Performance Management Plan and the Rewards Plan
Performance management is a continuous plan of measuring, recognizing, and increasing performance in an organization by connecting the individual performance of employees and objectives to the organization’s goals and mission (Aguinis, 2012). During my internship program, I worked for an organization with a great performance management system. The organization’s performance management plan included a set of performance expectations that each employee was expected to meet, key performance indicators, and performance reviews. Performance reviews were conducted monthly using 360-degree feedback and management by objective. 360-degree feedback included customer reviews and reviews from department heads, supervisors, and colleagues. Employees were required to fill out a performance review to rate the performance of one colleague within their department by commenting on different specified areas. The reviews were submitted to the human resource management department within a specific timeline. Management by objectives included reviewing employees’ performance based on the organization’s goals. The human resource management department sets the key performance indicators to determine whether an employee’s performance is satisfactory.
The organization’s rewards plan included both monetary and non-monetary rewards. One of the financial rewards was pay raises. The organization increased the pay for employees who exceeded performance expectations to motivate them and encourage colleagues to work harder. Pay raises were calculated based on the performance level and an employee’s rank within the organization. The second monetary reward was bonuses. Employees who met and exceeded the organization’s performance expectations were awarded Christmas bonuses and additional bonuses computed based on performance levels at the end of the year. The bonuses were awarded on the last day of the year. Employees who failed to meet expectations were only eligible for Christmas bonuses that were awarded based on the time the employee had worked for the organization. The main non-monetary reward used in the organization was health insurance for the employee, their spouse, and children. The organization also offered paid leave after sending an application to the human resource department.
Elements of the Plan That Were the Most Motivating
Reward and recognition are among the most important elements of the organization’s performance management plan. According to Maslow’s theory, motivation is influenced by safety, psychological, social, self-actualization, and esteem needs (Navy, 2020). Rewards and recognition make employees feel valued, thus enabling them to meet self-esteem and psychological, social, and self-actualization needs. For example, employees who received the rewards and were recognized for their performance were committed to their work and determined to reach their full potential. They also developed a sense of belonging, creating a positive attitude towards the organization and their work. Reward and recognition also made employees feel respected by the organization and admired by colleagues, thus motivating them to maintain high performance. The second element was performance expectations. The performance expectations set by the organization gave employees a sense of direction, thus encouraging them to work towards meeting the expectations to get rewarded. Knowing what the organization expected from employees was also vital in increasing job security by ensuring performance was within the required levels.
A shared sense of direction also enabled employees to work together by forming teams to complete assigned tasks faster and exchange ideas, thus creating a friendly work environment that facilitated friendships. The third important element was employee engagement in the performance management plan through peer reviews. Allowing employees to participate in performance reviews by reviewing their peers’ performance encouraged fairness, thus enabling the organization to meet employees’ psychological needs because they felt that there was fairness in the performance review process. Peer reviews also facilitated the development of a sense of belonging because employees felt that the organization involved them in one of the most important processes that create the foundation for the overall organizational performance.
Improving the Effectiveness of Performance Management and How the Rewards Plan Can Reinforce the Objective of the Performance Management Plan
One of the measures that can be taken to improve the effectiveness of the performance management plan in the organization is using a balanced scorecard to control and monitor the activities of employees and measure how they impact the organization. According to O’Boyle (2011), a balanced scorecard enhances the effectiveness of performance management by combining the non-financial and financial aspects of the organization to offer a comprehensive view of its performance within its environment. A balanced scorecard also considers an organization’s vision and strategy when evaluating employee performance, thus enabling the organization to achieve the required performance levels.
The effectiveness of the performance management plan can also be enhanced by aligning performance goals to employees’ roles within the organization. This will help create fairness in performance reviews by considering factors such as the challenges an employee overcomes to meet the goals. Another measure that can be taken to increase the effectiveness of performance management is evaluating employee competencies to ensure that every employee has the skills and capabilities needed to complete assigned tasks to prevent poor performance linked to a lack of competency. The rewards plan can reinforce the objective of the performance management plan by defining achievement expectations among employees based on the performance rewarded and recognized in the organization.
References
Aguinis, H. (2012). Performance Management. Prentice Hall.
Navy, S. L. (2020). Theory of human motivation—Abraham Maslow. Springer Texts in Education, 17-28. https://doi.org/10.1007/978-3-030-43620-9_2
O’Boyle, I. (2011). Performance Management and the Balanced Scorecard in the Modern Non-profit Organisation. Corporate Board: Role, Duties & Composition, 7(1). https://www.researchgate.net/publication/311579898_Performance_management_and_the_balanced_scorecard_in_the_modern_non-profit_organisation
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Question 
Instructions
Based on personal experience in this area, evaluate how well motivation, rewards, and performance management were aligned. Did the rewards strategy reinforce performance expectations? In your response, address the following:
Performance Management Plan and the Rewards Plan
1. Describe the performance management plan and the rewards plan. (If you have not been part of a recognition plan personally, interview someone you know who has and describe their experience.)
2. What elements of the plan were the most motivating? (Reference motivation theory to support your observation.)
3. Create up to three suggestions for improving the effectiveness of performance management and how the rewards plan can reinforce the objective of the performance management plan. Cite sources that support your suggestions. You should cite course readings or find additional supportive research for your suggestions.
Sources: Miller, S. (2018, May 31). How can total rewards drive performance management success? SHRM. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/total-rewards-can-drive-performance-management.aspx
Agarwal, D., Bersin, J., Lahiri, G., Schwartz, J., & Volini, E.. (2018). The rise of the social enterprise: 2018 Deloitte global human capital trends (pp. 33-46). https://www2.deloitte.com/content/dam/insights/us/articles/HCTrends2018/2018-HCtrends_Rise-of-the-social-enterprise.