Supporting Good Practice in Performance and Reward Management

This report discusses the purpose and components of performance management, its relation with staff motivation, the purpose and components of reward system, factors to consider while managing performance, and data required for performance and reward management processes.

SUPPORTING GOOD
PRACTICE IN
PERFORMANCE AND
REWARD
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Purpose of performance management..........................................................................................3
Components of performance management system......................................................................3
Relation of performance management processes with staff motivation......................................4
Purpose of reward........................................................................................................................5
Components of effective reward system......................................................................................5
Factors considered while managing performance........................................................................6
Data required by individuals that are involved within a performance and reward management
process..........................................................................................................................................7
Frequency, purpose and process of performance reviews...........................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Organizational performance refers to how the organization as a whole is performing in
relation to productivity, employee management, revenue generation, etc. This report gives a brief
discussion about the meaning and purpose of performance management and the relation it has
with the objectives of the organization and its success as well. The key components and relation
of performance management with staff motivation is also discussed below. Purposes and
components of reward system are also discussed below. Also, the factors that need to be
considered while performance management are also discussed below. And lastly, data required
by the individuals regarding the above mentioned and evaluation of that data in particular is
stated below.
MAIN BODY
Purpose of performance management
Performance management refers to the consistent and continuous procedure or process
conducted between the supervisor or the manager and the employee of communication all around
the year, to achieve the common organizational objective or goal of the company (Cappelli. and
Tavis., 2016). The major purposes of performance management are as follows;
Employment decisions
Through appraisals the formal and legal justification to promote the outstanding
performers within the organization is provided. And the low performing staff can be weeded out.
Through this the employees that are valuable for the organization can stay and also the
organization has to pay to only the employees that are efficient and bring value in the
organization.
Solving organizational issues
Through the process of performance management due to consistency in the
communication and interaction between the employees and the supervisors and the
communication being clear and precise as required by either parties, the number of conflicts
within the organization reduce. Due to which it becomes easier to work in a friendly work
environment and this increases the productivity of the employees and provides competitive
advantage to the company (Buick., 2021).
Components of performance management system
360 performance reviews

This is the most necessary and valuable features of the performance management. In this
method the employees of the organization are provided an opportunity to give and to receive
constructive feedback regarding the performance from the manager, direct reports and peers.
This supports the employees to understand their major strengths and the areas in which
opportunities are present for development (Kanaslan. and Iyem., 2016).
Manager reviews
In this process the employees within the organization are asked to review the
performance of the managers they are working under and identify the coaching opportunities
required. This also provides an opportunity to the managers to receive a constructive feedback
from their employees. Through this managers will improve their performance and manage team
more efficiently and effectively (Schemmel., 2021).
Social recognition
This is basically a tool that allows the employees within the organization to create and
maintain meaningful and strong relations with each other. One of the best example of such a tool
is feedback apps.
Engagement surveys
This is the way through which a company is able to assess what actually matters to its
employees. This survey is precisely done for the reason to know which employees are engaged
within the company and which of them are not (Lager. and Milojkovic., 2018).
Relation of performance management processes with staff motivation
Motivation is a very essential part or aspect of any business, mainly in relation to the
employees working within it. An employee who is motivated will have a higher or greater level
of job satisfaction, willingness to be successful and enhanced levels of performance. Whereas,
performance management affects the performance of the team by supporting the leaders by
building positive, impactful and meaningful relationships with their team members and also
among the team members for the purpose of creation of a culture of feedback which will
motivate the employees to work together in a better and more effective manner (Çetin. and
Aşkun., 2018).
Through improved communication and interaction between the employees and between
the management and the employees, the employees will be clear regarding all the decisions and
also aware about new decisions and inputs within the company, this will make the employees

feel included within the company and more interested towards the company as they will be
motivated. Similarly, the management of the company will also be informed regarding any issues
faced by the employees, which will also make the employees feel important and heard, due to
which they will enhance their quality of performance, which will help them as well as support in
achievement of the organizational goals too.
Purpose of reward
Rewards are a major part of the performance management system. These are basically
referred to the non monetary or the monetary compensations provided to the employees of the
company apart from the regular salary they receive to appreciate their performance and to
enhance their motivation levels. Rewards are provided to the employees for many purposes, such
as, the main purpose of the reward system is to enhance the motivation of the employees to work
much harder and align the goals of the employees to the goals or objectives of the organization
or the company the employees particularly work for (Anku. Amewugah. and Glover., 2018).
Reward system is generally maintained by the human resource department of the
company. Through this the employees that have worked efficiently in the company get
recognition and their willingness to work better than before continuously keeps on increasing.
This is because they want to maintain the position they have earned and this in turn increases the
productivity levels of the employees (Siwale. and et.al., 2020).
Also, one of the major purpose is to attract all the other employees, whose work is not yet
appreciative to work better, so that they are also eligible to get recognition and respect within the
company and also might get other incentives too.
Components of effective reward system
Performance and recognition
Mostly the employees of the organization require not only salary but recognition in front
of the whole organization in the form of appreciation. Once the employee has done an
appreciative work the employee should be praised in from of the team for the work he or she did.
Through this employee is motivated (Taba., 2018).
Organizational culture
The organizational culture of any company is very necessary for the employees working
within it. If the culture is positive and understandable the employees will feel comfortable,

