system wherein an employee is hired and his or her job
roles are being defined till the time of their leaving the firm. More importantly, it had been
seen that the different business firms through the effective usage of the process of
performance management not only try to enhance the performance of the individual
employees of the firm or its different departments but at the same time the entire firm itself
while trying to ensure that the firm as well as its employees are being able to achieve the
strategic goals or objectives formulated by the concerned firm (Manroop 2015). In this
context, special mention needs to be made of the process of performance appraisals that the
different business firms are taking the help of not only for the purpose of analysis of the
performance of the employees but at the same time for the improvement of the same by way
of offering feedbacks (Greene 2018). As a matter of fact, it is seen that the employees are
given appraisals or salary hikes on the basis of the results of the performance appraisal
(Cadez, Dimovski and Zaman Groff 2017). This is important from the perspective of the
clothing industry of Australia wherein it is seen that the employees are unable to perform as
per the expectations of the firms. Thus, it is likely that if the firms take the help of the process
of performance management then they would be able to create the kind of workplace
environment or culture wherein the employees would be able to maximise their performance.
Furthermore, they can also take the help of the construct of performance appraisals for
regularly monitoring the performance of their staff and also for the purpose of offering them
feedback on the basis of their performance which will in turn enable them to improve their
performance in an effective manner.
Bhuvanaiah and Raya (2015) have noted that the entity of reward and recognition is
an integral part of the process of performance management used by the business firms and is
generally being used to improve the performance of the employees. The construct of reward
and recognition enables the business firms to appreciate the hard work put in by the different