Supporting Good Practice in Performance and reward Management 1.Explain at least 2 purposes of performance management and its relationships to business objectives Performance management is the activity and set of processes that aim to maintain and improve employee performance in line with an organisation’s objectives. It’s strategic as well as operational, as its aim is to ensure that employees contribute positively to business objectives. Ideally, performance should be managed holistically, throughout the range of HR activities and processes. 1The Performance Management Process is a key component of organisation’s overall approach to the management of its people. As part of the performance management system, Performance Management Process aims to achieve the following: •To enable an individual employee to know exactly what is expected both in terms of outputs (the delivery of agreed objectives) and the relevant, appropriate behavioural style (role-related competency models), which will underpin the delivery of the agreed objectives. •To enable individual and team effort to be focused on the delivery of the departmental business plan. •To enable an individual to identify and meet personal development needs which will facilitate the delivery of agreed objectives. •To enable individual employees to feel motivated and valued for their contribution to the on-going success of organisation. •To enable individuals to identify and achieve realistic career goals over time. •To enable the organisation to reward individuals fairly based on an objective assessment of their contribution. •To enable the organisation to audit the capability of its staff. •To enable the organisation to plan for its own staff succession. Cipdcouk. 2018. CIPD. Online. 29 April 2018. Available from: https://www.cipd.co.uk/1knowledge/fundamentals/people/performance/factsheet Go back and edit info’
•An honest and constructive working relationship between a manager and member of staff. 2The purpose of performance management is to ensure accomplishment of business objectives and to increase the strength of the employees. Accomplishment of business objectives is an essential survival goal for an organisation. In order to accomplish the business objectives these has to be established by the upper management and than communicated to its own employees. After the objectives have been communicated to the employees it has to be measured, appraised, action planned and monitored. However, the performance management process incorporates the entire business objectives evolution since its inception until its end. In order to increase the strength of the employees you have to measure it. The performance management process sets specific goals to be accomplished in certain time. The strength of the employees is increased by motivation and reward. To motivate and retain high performance by providing career development programs including motivational and reward strategies, challenging work assignments and other on-the –job learning initiatives that will lad to career development and ongoing job satisfaction. The performance management process is usually designed to help employees understand what they need to learn and how they need to learn it. Employees are expected to be in a constant growth and learning mode, demonstrating organisation and/or role-specific competencies; the bundles of skills, behaviours and knowledge that are critical to the organisation’s ability to execute its business strategy. ?Coaching and mentoring programs are used on a formal basis to provide employees with ongoing support as they develop and apply new competencies. 2. Identify 3 components of performance management system. • Performance Planning (includes employee goal setting / objective setting) • Performance Appraisal Meetings. • Performance Diagnosis and Coaching 3. Explain the relationship between motivation and performance management, referring to at leats 2 motivational theories. Maslow Abraham Maslow (1908 – 1970) along with Frederick Herzberg (1923-) introduced the Neo-Human Relations School in the 1950’s, which focused on the psychological needs of employees. Maslow put forward a theory that Chartered Institute for Personnel and Development 2009 – Discussion Paper on Performance 2Management, Issued on 2009; Reference: 4741
there are five levels of human needs which employees need to have fulfilled at work. All of the needs are structured into a hierarchy (see below) and only once a lower level of need has been fully met, would a worker be motivated by the opportunity of having the next need up in the hierarchy satisfied. For example a person who is dying of hunger will be motivated to achieve a basic wage in order to buy food before worrying about having a secure job contract or the respect of others.A business should therefore offer different incentives to workers in order to help them fulfil each need in turn and progress up the hierarchy (see below). Managers should also recognise that workers are not all motivated in the same way and do not all move up the hierarchy at the same pace. They may therefore have to offer a slightly different set of incentives from worker to worker. Herzberg Frederick Herzberg (1923-) had close links with Maslow and believed in a two-factor theory of motivation. He argued that there were certain factors that a business could introduce that would directly motivate employees to work harder (Motivators). However there were also factors that would de-motivate an employee if not present but would not in themselves actually motivate employees to work harder (Hygiene factors) Motivators are more concerned with the actual job itself. For instance how interesting the work is and how much opportunity it gives for extra responsibility, recognition and promotion. Hygiene factors are factors which ‘surround the job’ rather than the job itself. For example a worker will only turn up to work if a business has provided a reasonable level of pay and safe working conditions but these factors will not make him work harder at his job once he is there. Importantly Herzberg viewed pay as a hygiene factor which is in direct contrast to Taylor who viewed pay, and piece-rate in particular Herzberg believed that businesses should motivate employees by adopting a democratic approach to management and by improving the nature and content of the actual job through certain methods. Some of the methods managers could use to achieve this are: Job enlargement – workers being given a greater variety of tasks to perform (not necessarily more challenging) which should make the work more interesting. Job enrichment – involves workers being given a wider range of more complex, interesting and challenging tasks surrounding a complete unit of work. This should give a greater sense of achievement Empowerment means delegating more power to employees to make their own decisions over areas of their working life 3 tutor2u. (2018). Theories of Motivation (GCSE) | tutor2u Business. online Available at: https://3www.tutor2u.net/business/reference/theories-of-motivation-gcse Accessed 29 Apr. 2018.
