Supporting Good Practice in Performance and Reward Management

Performance Management is both a strategic (about broad issues and long-term goals) and an integrated (linking various aspects of the business, people management, individuals and teams) approach to delivering successful results in organisations by improving the performance and developing the capabilities of teams and individuals.

Two main purposes of performance management are;

To help the employees in identifying the knowledge and skills required for performing the job efficiently as this would drive their focus towards performing the right task in the right way, which in turn helps work towards the business objectives as their tasks are generated and focussed around the organisations goals. Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicating the functional and organisational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching and development. The most important stage and component of any performance management process which forms the basis of performance is Appraisals.

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Appraisal systems are a formal method of monitoring and reviewing individuals’ performance. This is important as they enable the individuals to gain a clear picture of how they are doing and to identify areas where they may need additional support or training. They also ensure that the work of the individual is focussed towards the overall objectives of the organisation and whether they are on track to meet their objectives they have been set. There are three main components of performance management; Planning – This is done in form of appraisals. Performance planning is jointly done by the appraisee and also the appraiser in the beginning of a performance session. During this period, both the manager and staff decide upon the targets and the key performance areas which can be performed over the next year. * Monitoring – Regular monitoring of performance is one of the key component to performance management it is usually done in the form of informal appraisals and these should also occur though regular contact and one to ones.

It gives an opportunity to monitor the achievements of objectives for staff, keeps a check on how the individual is getting on in relation to the tasks, identifies any problems which can prevent the individual from achieving their work objectives.

Review/evaluating – Managers should be giving feedback on a regular and continuing basis. This is the stage in which the employee acquires awareness from the appraiser about the areas of improvements and also information on whether the employee is contributing the expected levels of performance or not.

The employee receives open feedback and along with this the training and development needs of the individual is also identified. The appraiser adopts all the possible steps to ensure that the employee meets the expected outcomes for an organisation through guidance, mentoring and representing the employee in training programmes which develop the competencies and improve the overall productivity. This stage also is an opportunity for strengths to be identified and how these can be utilised to support the business objectives further. Motivation and performance management

The relationship between motivation and performance management is a close one, they work along each other. Motivation is the key to an individual's degree of willingness to exert and maintain their efforts towards the organisational goals. Motivation levels are likely to have an effect on performance. If an individual has high motivation, it is likely to increase their performance. Although this may not always be the case. Here is a list of some of the things that motivate individuals;

• Money
• Reward schemes
• Sense of achievement
• The environment
• Professional Development
• Benefits Etc.

There are many motivational theories here I will explain two of them. Herzberg’s two factor theory of motivation at the workplace shows the difference between two factors of motivation. The two factors being satisfiers, which are the main causes for job satisfaction (motivation), from hygiene factors which are the main causes for job dissatisfaction (demotivation to stay in the job). Examples of motivating factors are achievement, recognition, responsibility and the work itself. Hygiene factors include: working conditions, salary, relationship with colleagues, supervision, etc.

An organisation needs to influence satisfiers through performance management using range of tools such as: job descriptions, supervision, performance appraisals, continuous development/training, rewards and career development. Maslow’s theory of motivation is called the “hierarchy of needs”. Maslow believes that people have five main needs in the following order of importance;

1. Physiological – the need to eat, drink, sleep, reproduce.
2. Safety - the need for shelter and to feel secure.
3. Love/Belonging – the need to feel part of a group and to be accepted.
4. Esteem – the need to feel good about themselves and the need to be recognised for achievements.
5. Self-actualisation – the need for personal fulfilment and the need to grow and develop.

Maslow's hierarchic theory is represented as a pyramid, with the lower levels representing the more fundamental needs, and the upper levels representing the growth/being needs, and ultimately the need for self-actualisation. According to the theory, the higher needs in the hierarchy become evident only after all the needs that are lower down in the pyramid are met. Rewards

Most organisations use rewards within their performance management system to motivate individuals. Two main purposes they do this are; * To help attract individuals – The better rewards that the organisation gives the more people are going to be attracted to work for them so more people will apply for jobs there. * Retain the individuals – Rewards for good performance is motivation for staff to stay with the organisation it helps make them feel valued in turn makes them work harder. Rewards are not just financial but non-financial too. Rewards can be things such as;

Pay rise/ bonus.

Some bonuses are based on performance of an individual, the team or the organisation and is usually target / objective focused.

Recognition. This could be through increased responsibility, praise during one to ones, a certificate of recognition, etc.

Flexible hours and time off – This could be a generous holiday period or increased holiday to reward employees for long service. Also some organisations use flexible working as a reward. Data needed for managing performance All materials need to be prepared for managing performance (appraisal meetings) these would include internal and external data, although most are internal.

