Good Practice in Performance and Reward Management Report

This report provides a detailed analysis of performance and reward management, exploring its purpose and relationship to business objectives. It identifies key components of a performance management system, including job descriptions, interviews, and coaching. The report examines the connection between motivation and performance management, referencing Herzberg's and John Adair's theories. It also discusses the purposes of reward within performance management, such as employee engagement and business reputation, and outlines the components of a total reward system, including compensation, recognition, and work-life balance. Furthermore, it covers factors to consider when managing both good and poor performance, along with the use of data like operational budgets and customer satisfaction. Finally, the report addresses the frequency, purpose, and process of performance reviews, emphasizing the importance of regular evaluation for continuous improvement and alignment with organizational goals.

SUPPORTING GOOD PRACTICE IN
PERFORMANCE AND REWARD MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Question 1: Purpose of performance management with its relationship to business objectives.1
Question 2: Identification of the components of performance management system..................1
Question 3: Relationship between motivation and performance management...........................2
Question 4: Purposes of reward within performance management............................................3
Question 5: Components of total reward system........................................................................4
Question 6: Factors needs to be considered while managing good and poor performance........4
Question 7: Items of Data...........................................................................................................5
Question 8: Frequency, purpose and process of performance review........................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Performance management helps the businesses in setting up an environment in which its
employees are able to perform at their complete potential. It is one of the most important aspect
for an organisation which helps it achieve growth and success. The present report is going to
discuss the purpose of performance management and its relationship to the objectives of business
(Collings, Wood and Szamosi, 2018). It highlights its components, the relationship between
performance and motivation management, its frequency, purpose and process.
MAIN BODY
Question 1: Purpose of performance management with its relationship to business objectives
Below mentioned are the purpose of performance management and in what manner it
helps to achieve the objectives of business: Addressing an urgent challenge: Performance management tends to help the business in
addressing the urgent challenge being faced by the business. It helps the organisation in
understanding the challenges and in what manner it should deal with it, in order to ensure
smooth flow of operations and functioning of its activities. For example, businesses often
faces challenges related to employee performances. Their performances can make or
break the reputation of the business (Rothwell, Hohne and King, 2018). Performance
management tends to help the business in finding those challenges and understand in
what manner it should act to develop its potential and provide required motivation to the
employee to achieve set growth and development.
 Eliminating occurring faults: Performance management helps the business to eliminate
occurring faults. This improves the efficiency of the business and helps it in ensuring that
set goals and objectives are being achieved without facing any issues. For example,
performance management tends to identify at what places the organisation is facing
issues related to growth and development, what are the problems which are making its
functioning slow. From the identification of these problems, it becomes easy for the
business to eliminate occurring faults and ensure that set profitability and development is
being achieved.
Question 2: Identification of the components of performance management system
Below mentioned are the three main components of performance management:
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 Developing job descriptions: It is important for the business to develop job descriptions
to hire effective employees. It is one of the most important component of performance
management to ensure that appropriate job descriptions are being made and the right
skilled and knowledgeable employees are being hired. It helps the business to achieve
required objectives and ensure set growth and development is being made. Along with it,
building of good job descriptions helps the business to attract the right employees and
hiring them to achieve set goals and objectives. Conducting interviews: After screening applications, it is important to conduct the
interviews to select the appropriate employees for the chosen job roles. The performance
management helps the business in conducting the right interviews and selecting the
appropriate employees and ensure set development. Also, interviews tends to examine the
capability and rightfulness of the employees and ensures set development is being
achieved.
 Providing on-going coaching and feedback: It is important for a business to provide
coaching and feedbacks to the employees which lacks knowledge and skills. As being its
one of the main components, the performance management helps the business in
provision of effective coaching and feedback to the employees (Akhtar, 2018). This
develops their performance and makes it possible for the business to develop its potential
to deal with the challenges and overcoming them effectively.
Question 3: Relationship between motivation and performance management
Below mentioned is the relationship between motivation and performance management
with the help of two theories:
 Herzberg's motivation theory: It is important for the business to ensure appropriate
motivation is taking place. The Herzberg's motivation theory allows the business to
provide its employees with effective motivation. Their are two main factors which are
considered under this theory. These factors are:
1. Motivators: Motivators tend to help the business to motivate its employees by
achievement, recognition, advancement, growth etc. Motivators are an essential part of
the business in order to provide its employees with growth and development and ensure
that they are working as per the set needs and requirements of the business. Performance
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management helps the business to identify at what place it should provide motivation to
its employees and achieve chosen goals and objectives effectively.
2. Hygiene Factors: The hygiene factors tends to make the employees follow company
policies and maintain required hygiene practices. It is done because from the absence of
hygiene factors the employees will work less hard. The performance management
identifies the employees hygiene practices under this theory and ensure that the
environment of the organisation is positive and required growth is being achieved.
 John Adair's theory: Performance management requires basic principles under which it
tends to operate and achieve set growth and development. The first and the foremost
principle which Adair explores is the achievement of tasks under which the business
tends to make its employees achieve tasks after identifying their potential in performance
management (Hong, Zhang and Ding, 2018). Later as per their potential teams' are built
and the individual are developed in order to achieve business growth and set objectives.
Question 4: Purposes of reward within performance management
Reward is one of the most effective requirement of a business in order to provide its
employees with appropriate appraisal and recognition. Below mentioned are the purposes of
reward within performance management: Employee engagement: It is important for a business to stay engaged with its employees.
It helps the business to achieve set growth and keep its employees motivated and
satisfied. The performance management is based on the performance of the employees of
the business and as per their performance it becomes important for the business to
provide them with required reward. Provision of reward within performance management
allows the business to increase employee engagement and ensure that they are motivated
enough to work hard for the business.
