Purpose of performance management
Performance management helps in ensuring effectiveness, efficiency, and consistency towards the achievement of organizational goals. An organization is able to align its resources, employees, and systems towards the priorities and strategic objectives of an organization. Performance management helps in reconciling individual goals with those of the organization. This increases profitability and productivity of the organization. It enhances effective strategy and operational goals delivery. The programs used, improves the overall performance of an organization.
Components of performance management processes
The components of a performance system include planning, training, feedback, evaluation, and rewards for outstanding performance. The components are an essential tool for employee development. Performance planning is a means of planning and communicating the expected performance to the employees. A plan can include behaviors, competencies, induction, agreeing objectives and personal development. The role of employees in this process is of substantial importance and includes individual responsibilities, accountability, and behavior. Coaching and feedback help enhances outstanding performance since it provides informal and formal avenues for communication between managers and employees. They are able to discuss the progress, evaluate the competencies and make changes where necessary. Evaluation is the checking of progress against the set objectives and any arising demands. Evaluation and performance appraisal helps in assessing the achievement of objectives. Recognition and reward systems help in reinforcing exceptional performance.
The systems design should use the SMART criteria: reliable, achievable, timely, specific and meaningful. It is critical to examine psychological and cognitive aspects in relation to motivation and employee behavior. These factors include linking payment and performance, job satisfaction and attitudes.
Relationship between motivation and performance management
Herzberg’s two-factor theory explains satisfies and dissatisfies in the workplace (Herzberg 87). These factors influence the level of motivation. Satisfiers increase the level of motivation thus enhancing performance. Motivating factors include recognition, responsibility, work itself, and achievement. Dissatisfies lead to de-motivation and this affects performance in a negative way. These factors can arise from salary, work conditions, work environment, interpersonal relationship and administrative supervision.
The two factors are significant because they try to create a reasonable balance whereby an employee can be motivated to work. Hygiene factors eliminate dissatisfaction in the workplace. An organization can influence the motivators using performance management. This is the monitoring, evaluation and enhancing employee performance using Human Resource functions such as performance appraisals, job description, career development, rewards and continuous education. Bad employee relationship at the workplace either with fellow colleagues or the management can lead to serious dissatisfaction at work and this will significantly affect employee performance. Creating a balance and effectiveness in team management produces high-quality performance.
According to McClelland’s Achievement Motivation Theory, people with higher achievement may not perceive money as an incentive rather will view it as a means of giving back in a performance. High achievers are not likely to remain in an organization that pays well but fails to recognize their achievements. Money may seem necessary to high achievers, but they value it more as temporal success past performance. Motivated employees tend to perform better. Reinforcement theory describes the relationship between employee behavior and the consequences.
Positive reinforcement seeks to reward desirable behavior. It includes promotion, pay rise and aims at increasing profitability as well as encouraging repetition of the desirable behavior. Employees who engage in appropriate behavior face the consequences. Goal setting helps employees to work together towards achieving common goals can be a leading source of motivation. Employees are encouraged to participate and give feedback on the progress. The employees must be committed, positive and be engaged in achievable goals.
Purposes of reward within a performance management process
Reward Systems aim at employee retention, motivation, and reduction of employee turnover. Recognition and reward of individual performance is critical for managers, as it helps to recognize the exemplary performance of employees. This will help to motivate them to perform better and fulfill the organizational goals. Recognition helps to fulfill self -esteem needs of employees (Maslow, 236). Managers who recognize a job well done by employees and constantly encourage the employees to get better results. Recognition is a powerful tool in motivating employees since it helps to boost their esteem needs.
Managers should ensure that they recognize their employees through gestures such as greetings. Lack of recognition leads to mistrust, disloyalty and de-motivation. Recognition makes the employees feel significant and appreciated in the workplace (Mathis 11). This can highly motivate them to achieve the desired results since they feel part of the organization.
Components of a total reward system include payments, recognition, and responsibility
The total reward comprises of individual growth, compelling future, positive work environment and total pay. Individual growth emphasizes on career development, performance management, training, development, and the welfare of people in an organization. Compelling future deals with organizational growth, success, image, vision, values, and stakeholdership. A positive working environment focuses on leadership, employees and colleagues, open communication, commitment, trust and works itself. Total pay involves the base pay, variable pay, benefits, recognition, and rewards.
Reward programs include salary, performance appraisals, and other rewards. Rewards systems should be effective and bear positive reinforcement (Wilson and Hill, 2). Positive reinforcement helps to encourage desirable behavior among the employees in order to benefit from the outcomes. Employee benefits play an important role in total rewards. The benefits are of not- cash nature of the total reward, which caters for individual needs such as security, special finance assistance and other plans related to employee assistance.
Employees need to achieve satisfaction and fulfill their self -esteem needs in the workplace. They also desire an opportunity for training, and development and promotions in order to help them advance in their careers. A positive work environment, with open communication avenues, enhances overall employee development and performance. Total pay includes financial benefits, fringe benefits, and recognition.
Reward and recognition of employees is a critical element in performance management. Recognition helps in encouraging and reinforcing employees to work towards the achievement of organizational goals. Recognition promotes satisfactory performance among the employees and enhances the success of an organization. Managers should continuously increase the level of responsibility to employees who demonstrate an increase in their ability levels. Job design should enable the use of an employee full potential. Firms should provide a balance in the total reward system. The reward system package must have the ability to attract the appropriate talent.
In Conclusion, the Human Resource Management has evolved with time from personnel management that involved ordering employees to commitment human resource management that enable employees to be goal oriented and increase performance. Human resource is crucial for any organization, seeking to remain competitive. This is because it offers a sustained competitive advantage to the organization through recruitment and selection of the best talent and motivation of the existing workforce for higher performance and innovation.
Every organization should focus on reward management practice, financial and now -financial forms of compensation, employee retention, and commitment in order to increase sustainability and profitability of a business. Behavior, motivation, performance appraisals, coaching, and counseling improves organizational performance. Reward systems should be effectively managed and designed in order to reinforce desirable workforce behavior and enhance overall organizational performance.
Herzberg F. One more time: how do you motivate employees? Harvard Business Review. 2003;81 pp.87–96.
Maslow, Abraham Motivation and Personality. New York: Harper. 1954 p. 236.
Mathis, Robert. Human resource management. Mason, OH: Thomson/South-western, 2008 p.11
Wilson, Thomas. Innovative reward systems for the changing workplace. New York: McGraw- Hill, 1995. p. 2. http://www.opm.gov/perform/articles/026.asp.