relatable and included in the organization. This will keep them motivated and they will enjoy
working.
Development of employees and career opportunities
Employees will only work for the organization and will be interested if they get the same
for themselves. Through providing better career opportunities by providing training to the
employees, they will learn new things and apply it within the organization (Akhter. and et.al.,
2016).
Business strategy
The business strategy followed by the organization should not only be in accordance to
the achievement of the organizational goals but also the individual goals of the employees. Both
of these need to be related to each other so it is clear that everyone is benefited by the strategies
implemented.
Factors considered while managing performance
Clarity in the vision and the goals
The vision and the goals or objectives of the team need to be specific and precise. Due to
this the team will be able to work in the same direction and be aware about what needs to
achieved and the ways to do so.
Selection of the team members
The selection of the team should be based on the traits like people who can work
together, communicate well, respect each other, are able to resolve conflicts, have a sense of
responsibility and are accountable to one another.
Size of the team
The size of the team that manages the performance management systems should not be
too big or too small. This is because in a smaller team the decision-making will be faster but the
options to consider will be less and vice versa in the case of big team.
Communication
There need to be effective and clear communication within the team or else the success of
the team can be unattainable. The communication should be two-sided and be specific and clear.
So that there are no errors and chances of conflicts and misinterpretations.
Conflict resolution

It is common to face issues and conflicts in a group of individuals that are high driven.
These conflicts can be huge at times, hence the team should be capable of resolving the conflicts
they are facing.
Data required by individuals that are involved within a performance and reward management
process
Turnover tracking by the level of performance
Knowledge regarding the facts like the number of employees that have a high
performance leaving the organization in comparison to the employees that are low performing or
average provides an insight regarding the workforce health of the company.
Measurement of effectiveness of management
This data in particular can be used for the examination of the levels of the effectiveness
of the managers regarding the engagement levels of the employees to clarify the roles, set
expectations, address concerns that are performance related and plan development.
Identification of potential talent
Data that provides diverse information regarding the skills and capabilities of the
employees is used in the process of identification of the employees that can be promoted to
potentially better job roles and given more responsibilities.
Frequency, purpose and process of performance reviews
Frequency refers to a particular duration of time in which performance evaluation and
appraisals require to be conducted. These should be conducted in every 6 months in this
company in particular, so that employees and the management get an insight of the working and
the human resource of the company.
Performance reviews are done to provide meaningful feedback regarding the performance
and also promote and improve communication, this helps in development and maintenance of
healthy relationships within the company and also provides professional development.
The process of reviewing of performance includes development of the evaluation form,
identification of the performance measures, setting of the guidelines, giving feedback and
outlining the expectations regarding improvement.

CONCLUSION
This report provides a description of the purpose and components of performance
management. How performance management is related to staff motivation is also mentioned
above. Also, the purpose and components of reward system is given above. The factors that need
to be considered while performance management are also provided in the discussion above. And
lastly, the data that is required by the individuals within the processes of reward and performance
management and a brief evaluation of that data is presented above.

REFERENCES
Books and Journals
Akhter, N. and et.al., 2016. Impact of training and development, performance appraisal and
reward system on job satisfaction. International Review of Management and Business
Research. 5(2). p.561.
Anku, J.S., Amewugah, B.K. and Glover, M.K., 2018. Concept of reward management, reward
system and corporate efficiency. International Journal of Economics, Commerce and
Management. 6(2). pp.621-637.
Buick, F., 2021. Performance management and common purpose: rethinking solutions to inter-
organizational working. In Handbook on Performance Management in the Public Sector
(pp. 229-248). Edward Elgar Publishing.
Cappelli, P. and Tavis, A., 2016. The performance management revolution. Harvard Business
Review. 94(10). pp.58-67.
Çetin, F. and Aşkun, D., 2018. The effect of occupational self-efficacy on work performance
through intrinsic work motivation. Management Research Review.
Kanaslan, E.K. and Iyem, C., 2016. Is 360-degree feedback appraisal an effective way of
performance evaluation. International Journal of Academic Research in Business and
Social Sciences. 6(5). pp.172-182.
Lager, D. and Milojkovic, E., 2018. Digitalization and the renewal of employee engagement
surveys.
Schemmel, B.W., 2021. Emergency Manager Future Planning: Implementing Lessons Learned
from After-Action Reviews(Doctoral dissertation, Capella University).
Siwale, J. and et.al., 2020. Impact of Reward System on Organisational Performance.
Taba, M.I., 2018. Mediating effect of work performance and organizational commitment in the
relationship between reward system and employees’ work satisfaction. Journal of
Management Development.