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Introduction
Performance and reward management are two essential human resource management practices that are closely linked.
Performance management is the process of setting goals, measuring progress, providing feedback, and taking corrective action to improve employee performance.
Reward management involves the development and implementation of policies and practices that ensure employees receive fair and equitable compensation for their contributions to the organization.
Let's watch a video on performance and reward management -
Overview of Performance Management
Performance management is a continuous process that involves setting expectations, measuring progress, providing feedback, and taking corrective action to improve employee performance. Effective performance management requires clear and specific performance expectations that are aligned with organizational goals and objectives. (Armstrong, 2014)
Managers should provide regular feedback to employees on their performance, highlighting areas of strength and identifying opportunities for improvement. Managers should also set SMART (specific, measurable, achievable, relevant, and time-bound) goals for employees that are aligned with organizational goals and objectives. (Armstrong, 2014)
An effective performance management system includes these key components: (Glenn Phelps, 2005)
- hiring and promoting employees into roles that fit their talent
- creating a supportive work environment
- freeing teams to develop their own workflows
Overview of Reward Management
Reward management involves the development and implementation of policies and practices that ensure employees are fairly compensated for their contributions to the organization. This includes salary, bonuses, benefits, and other forms of compensation. (Armstrong, 2014)
Effective reward management requires a clear understanding of the market value of jobs and the skills and experience required to perform them. It also requires a fair and transparent process for determining compensation, based on performance and other relevant factors. Organizations should regularly review and update their compensation policies and practices to ensure they remain competitive and fair. (Armstrong, 2014)
Armstrong (2014) identifies the below matrix that could be used to rate an employee based on his/her performance and behaviour. An employee would be placed on one of the grid and agree the ratings based on which rewards would be considered.
Strategies for Enhancing Performance and Reward Management
There are several strategies that organizations can use to enhance their performance and reward management practices. These include:
- Aligning performance and reward management with organizational goals and values
- Providing regular feedback and coaching to employees to improve their performance
- Using objective measures to evaluate employee performance
- Developing a clear and transparent process for determining compensation
- Offering a variety of rewards and recognition programs to motivate and engage employees
Research based results -
- It was reported by the IPM in 1992 that their extensive research found no evidence that improved performance in the private sector is associated with the pursuit of formal performance management programmes.
- As reported by Risher (2005) Gallup has analysed its Q 12 survey and found that employers with a formal performance review process have more engaged employees – 33% versus 21% – and fewer disengaged employees – 12% versus %.
- As reported by Kochanski (2007) a survey by Sibson and World at Work found that high performing firms have strong leadership support for performance management.
Conclusion
Performance and reward management are essential practices for achieving organizational goals and enhancing employee engagement. Organizations must ensure that their performance and reward management practices are aligned with their goals and values and that they provide regular feedback, use objective measures, and offer fair and transparent compensation. By implementing these strategies, organizations can improve their performance and reward management practices and enhance their overall organizational performance.
References
Glenn Phelps. (Feb 2005) The fundamentals of performance management
Gallup (Online)
Available at https://news.gallup.com/businessjournal/14875/fundamentals-performance-management.aspx
Accessed on 04th April 2023
Strategic reward management is important because it helps to make employees feel valued for their contributions to the business. By implementing clear company policies for reward management, you make it an equal opportunity for each employee to work for positive rewards.
ReplyDeleteStrategic reward management system is on the key factor in an organization. To absorb the maximum commitment from the human capital of the organization, it is necessary to introduce proper, logical and transparent reward system to the company.
ReplyDeleteOverall it gives us an idea about reward management and performance management combined,I like to add a point on performance management where encouraging a high impact learning culture would also enhance performance and increase employee retention in the company.(• Bersin, J., 2008. The high impact learning organization. Bersin & Associates Industry Report, 1. )
ReplyDeleteThank you for the informative article. You did an excellent job of explaining the importance of aligning performance management and reward systems with organizational goals and objectives.
ReplyDeleteI would like to suggest you to explore the role of technology in performance and reward management. With the increasing use of HR technology solutions such as performance management software, it would be interesting to discuss the potential benefits and challenges of using technology in performance and reward management.
The article provides a clear and concise overview of the importance of performance and reward management practices in human resource management. The author highlights the process of performance management and the key components required for its effectiveness.The article is well-supported by academic sources. Armstrong (2014) provides useful insights into performance and reward management practices, including the matrix for rating employee performance and behavior. The article also cites research by IPM, Risher (2005), and Kochanski (2007), which provide evidence of the benefits of formal performance review processes, strong leadership support for performance management, and their positive impact on employee engagement.
ReplyDeleteOverall, the article provides valuable information for organizations seeking to improve their performance and reward management practices to achieve their goals and enhance employee engagement.
Well-discussed article on PERFORMANCE & REWARD MANAGEMENT. HR Zone, (2018) However, there are many obstacles that could prevent this from succeeding, including the following: Lack of involvement in the design and implementation of policy; lack of support from senior management; lack of commitment from line managers; lack of understanding and training in the policy and process; previous experiences that led to pessimism; distrust; and doubt; time constraints; failure to monitor objectives; and limited resources in the form of reward packages and training support. When developing management systems and expecting more from employees, it is crucial that an employer be aware of issues and takes into account how to overcome them. employees, it is crucial that an employer be aware of issues and takes into account how to overcome them.
ReplyDeleteYour article provides a comprehensive overview of performance and reward management, and highlights the key components of effective performance management and reward management systems. How can organizations ensure that their performance and reward management systems are fair and transparent, especially when determining compensation based on performance?
ReplyDelete