 Business reputation: It is one of the most important aspect for a business to have
appropriate reputation in place. It is because without having good reputation the business
cannot succeed and develop its potential to reach set growth and development. It is also
one of the main objective of performance management, because without having business
reputation the business cannot grow and performance management helps it to grow and
achieve set goals and objectives. The reward system helps the organisation to gain a
reputation in the market. It is because when people tend to look at the reward provision or
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capability of the organisation they feel more attracted towards working with it or being a
part of it (Mizrahi and Minchuk, 2019). It helps the organisation to achieve growth and
reputation within the community and its competitors as well.
Question 5: Components of total reward system
Total reward system refers to the efforts which are used by an employer in order to
recruit, motivate, and retain employees. Below mentioned are its components: Compensation and benefits: It is important for a business to provide compensation and
benefits to its employees if there performance is good and growth oriented. In
performance management the total reward system helps the business to provide required
benefits and compensation to its employees. This ensures appropriate growth and
development of their own and overall business is taking place. Recognition: It is important for a business to provide recognition to its employees in
order to achieve set growth and development. Along with it, the practice of recognition
allows them to build their personal potential and develop themselves personally. The
performance management of an organisation allows the employees to receive recognition
as per their capability and performance and helps the business to provide motivation to
its employees. This helps the business in achieving set growth and development as well.
 Work-life balance: Employees of the organisation seeks work-life balance because
without balance, survival becomes hard. The total reward system allows them to manage
work life balance by providing the employees a chance to meet their personal goals and
obligations. It helps them to work effectively and manage their personal life effectively
from constantly achieving new growth and development.
Question 6: Factors needs to be considered while managing good and poor performance
GOOD PERFORMANCE MANAGEMENT Scope of development: In order to manage good performance, it is important to ensure
that there is an existing scope of development if required. At times when an employee
performs good, the business should see if there's a scope of development and the
employees can be brought to their complete potential (Collings, Wood and Szamosi,
2018). This provides high chances of development and increases businesses reputation.
 Risk of deterioration: Managing good performance requires understanding of the
deterioration of the employees performance level. It is because an employees
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performance can face issues in the future and can deteriorate to a level of failure.
Identification of this can help the organisation to ensure appropriate growth and
development is taking place and ensuring better employee development.
BAD PERFORMANCE MANAGEMENT Identification of improvement: Bad performance management requires identification of
the improvements. It is important for the business to improve itself in order to reach new
growth and success. The business can develop itself only if when the bad performances
of the employees are being turned towards good. This helps the business and the
employees both to receive appropriate development.
 Eliminating re-occurrence: It is important for the businesses while managing bad
performance management to ensure that it is eliminating the re-occurrence of the factors
impacting its growth and development. This helps the business to reach new growth and
ensure that set development is taking place appropriately and its performance its
appropriate as required.
Question 7: Items of Data Operational and Financial Budgets: The budgets tends to determine in what ways
financial resources are being used and managed within the organisation. This helps the
business or the organisation to ensure that appropriate growth and development is taking
place. It helps the organisation to reach new growth aspects and develop its potential to
reach better performance management (Akhtar, 2018). The budgets ensure that the
overall performance of the organisation is safe and everything is working as per the set
needs.
 Customer Satisfaction data (External): The customer satisfaction data is another
important data used in managing performance. It is because, it helps the organisation or
its business to manage the data of the customers and understand in what manner
performance is being driven through them. This tends to ensure safety and security of the
organisational goals and objectives and ensure that appropriate growth and development
is taking place.
Question 8: Frequency, purpose and process of performance review
The frequency of performance review needs to be on monthly basis. It is because the time
of a month is appropriate in measuring the performance of the employees working within the
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organisation and the performance of the business itself. This helps the business to appropriately
measure the performance and make changes as per the set needs and requirements in the period
of a month.
The purpose of performance review is to measure and understand the performance of the
businesses and its employees. This helps the business to ensure that set growth and development
is being achieved as per the requirements and its performance is as per its needs and
requirements.
The process of the performance review first requires to ensure that employee's job
description is up-to-date, next is to clarify key job functions, then revisiting performance
expectations and revisiting goals and objectives etc. These all functions ensure that the
performance review is taking place effectively and it is helping the business in reaching set
growth and development as per the set needs and requirements. It allows the business to expand
into new horizons and improve its overall business performance.
CONCLUSION
The practice of performance management allows the business to achieve its goals and
keep improving itself in order to reach its desired vision. As per the drawn conclusions, it can be
seen that recognition and compensation are the main components of rewards system under
performance management. Also, it has been concluded that it is important for a business to keep
conducting performance management in order to reach set growth and development and achieve
set goals and objectives.
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REFERENCES
Books and Journals
Akhtar, M., 2018. Strategic performance management system in uncertain business environment:
An empirical study of the Indian oil industry. Business Process Management Journal.
24(4). pp.923-942.
Collings, D. G., Wood, G. T. and Szamosi, L. T., 2018. Human resource management: A critical
approach. In Human Resource Management (pp. 1-23). Routledge.
Hong, J., Zhang, Y. and Ding, M., 2018. Sustainable supply chain management practices, supply
chain dynamic capabilities, and enterprise performance. Journal of Cleaner
Production.172. pp.3508-3519.
Mizrahi, S. and Minchuk, Y., 2019. Accountability and performance management: citizens’
willingness to monitor public officials. Public Management Review. 21(3). pp.334-353.
Rothwell, W. J., Hohne, C. K. and King, S. B., 2018. Human performance improvement:
Building practitioner performance. Routledge.
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