Rewards and Performance Management

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Rewards and Performance Management
Rewards and Performance Management

Rewards and performance management

Arnolds and Boshoff (2002) investigating the influence of need satisfaction on self-esteem and performance of managers and employees as advanced by Alderfer found out that need satisfaction gives a positive influence on self-esteem which in turn exerts a positive influence on employee’s job performance. According to Alderfer, they say employees look to satisfy three major needs to drive motivation and engagement at the workplace:

Existence needs – Basic material existence motivators that sustain and provide a sense of security
Relatedness needs – Need for maintaining interpersonal relationships and belonging to groups
Growth needs – Intrinsic desire for personal development and reaching one’s full potential
Employers, therefore, design tools and programs to attract, retain and motivate employees based on their needs of existence, relatedness and growth in a concept referred to as total reward systems. According to Armstrong and Baron (2004), total rewards concept considers looking at rewards in a broader integrated and coherent wholesome way. Total Rewards will, therefore, include everything the employee perceives to be of value resulting from the employment relationship. These may include compensation, benefits, work-life balance, performance & recognition and development & career opportunities among others.

One of the challenges organizations are facing today is getting the right mix of rewards to ensure equity in compensation. Employers, therefore, try to put in place reward portfolios that will support its Employer Value Proposition in the market with pay for performance being a major guiding principle. Management must, however, ensure that there is a balance between creating shareholder value and fulfilling employee needs. Mujtaba and Shauaib (2010) point out the importance of having appropriate pay systems that encourage and reward employees to drive focus and efficiency in producing quality products for attraction and retention of qualified and committed people. They further explain that with the push to develop reward programmes that encourage employees to work harder and faster, the risk of unethical behaviors being used resulting from the pressure related to performance and incentives or ineffective implementation procedures becomes high. They, therefore, advise training and education of managers to ensure proper design and implementation of reward systems and further suggest integrating the reward system into the performance management system that is strategically aligned to the organization’s mission and vision statements.

Aguinis (2012) advises creating a performance management system whose performance standards are clearly defined and explained, having standardized procedures that are uniformly communicated to all employees, providing timely performance information to employees, allowing employees to challenge ask questions at the review process and treating them with courtesy and civility during the process, allowing for formal appeals, performance information to be gathered from multiple, diverse unbiased raters, offering formal training to supervisors and ensuring the system is consists flawless procedures and thorough documentation processes to detect any potential discrimination effects or biases or abuses to avoid litigation issues.

Armstrong and Baron (2004) therefore suggest separating performance for pay and performance for development discussions to ensure that meaningful development discussions take place. In this case chances of unethical practices such as awarding ratings inappropriately or using development opportunities as a reward favor become less.

Aguinis (2012) concludes that pay is not the only motivator and that people want more out of a job as they seek an environment that provides full satisfaction and engagement based on trust, respect and established relationships. Reward systems he says must transcend beyond pay and be seen as a vehicle to drive positive behavior to realize good performance results.

Rewards and Performance Management References

Aguinis, H. (2012) Performance management, 3rd ed. Upper Saddle River, NJ: Pearson Prentice Hall.

Armstrong, A. & Baron, A (2004) Managing performance: performance management in action, 2nd ed. London: CIPD.

Mujtaba, B. G. & Shauaib, S. (2010) ‘An equitable total rewards approach to pay for performance management’,Journal of Management Policy and Practice, 11 (4), pp.111-121.

Arnolds, C.A. and Boshoff, C. (2002) ‘Compensation, esteem valence and job performance: An empirical assessment of Alderfer’s ERG theory’. Academic Journal – International Journal of Human Resource Management, 13(4):697-719 Language: English. DOI: 10.1080/09585190210125868

Rewards and Performance Management Sample Answer

High performance from the employees is the wish and target of any employer. This is because the performance of the individual employees is directly related to the performance of the organization at large (Ammons, 2015). To achieve high levels of performance from the employees, including the managers, it is vital to understand the sources of their motivation and reward accordingly. However, just like the article says, rewards should indeed be awarded based on more than just pay and money for the performance of any employee to improve.

It is true, just like the article says that the three sources of motivation for most employees include, the feeling of being relevant in the place of work, the sense of being related to the place of work and the job and the want to grow in their careers (Alfes et al., 2013). Therefore, as employers and management, it is important to put emphasis on the three points apart from just using money as the motivator. However, it should not be forgotten that money is also a key motivator, without which all the three may not work. Employees usually need to be paid well for them to be comfortable and, therefore, be motivated to work (Buckingham & Goodall, 2015).

In conclusion, the facts presented by the author in the article are true, but money should also be given emphasis as a primary motivating factor for good performance. Without adequate payment, the employees may not be motivated to perform even in the presence of good work relationship, relevance in the place of work and growth in the career (Truss et al., 2013). All the factors are important in motivating workers to perform well and, therefore, should be adequately considered for any organization to perform better.

Rewards and Performance Management Bibliography

Truss, C, Shantz, A, Soane, E, Alfes, K, & Delbridge, R 2013, ‘Employee engagement, organisational performance and individual well-being: exploring the evidence, developing the theory’, International Journal Of Human Resource Management, 24, 14, pp. 2657-2669, Business Source Complete, EBSCOhost, viewed 7 December 2015.

Alfes, K, Truss, C, Soane, E, Rees, C, & Gatenby, M 2013, ‘The Relationship Between Line Manager Behavior, Perceived HRM Practices, and Individual Performance: Examining the Mediating Role of Engagement’, Human Resource Management, 52, 6, pp. 839-859, Business Source Complete, EBSCOhost, viewed 7 December 2015.

Ammons, D 2015, ‘GETTING REAL ABOUT PERFORMANCE MANAGEMENT’, Public Management (00333611), 97, 11, pp. 8-11, Business Source Complete, EBSCOhost, viewed 7 December 2015

Buckingham, M, & Goodall, A 2015, ‘Reinventing Performance Management. (cover story)’, Harvard Business Review, 93, 4, pp. 40-50, Business Source Complete, EBSCOhost, viewed 7 December 2015.

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