Managing Director

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Coursework

Report:

‘Fundamentals of a performance management system linked to reward’.

To: Module Leader Bev Crighton

By: Filip Gorski

29 December 2010

Content

Executive summary……………………………………………………………………………………..3

1.Introduction……………………………………………………………………………………………..4

2.Components of performance management systems…………………………..4-7 3.Relationship between motivation and performance management......7-8

4.Total reward system in relation to performance management………….9-10

5.Conclusion………………………………………………………………………………………………10

Bibliography……………………………………………………………………………………………….11

Executive summary

This report was commissioned to examine fundamentals of performance management system linked to reward. This paper draws attention to reward, as a vital element of performance management system. As there are many tools available to managers to reward an employee, starting from understanding, how the targets should be set, then creating appropriate appraisals systems for using different feedback techniques. It is claimed by many managers, that the performance appraisal system can bring a lot of benefits to both employees and employers. It is crucial to provide employees with an opportunity to discuss their performance and its standards, as frequently, as possible with their supervisor to help employee to improve their performance. In this report, I will present a special system called ‘360-degree’, which gives a feedback and valuable approach to performance appraisal. There are five points to conduct performance appraisal: - measurement, assessing performance against agreed targets -feedback providing information to the individual on their performance, -emphasizing what has been done well and making only constructive criticism -exchange of views, gives a frank exchange of views about what has happened -agreement, jointly coming to an understanding by all parties about what need to be done to improve performance.

KPIs stands for key performance indicators they are usually expressed as a number and captures a key driver of the business. KPIs should be as closely linked as possible to the top-level goals for the business, they should relate to aspects of the business environment which are over control.

Setting targets is an essential part of management, as without is we would not be able to measure the performance. Targets should be SMART: -specific, targets should focus on clearly defined task

-measurable, targets should be easy to check and control
-achievable, targets need to be in line with employee abilities to cope with them -realistic, targets have to fit in the pattern of individual work -time, targets need to have strict time frames Level of performance if determined by motivation and performance. The relationship between motivation and performance can be expressed in the following formula: P (performance) =A (ability) + M (motivation) Total reward system is a combination of the tools available to the employer that may be used to attract, motivate and retain employees. It includes everything that employee get when he starts employment relationship.

1.Introduction.

To start with, performance management is a special management tool, which is used to measure employee performance. This starts with a need for a new position in the company and ends when an employee leaves. The system enables to monitor,...
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