Managing and Leading People in High Performance Organisations

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CHAPTER 7 Performance Management, Motivation
and Reward
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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

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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)

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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

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Corporate strategy Strategic goals
Linking HR and performance management
Organisational objectives
Organisational performance
Performance gap
Measuring, assessing and monitoring
performance (including feedback and appraisal)
Supportive HR policies and procedures
Individual objectives
Individual performance
Desired outcomes
Actual outcomes
HR supporting mechanisms Eg development and
training, continuing professional
development, personal development planning,
career planning, recognition and reward
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Performance management, motivation and reward
motivation
Performance management
job satisfaction
performance
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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)

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What shapes motivation?

• Four basic emotional needs or drives to
• Acquire (through reward system)
• Bond (through culture)
• Comprehend (through job design)
• Defend (through fairness of work
  assessment)
• (Source Nohria, 2008 p.82)

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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

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Factors affecting performance

• Personal/individual characteristics
• Job-related factors
• The performance management system
• Organisational factors
• Extra-organisational factors

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Uses of performance management data

• To demonstrate an organisations 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)

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Techniques to improve performance

• Learning
• Development
• Training
• Coaching, mentoring
• Team-building
• Culture-change programmes
• Reward schemes
• Structure, process, systems, job-redesign, etc
• Management approach

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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 387402.
• Nohria,N., Groysberg, B. and Lee, L.-E. (2008)
  Employee motivation a powerful new model,
  Harvard Business Review, July-August.