Performance Management and Reward System Analysis for ZARA (HRP55D)

This report provides a comprehensive analysis of performance management and reward systems within the context of a business case study. It begins by outlining the purpose of performance management and its relationship to business objectives, highlighting its strategic importance in enhancing employee performance and achieving organizational goals. The report then delves into the components of effective performance management systems, emphasizing the significance of motivation, goal setting, work reviews, and monitoring. Two key motivational theories, Theory X and Theory Y, and the two-factor theory are explored, demonstrating how they can be applied to motivate employees. The role of rewards, both financial and non-financial, in performance management systems is discussed, with examples of each. The report assesses options for reviewing both good and poor staff performance and outlines the tools and information necessary for an effective performance and reward management process, including performance appraisals. Finally, the report examines the process and frequency of performance reviews and concludes with reflections on the learning gained from the module and the assignment preparation.

HRP55D 3PRMB
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Contents
1. Outline the purpose of performance management and its relationship to business objectives. ........3
2. Highlight the components of performance management systems......................................................3
3. Outline 2 motivational theories and explain how they can be used in performance management
systems. ..................................................................................................................................................4
4. Explain the purpose of reward within a performance management system.......................................5
5. Outline the pros and cons of using financial and non-financial rewards, providing 3 examples for
each. .......................................................................................................................................................6
6. Outline and assess the options available to the organisation seeking to review good and poor staff
performance. ..........................................................................................................................................7
7. Outline the tools and information necessary to carrying out an effective performance and reward
management process. .............................................................................................................................7
8. Explain the process and frequency of performance reviews and why they are important. ...............8
9. What you learnt during the module; and what you learnt in preparing the assignment.....................9
REFERENCES..............................................................................................................................................10
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1. Outline the purpose of performance management and its relationship to business objectives.
A human resource practice is considered as activities which are adopted by Human
resource department for conducting management as well as development of personnel at the
workplace. This will include training and motivation programs through which employees
enhance their skill and abilities for delivering system properly. Performance management is
considered as integrated and strategic approach which is adopted by a company management in
order to deliver sustained success by enhancing employee’s performance. This is generally done
by improving capabilities of employees as well as team at the workplace. In respect of ZARA by
adopting performance management they able to conduct their work effectively as well as it will
also help them in attaining desire target successfully. There are several purpose of performance
management experienced by ZARA while conduct operation, some are:-
 The strategic purpose of performance management is conduct day to day activities in the
effective manner so that employees feel motivated and conduct work properly for the
attainment of desire objective (Andersen and Nielsen, 2020).
 It is also purpose of performance management that through it respective company will
enhance employees skilled, abilities and knowledge which leads to accomplishment of
work properly for the attainment of desire goal.
2. Highlight the components of performance management systems.
There are numbers of components related to performance management system which
help company in attaining their predetermined goal and objective (Elkomy and Cookson, 2020).
From which some main are mentioned in respect of ZARA, company which is a retail store
introduced by Amancio Ortega and Rosalia Mera in year 1975. Respective company is nested its
business at worldwide level:-
 Motivation – In order to implement performance management system at the respective
company workplace, it is essential to motivate employees. Motivation is considered as
main aspect of this because through motivation staff able to conduct their work properly
which help in attaining desire goal.
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 Set clear goal – in respect of this performance management system respective company
must develop proper goal accordingly which employees will conduct their work. In
respect of this management must develop proper goal and then aware every member in
respect of that so that they conduct work accordingly.
 Work review – It is second main performance management component according to
which employer need to provide proper feedback, review and suggestion to staffs so that
they enhance their performance effectively.
 Monitor – For Zara management it is essential to monitor their employees performance as
through that they able to develop accordingly as well as it also help in determining error
or issues at the initial stage.
These are the components of performance management which are adopted by ZARA in order
to conduct their work properly and effectively.
3. Outline 2 motivational theories and explain how they can be used in performance management
systems.
The performance management company HR department needs to motivate employees
and for that they may use different motivational theories and other practices. This is so because it
enhances employee’s performance and leads to attainment of goal. There are numbers of
motivational theories which help a company in achieving its aim and objective which they are
wishing. From which main two motivation theories are mentioned below which can be adopted
by ZARA for motivating as well as encouraging employees:-
Theory X and Theory Y
This theory is developed by Douglas McGregor and according to him in an organization
there two behaviour employees, one who like to do work whereas another need to push so that
they accomplish work. Due to which it is essential for management to consider both types of
employees while developing decision related to motivation and encouragement (Frederiksen,
Kahn and Lange, 2020). The first type is Theory X according to this behavior employee they
didn’t like to work, avoid responsibilities, seek security, avoid change, required guidance, and
need to motivate always and so on. In respect of these behavior employees management of
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ZARA need to develop strategies like motivate with financial benefit, rewards, provide proper
guidance and many others aspects. On the other hand Theory Y behavior employees are self
motivated, like to do work, always seek responsibilities, good decision maker and so on. In order
to motivate this behavior employee’s respective company not need to do so many practices like
they appraise, give new project, responsibilities etc.