An internal piece of data for example would be if it was a sales organisation they would bring along the report for the percentage of sales the individual has made and this would be compared to the targets set. The comparison would show how well individual has done to meet these this would then be discussed in the next stage. Other examples would include notes agreed tasks and records of performance, achievements, incidents, reports, previous performance appraisal documents and a current job description.

An example of an external piece of data would be benchmarking, where the manager would collect data from other organisations to analyse and compare the sales the individual has made, this would show how the employee's participation is developing not only themselves, but also the constitution as a whole, compared to the other organisations, earlier collected data from. Another example would be feedback from external customers or other organisations. Managing Performance The key aims of performance management are to continuously improve the performance of individuals and that of the organisation.

It involves making sure that the performance of employees contributes to the goals of their teams and the business as a whole. Part of the management is to review the individuals performance whether it be good or poor performance. The aims of the meetings for performance management are to encourage and motivate not to undermine. Factors to be considered whilst managing good performance would be reward for the individuals’ performance, how to keep the individual motivated to keep up the good work and any training needs to help develop further.

Factors to consider whilst managing poor performance would be thinking about how to deal with discussing the performance as these can be difficult conversations for managers, thinking about why the performance is poor and thinking about how to improve the individuals’ performance, what measures can be put in place and how this can monitored. Most organisations have their performance reviews at once a year in the form of appraisals and have 6 month reviews. Although managers should keep their staff informed of their performance and giving feedback throughout the whole year.

This can be done through one to one’s or regular meetings. The purposes of the performance reviews are * to check how the team member is getting on in relation to the tasks and objectives agreed, * to identify any problems which may be preventing the individual from achieving their work objectives, * to highlight opportunities for improving work processes, * to build confidence and self-esteem within the individual * to plan future work, set tasks and agree objectives * to agree ways to support the individual in the future, * to discuss the individuals feedback and how they feel about their job.

The process of appraisals Appraisal systems vary in different organisations, some have standardised procedures, some have few guidelines and leave it to the manager to plan and implement. There are three main stages of an appraisal preparation, the meeting and the follow up. * Preparation – Both the manager and the individual need to prepare for the appraisal by reviewing the individuals performance including the overall performance, the quality of the work and checking if targets have been met. * The meeting – The manager needs to make sure that a suitable venue is planned and available, private and free from interruptions.

Within the meeting the manager needs to set the tone which will influence whether the discussion is helpful to both manager and individual they need to make sure that the individual is relaxed. Then both the manager and individual going through the appraisal document discuss

• Performance and identify areas of good performance and the weaker investigate the reasons for the weakness and highlight the areas for improvement clarifying, defining, redefining priorities and objectives making sure that they are specific to the organisations objectives
•  motivation through agreeing helpful aims and targets motivation though achievement and feedback
• training needs and learning desires - assessment and agreement
• identification of personal strengths
• career and succession planning - personal and organisational
• team roles clarification and team building
• organisational training needs assessment and analysis
• the individual and managers mutual awareness, understanding and relationship
• reinforcing organisational philosophies, values, aims, strategies, priorities
• additional responsibilities, employee growth and development
• counselling and feedback
• manager development

The follow up is the review by the manager where they need to complete the documentation by writing up what had been discussed. Making sure that the write up is agreed and signed by the individual. Managers need to keep continuous monitoring and evaluation on the individual throughout the year and ideally hold a review within that time. Activity 2 The hopeful outcome of the meeting was to discuss with the individual their performance over the last six months, including what went well and what hadn’t gone so well. Why things had gone well or not so well and if there was anything to improve performance or training needs.

The outcomes of the appraisal with Hannah were that over the last six months as the manager I felt that Hannah has been doing well and providing a good service. Her only downfall is that sales have gone down but this was due to Hannah having a month off work with a broken leg. This was discussed within the meeting using the Appraisal form and was met with targets to be achieved. The appraisal form used was effective as it covers all areas of performance including how the individual felt about the previous six months it also covers how the manager felt they performed.

It discusses what they have enjoyed most and least, quality of their work, management of workload, targets and identifies if any training is needed. These things covered are important as it lets both the manager and individual know how the individual is doing within the organisation and whether they need any further development or training. This is a motivator to the individual as they can gain job satisfaction that they are going in the right direction and helping towards the overall aim and objectives of the organisation.

This appraisal system could be improved by having more input from the individual so they can have their say on what they have done and how they feel they have done which maybe the manager has not recognised. This would help the individual to feel they receive the recognition they deserve for the work they have input. SMART (specific, measurable, achievable, realistic and timely) should be incorporated to the form as the targets need to be SMART otherwise it would be unfair for the individual to set unattainable targets to meet as they won’t meet them which will affect their performance reviews.

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