Performance and reward management

  

 

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Introduction

 

According to (Armstrong,2014) “performance is concerned with how well something is done, and reward is with how people should be recognized for doing it. Performance management and reward management are closely associated topics that play an important part in achieving one of the key goals of HRM – to contribute to the development of a high-performance culture. This is understood by the CIPD, which in its profession map (2013) defines what an HR or reward professional needs to do about performance and reward as follows: ‘Builds a high-performance culture by delivering programmers that recognize and reward critical skills, capabilities, experience, and performance and ensures that reward systems are market-based, equitable and cost-effective.”

As defined by Aguinis (2005: 2) “Performance management is a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.’ Its five elements are agreement, measurement, feedback, positive reinforcement, and dialogue.”

Performance management should be based on an understanding of what the word ‘performance’ means. Those concerned with introducing and operating performance management should be aware of the underpinning theories and the principles evolved by practitioners from their experience.

 

 

 

The Performance Management Cycle

The performance management process or cycle is a series of five key steps. These steps are imperative, regardless of how often you review employee performance.

 

1. Planning

This stage entails setting employees’ goals and communicating these goals with them. While these goals should be disclosed in the job description to attract quality candidates, they should be communicated once again when the candidate becomes a new hire. Depending on the performance management process in your organization, you may want to assign a percentage to each of these goals to be able to evaluate their achievement.

 

2. Monitoring

In this phase, managers are required to monitor the employee’s performance on the goal. This is where continuous performance management comes into the picture. With the right performance management software, you can track your team’s performance in real-time and modify and correct course whenever required.

 

3. Developing

This phase includes using the data obtained during the monitoring phase to improve the performance of employees. It may require suggesting refresher courses, providing an assignment that helps them improve their knowledge and performance on the job, or altering the course of employee development to enhance performance or sustain excellence.

 

4. Rating

Each employee’s performance must be rated periodically and then at the time of the performance appraisal. Ratings are essential to identify the state of employee performance and implement changes accordingly. Both peers and managers can provide these ratings for 360-degree feedback.

 

5. Rewarding

Recognizing and rewarding good performance is essential to the performance management process, as well as an important part of employee engagement

 

. You can do this with a simple thank you, social recognition, or a full-scale employee rewards program that regularly recognizes and rewards excellent performance in the organization.

“The future of performance management is all about empowering workers. The developments in the previous eras have landed HR departments with the most important problem to solve: What can we do to help our employees and give them a better experience? It is going to become an outcomes-driven way of thinking about performance management. HR departments will empower employees with learning and development opportunities, engaging in ongoing performance management, keeping performance conversations forward-focused, and yet remaining adaptive. When employees are satisfied and have feelings of contribution, better business outcomes are bound to manifest. With mobile technology also giving us even more flexibility than ever before, and with more companies recognizing the value of having a great and productive company culture, the definition of what good performance is will continue.”

 

 

 

Armstrong, M. and Taylor, S. (2014) Armstrong’s Handbook of Human Resource Management Practice. 13th edn. London: Kogan Page publishers.

 

 

[Online] Spiceworks What Is Performance Management? Definition, Process, Cycle, and Best Practices for Planning [Available From] https://www.spiceworks.com/hr/performance-management/articles/what-is-performance-management/#:~:text=Recognizing%20and%20rewarding%20good%20performance%20is%20essential%20to,recognizes%20and%20rewards%20excellent%20performance%20in%20the%20organization. [Accessed on 06.12.2022]