Two factor motivation
According to this theory management of ZARA needs to consider main two factors of
motivation i.e. hygiene factor and motivation factor. In respect of motivation factor they need to
consider several aspects i.e. achievement, recognition, responsibilities, growth, advancement and
so on for motivating employees (Hartinah and et. al., 2020). Another factor is hygiene factor
according to which they need to consider factor like company policies, supervision, relationship
at workplace, salary, security and so on which is considered by employees for retain at
workplace. So by conducting this theory respective company able to motivate their staff properly
which lead to accomplishment of work effectively as well as successfully.
These are main two motivational theories which can be adopted by HR department of
ZARA in order to enhance their employee’s performance by motivating as well as encouraging
them to conduct work effectively. Through this respective company able to attain their aspiration
target as well as objective successfully.
4. Explain the purpose of reward within a performance management system.
Performance management system is considered as approach that is mainly adopted to
measure the performance of staff at workplace so that accordingly improvement plan can be
developed. It is also considered as procedure which can be used by employer in order to align its
goal, mission, aim and objective according to the available resources. The main purpose of
reward in the performance management system is that when a person or employees get reward
for their performance they feel motivated as well as other also get motivated. This will encourage
them to do work similarly so that they also get a reward which automatically leads to enhance in
the performance of employees through which company can attain their desire goal as well as
objectives successfully (Mouritzen and Opstrup, 2020). Moreover reward also motivate and
encourage staff to do their best as it will lead to growth for the employees as well as company
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successfully. In addition to this, when respective company management adopts performance
management practices them able to develop strategies according which leads to enhancement in
their performance and minimize errors. In respect of this company to conduct analysis of their
employees performance as according to that appraisal decision will be developed.
5. Outline the pros and cons of using financial and non-financial rewards, providing 3 examples
for each.
In order to apprise employees ZARA may adopt different methods of rewards because
that help in motivating, which can be in the form of finance or non finance. The difference
between financial and non financial are mentioned below:-
Financial reward Non financial reward
Pros  If ZARA will adopt financial
reward ideas they able to hit
the target as they it will help
in focusing on the target
properly (Mousa and Othman,
2020). According to which
employees will work.
 Financial Reward will also
help respective company in
attaining the given value or
target. It is so because it is
human nature that they get
more encouraged when they
get fund related to that.
 It will help respective
company in recognizing staffs
priorities as well as lifestyle
which leads enhancement in
the performance of employees
successfully.
 Non financial reward may
also encourage attachment to
the business which leads to
achieving pre determined goal
and objective successfully and
effectively.
Corns  The financial reward given by
respective company can be
small at specific situation or
target which may not motivate
that much employees.
 Monetary value attracts all
people so when some
employees not get the
financial reward they feel
demotivated which may affect
their performance.
 It is seems that non financial
rewards are taken for granted
at the workplace as well as
some it may not work for
motivating employees for the
better performance or
attainment of target (Musso
and Weare, 2020).
 It is also considered that some
time non financial rewards or
non monetary rewards not
work properly as well as it is
considered as inappropriate.
Examples There are several examples of
financial reward which ZARA may
adopt such as Bonuses, Merit pay and
There are also numbers of options of
non financial rewards such as
membership to club, family outing or
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profit sharing. dinner organized by company and
appraisal certificates.
6. Outline and assess the options available to the organisation seeking to review good and poor
staff performance.
It is essential for every organization human resource department of conduct practices in
order to review the performance of employees in effective manner because according to the gap
management may develop strategies for the improvement (Sakhdari and et. al., 2020). In context
of ZARA, it is also essential for them to adopt different methods and technology for conducting
evaluation of their employee’s good or bad performance. From which some of the main methods
are mentioned below:-
 Set performance standard – According to this methods respective company must set
proper standard for each and every employee in order to know who are working
according to the standard and who are not. Through this they can take action for the
correction accordingly.
 Provide feedback – In respect of this management of ZARA need to evaluate
performance of employees not their personality because it help in taking proper decision.
Through the evaluation management must provide feedback to staff so that they can
conduct practices for enhancing those skills properly.
These are the main methods which ZARA management may adopt in order to outline as well
as asses the available options to the firm so that they can attain objective by conducting proper
review of good and poor staff performance.
7. Outline the tools and information necessary to carrying out an effective performance and
reward management process.
