CHAPTER 7
Performance Management, Motivation
and Reward
Performance management, motivation
and reward
• Different ways that performance management
(PM) can be defined and interpreted
• Assumptions that underpin the application of
performance management
• The contribution of differing theories in the
development of PM
• The relationship between performance,
motivation and reward
• Evaluating how PM improves organisational
effectiveness and efficiency
Definitions of performance
management
• ‘The outcomes of work because they provide the
strongest linkage to the strategic goals of the
organisation, customer satisfaction, and
economic contributions’ (Bernadin, 1995)
• ‘Performance means both behaviours and results.
Behaviours emanate from the performer and
transform performance from abstraction to
action. Not just the instruments for results,
behaviours are also outcomes in their own right –
the product of mental and physical effort applied
to tasks – and can be judged from the results’
(Brumbach, 1988)
Perspectives on performance
management
• Controlling performance – managerial perspective
• The Eternal Triangle – organisational theory,
industrial engineering and behavioural science
• Aligning individual and organisational needs – fit
person to job or fit job to person
• Stakeholder benefit – shareholders’, customers’,
employees’ views
Linking HR and
performance
management
Corporate
strategy
Strategic goals
Group/team
objectives
Supportive
HR policies
and procedures
Individual
objectives
Organisational
performance
Performance gap
Organisational
objectives
Group/team
performance
Measuring, assessing
and monitoring
performance
(including feedback
and appraisal)
Individual
performance
Actual outcomes
Desired outcomes
HR supporting mechanisms:
Eg development and training, continuing professional development,
personal development planning, career planning, recognition and reward
Performance management, motivation
and reward
motivation
Performance
management
job satisfaction
performance
Performance management, motivation
and reward
Assumptions:
• Motivation leads/can lead to increased
performance (content and process theories)
• Job satisfaction does not/may not lead to
increased performance (process theories)
• Rewards may or may not lead to increased
motivation (and increased performance)
• Rewards may or may not lead to increased job
satisfaction (and increased performance)
What shapes motivation?
• Four basic emotional needs or drives – to:
Acquire
Bond
Comprehend
Defend
(through reward system)
(through culture)
(through job design)
(through fairness of work
assessment)
(Source: Nohria, 2008; p.82)
Performance appraisal
Two major approaches:
Results-oriented (outputs)
Based upon setting quantifiable, achievable and time-bound
objectives, between manager and subordinate
Competence-oriented (inputs)
Based upon the demonstration of key skills and behaviours
associated with high performance
Factors affecting performance
•
•
•
•
•
Personal/individual characteristics
Job-related factors
The performance management system
Organisational factors
Extra-organisational factors
Uses of performance management
data
• To demonstrate an organisation’s ability to raise
competence levels
• To assess how long it takes for a new employee to
reach optimum performance
• To provide feedback on development
programmes
• To demonstrate the success of internal
recruitment programmes
• To indicate how successful an organisation is at
achieving its objectives
• To track skills levels and movement in skills gaps
(Source: Armstrong and Baron, 2007; p.111)
Techniques to improve performance
•
•
•
•
•
•
•
•
•
Learning
Development
Training
Coaching, mentoring
Team-building
Culture-change programmes
Reward schemes
Structure, process, systems, job-redesign, etc
Management approach
References
•
Armstrong, M. and Baron, A. (2007) Human Capital Management: Achieving added
value through people. London: Kogan Page.
•
Bernadin, H. K., Kane, J. S. and Ross, S. (1995) ‘Performance appraisal design,
development and implementation’, in Ferris, G. R., Rosen, S. D. and Barnum, D. J.
(eds) Handbook of Human Resource Management. Cambridge, MA: Blackwell.
•
Brumbach, G. B. (1988) ‘Some ideas, issues and predictions about performance
management’, Public Personnel Management, Winter: 387–402.
•
Nohria,N., Groysberg, B. and Lee, L.-E. (2008) ‘Employee motivation: a powerful
new model’, Harvard Business Review, July-August.