4. Identify 2 purposes of reward within a performance management system. In any organisation the main purpose behind rewarding employees is to motivate them, retaining them to the company and reducing the turnover costing. Employees are the most important valuable possession of the company and it is very important to continuously encourage them for their contribution to the organisation. These reward systems are mainly been introduced into the company’s environment to give a recognition and encouragement to the committed employee of the company for his extraordinary performance in the company by this Staffs understand what they are expected to do. 5. Describe at least 3 components of a total reward system, 1 of each should not be financial. The total reward system is a multitude of tools that the employer has in its hand and may be used to attract, motivate and retain employees. From the employee point of view the total rewards represent everything that he/she perceives to be of value resulting from the employment relationship. The reward concept covers both financial and non financial pay.The components of a total reward system are: •Compensation – is a critical component of the reward system that includes: basic pay system (annual or monthly salary rate) and variable or incentive pay systems (sales commissions, appraisal/performance-related pay, skills-base pay, etc.) •Benefits – are used to supplement the cash compensation that the employees receive and are designed to protect the employees and the family from financial risks. Example of benefits: social insurance, life insurance, medical insurance, dental, retirement plan, savings scheme, uniform, gym membership, company car, breaks, clean-up time, company holidays, vacation, personal das, etc.Work life- in this category is included the followings: workplace flexibility, paid and unpaid time off, health and well-being, caring for dependents, financial support, community involvement, and management involvement/culture change intervention. •Performance and recognition – Performance is a key component of the organisational objectives and involves the alignment of organisational, team and individual effort towards the achievement of business goals and organisational success. The recognition acknowledges and gives special attention to employee’s action, efforts, behaviour or performance. Recognition programs acknowledge the employee contribution immediately after the task has been completed. This type of recognition award can be financial or non-financial (e.g., verbal recognition, certificates, trophies, tickets, dinners, etc.)
•Development and career opportunity – includes learning opportunities (e.g. on the job learning, tuition, seminars and conferences attendance, corporate universities, self development tools and techniques, new technology training, etc.); coaching/mentoring(e.g., leadership training, formal and informal mentoring programs, association memberships, exposure to resident experts, etc.) and advancement opportunities(e.g., internal job openings, promotions, overseas assignments, internships, succession planning, career pathways, etc.) 6. Explain the factors that should considered when managing good and poor performance. Managing performance should be a continuous process that aims to improve an individual/organisational performance. It is a way of measuring what an employee contributes to the goals of their teams and the business as a whole. When managing performance, we must consider the following factors; Employees must be able to understand their objectives and know what they need to do to meet them. Targets are usually agreed at the start of a year so the individual can start the year knowing what they need to achieve and can then be reviewed at the end of the year. Agreeing the objectives should be a two-way discussion between the line manager and employee. A useful objective should be achievable but challenging, it should be relevant to the department and business, should be readily measurable, and it should have a timeframe of when it needs to be achieved. It is essential that an employee receives regular feedback when it comes to managing performance. Feedback needs to be given to employees so they can understand how they are progressing and what they need to improve on. Feedback shouldn’t have any mix messages. If improvements need to be made to an employees? performance, the constructive feedback should be given in a timely and effective manner so the employee can soon think of solutions. It is essential to focus on the resources that the employee uses within their role as this could be affecting their performance. A manager should listen and address any issues that an employee may have, but the manager needs to be sure that these issues are genuine as employees? can often blame external sources before admitting their fault. When managing poor performance, a manager should identify what is causing the employee to underperform; they should do this by addressing the underperformance with the employee in one to one meetings. Managers need to be trained in handling difficult conversations and need to feel confident in managing any sensitive discussions. It is essential that a manager provides the relevant support as it will help the underperforming employee understand the opportunities for improving their performance and taking the necessary action. Organisations often manage poor performance formally through a
performance improvement plan (PIP). The PIP should be carefully monitored and should set out the following; The performance problem?The timescale for achieving this improvement?A review date Specify possible consequences if performance standards are not met any training that the employer will provide to assist the employee. 7.Describe at least 2 items of data, including 1 external to the organisation.
