Supporting Good Practice in Performance and Reward Management

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1. Explain at least 2 purposes of performance management and its relationship to business objectives A purpose of performance management is motivating staff. By investing in and training employees, giving them opportunities for promotion, this allows employees to grow professionally and personally and gives them career advancement. This then improves their contribution to the business and therefore helps the business to achieve its objectives. Another purpose of performance management is to monitor performance – good and bad. Performance needs to be managed and addressed in a positive way, so that the employee is aware of what is expected of them at all times. Good performance needs to be rewarded so that the employee feels that their efforts have been recognised – this can be done by offering training, job rotation/job enlargement and a career plan for promotion. The commitment and increased skill set from the employee will then contribute to the company achieving its business objectives, and possibly increasing business for the company due to extra expertise from employees learning new skills through training and development. 2. Identify 3 components of performance management systems Three components of performance management systems are Career Development, Rewards, Performance Planning and Objective setting. Career Development: The company ensures the development of individual employees by offering further training, coaching, job rotation and job enlargement. Looking at future job opportunities for the employee and ensuing that a plan is put into place so that the employee can move in these opportunities. Rewards: Rewards can be financial and non-financial – non-financial rewards include public recognition for a job well done – employee of the month schemes are an example of this where an employee is congratulated on their efforts in front of their team/the company. Financial rewards can be salary increases and bonus payments related to reaching targets set. Performance Planning and Objective Setting: This allows the company to give clear direction of what is expected of the employee, so they know what their goals and objectives are as an individual and how the employee contribution helps the company to reach its business objectives.

3. Explain the relationship between motivation and performance management, referring to at least 2 motivational theories There is a direct relationship between motivation and performance management - employees need to be motivated to achieve their aims and objectives and to perform well in their position. They need to be motivated by various different factors in order to feel fulfilled and motivated and therefore will perform well in their job. Maslow’s theory on motivation is that each of us is motivated by needs and there is a hierarchy of needs and each need has to be fulfilled in turn before a person is motivated. The first needs are basic survival air/food/drink/shelter/warmth/sex/sleep etc – these are achieved by paying an employee a good salary for their position, benefits and offering acceptable working conditions. Next are safety needs – shelter, security, stability, an organised world – these needs can be met by job security, a clear organisational structure and giving the employee a clear understanding of what their job role is. Next come Social needs – a sense of belonging, contact, friendship, love and affection – these needs can be met by the employee being part of a team at work, good communication within the company and possibly offering social clubs/organising social gatherings/outings for employees. Next Maslow explains that we have esteem needs – status, recognition, strength, confidence, respect from others – these needs can be met by job status, promotion prospects and positive feedback from management and team members. Next and lastly is the need for self-actualisation – to develop ones full potential, self-fulfilment – these needs can be met...
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