A company management it is necessary to adopt proper human resource practices so that
they can manage their business operations and functions in effective ways. In this performance
management of a company is interrelated to its aim and objective because HR department
conduct work accordingly for the attainment of desire goal. In addition to this, for performance
management a company needs to adopt different methods like reward and appraisal which can be
in finance or non finance term. There are several tools and information which are essential to
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considered in order carrying out a proper performance and reward management procedure. From
which main strategies are mentioned below in respect of ZARA through which they can carry
out proper performance and reward management activities:-
 Performance appraisal – According to this management of respective company will
conduct performance appraisal of their staff in respect of their performance at the
workplace during a specific project (Singh and et. al., 2020). In this if the performance is
good then management will do appraisal for that whereas if the performance of a person
is not appropriate then they will provided training and development.
 360 degree feedback – In respect of this tool management will conduct evaluation of
performance from each and every staff of the firm so that their will 360 degree analysis
will do for developing strategies related to reward process. In this process each and every
person or members of a company will involve in the evaluation process.
 Performance record – It is one of the essential record or information which is required by
ZARA while carrying out the effective performance as well as reward management
procedure at their workplace for attaining goal. In order to conduct this management of
respective company needs to develop as well as maintain record properly of the
performance of employees.
 Conduct test – This method is generally used to analyze the poor performance of the
staffs. In this employees who perform poor experience test through which management
able to know their week portion. According to that management able to develop
strategies, training and development programs effectively.
8. Explain the process and frequency of performance reviews and why they are important.
Process of performance review
According to process of performance review ZARA first need to establish standard, them
they need to communicate standard to all staff so that they get prepared after that measurement
of performance will conducted (Soltani and Wilkinson, 2020). Then at nest stage evaluation will
conduct according to standard and then feedback will provide so that employees will understand
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their weakness and strengths. It will also help them in improving performance accordingly for
getting growth at workplace.
Frequency of performance review
A company can review their performance whenever they want to do because according to
that they can develop proper strategies as well as plans. In addition to this, it is considered that
the 6 to 12 months gap is essential for conducting performance review. This is so because
employees get time to enhance their work, skills and abilities in the specific time duration.
Importance of performance review
 Through performance management ZARA able to provide a summary to their employees
that how they performed in specific situation according to which they can conduct
improvement in themselves.
 By the help of performance management respective company able to provide clear as
well as objective feedbacks to employees which will base on goal of organization and
employees growth.
9. What you learnt during the module; and what you learnt in preparing the assignment.
While conducting respective module or project I able to learn numbers of things which
help me in developing my future in effective manner. I able to understand that for every
individual as well as company performance appraisal is necessary because through that they can
understand their strengths as well as weakness according to which improvement strategies can be
developed. Moreover while doing module work I also conduct my performance analysis through
which I get know that I need to enhance some skills such as understanding, research,
communication so on. It is so because through that I can develop proper strategies and plans for
the improvement.
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REFERENCES
Books and Journals
Al-Zareer, M., Dincer, I. and Rosen, M.A., 2020. A thermal performance management system
for lithium-ion battery packs. Applied Thermal Engineering. 165. p.114378.
Andersen, S.C. and Nielsen, H.S., 2020. Learning from performance information. Journal of
Public Administration Research and Theory. 30(3). pp.415-431.
Elkomy, S. and Cookson, G., 2020. Performance Management Strategy: Waiting Time in the
English National Health Services. Public Organization Review. 20(1). pp.95-112.
Frederiksen, A., Kahn, L.B. and Lange, F., 2020. Supervisors and performance management
systems. Journal of Political Economy. 128(6). pp.2123-2187.
Hartinah, S. and et. al., 2020. Teacher’s performance management: The role of principal’s
leadership, work environment and motivation in Tegal City, Indonesia. Management
Science Letters. 10(1). pp.235-246.
Mouritzen, P.E. and Opstrup, N., 2020. Performance Management at Universities. Springer
International Publishing.
Mousa, S.K. and Othman, M., 2020. The impact of green human resource management practices
on sustainable performance in healthcare organisations: A conceptual
framework. Journal of Cleaner Production. 243. p.118595.
Musso, J.A. and Weare, C., 2020. Performance management goldilocks style: A transaction cost
analysis of incentive intensity in performance regimes. Public Performance &
Management Review. 43(1). pp.1-27.
Sakhdari, K. and et. al., 2020. Shaping the organisational context for corporate entrepreneurship
and performance in Iran: the interplay between social context and performance
management. The International Journal of Human Resource Management. 31(8).
pp.1020-1046.
Singh, S.K. and et. al., 2020. Green innovation and environmental performance: The role of
green transformational leadership and green human resource
management. Technological Forecasting and Social Change. 150. p.119762.
Soltani, E. and Wilkinson, A., 2020. TQM and performance appraisal: complementary or
incompatible?. European Management Review. 17(1). pp.57-82.
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