The Link Between Performance and Reward

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Do some background reading and carry out some research to explain the link between organisational success, performance management and motivation and the relationship between performance management and reward. Write a report of no more than 1000 words, which summarises the outcome of your research and should include:

1. Terms of Reference
1 This report aims to examine performance and reward management, as well as the link between the two in terms of motivation and organisational success.

2 The report focuses on:
1 The purpose and components of performance management systems 2 The link between business objectives and performance management 3 Motivational theories which define the link between motivation and performance management 4 The purpose of reward and components of a total reward system

3 “Performance management is a vehicle for the continuous and evolutionary improvement of business performance via a co-ordinated programme of people management activities” (Armstrong, 2000, p143) and three elements of the system necessary to achieve this will be described. 1 Procedure

1 The research was conducted by gathering information from a variety of resources. Once the key areas of research were identified as per the ToR, relevant information was then collated in note form and then transcribed into a report format.

2 The ease of accessibility and abundance of literature and information on websites such as google books was the reason for selection. The extensive knowledge and experience of the HR Manager and college tutor provided the report with a reliable source of information.

3 The primary data consisted of:
1 One to ones with HR Manager
2 Notes from Certificate of HR Practice lessons

4 The secondary data consisted of:
1 Literature
2 Internet and CIPD website
3 Leeds Community Healthcare Intranet and Policies
4 Handouts and slides from Certificate of HR Practice 2 Findings
1 The “primary purpose of performance management is to improve performance by developing the capacity to work effectively” (Armstrong, 2000, p158) and this is linked to the business objectives as follows:

1 It promotes individuals’ development by having a framework for managing performance which increases the likelihood of employees developing to their potential. The capability requirements of individuals are assessed and individuals are reviewed against agreed plans. The key to a meaningful analysis is based on an understanding of what people do, what they have achieved, what knowledge and skills they have, and what knowledge and skills they need. Development needs are therefore identified against business objectives at every point in the performance management cycle and are “always related to work and the capacity to carry it out effectively.” (Armstrong, 2000, p161)

2 It facilitates a shared understanding as employees clearly know what is required of the business and are encouraged to take responsibility for achieving the business goals.

2 The performance management system offers a systematic and analytical approach and all of its components are essential:

1 The review, feedback and reporting stage is the “tail that wags the dog” (Martin and Jackson, 2005, p143) is quite simply looking at past performance, labelling weaknesses as areas for improvement for the coming year and determining development needs in relation to the business. As it is a retrospective look it needs to be handled with care, not to be detrimental to the employee and only with a clear three to five year business plan can it be of use.

2 The performance planning stage is a more proactive approach. The business needs and the personal needs are used in harmony to forward think what is required to meet both needs. A predetermined framework means the...
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