Performance Management in Business

A description of two purposes of performance management and their relationships to business objective

Performance management aims at improving the staff or the individuals’ performances and obtaining of feedback from both the customers and the staff. Enhancing high performance and obtaining feedback enables the employees to achieve their objectives since they are able to enhance maximum productivity. Feedback also enables the management to recognize loopholes and fix them for purposes of maximum productivity (Williams 159).

One purpose of performance management is to enable the employees to identify the required skills and knowledge that are essential in enhancing efficient job performance (Williams 159). Gaining the right knowledge and expertise allows employees to perform their duties efficiently and with zeal. Adopting the culture of high performance by both the individuals and teams that are working jointly on improving and upgrading the business is usually the primary objective of management. Employee productivity is an important aspect of the modern organization especially in the advent of globalization.

The purpose of performance management is ensuring that there is a two-way communication between employees and the management. Communication between the two parties enhances clarification of role and responsibilities among the employees. Consequently, improving communication of organizational goals and expectations promotes transparency and feedback from the employees and the customers (Basili 177). High standards of performance favor both the employees and the organization and this boosts the performance of the management team and the employees since everything is put in perspective and issues are solved amicably. In addition, communication improves the outlook of an organization to the outside world.

An explanation of three components of performance management processes

Performance planning is very crucial in enhancing in performance management process. Production planning is the backbone of performance assessment. At the beginning of every performance session, performance planning is done by both the reviewer and the appraiser. Employees are given the mandate to decide on the performance areas that are vital in attaining the targets, which are tabled over the year according to the performance budget that is set. Agreement between the employee and the reporting officer is another component that promotes the finalization of the production budget (Poister 43).

Another component of return management process is performance appraisal and reviewing. The interviewee and the reviewer also conduct this process. Appraisal and reviewing are usually done at the end of each financial year for every business, and they are performed twice in the form of annual and mid-year reviews. The appraiser offers ratings in the self-appraisal forms, which defines the achievements of the evaluated employee. The reviewing process requires the attention of both the interviewee and the worker to identify the loopholes and finding the possible solutions for solving them.

Rewarding of good performance is another component that is vital to performance management. Awarding the employee publicly motivates the employees to work even harder in accomplishing the objectives of the business since it shows them that their efforts are recognized. Rewarding increases the self-esteem of the employee and improves on the achievement. In the case of any failures, it helps the employee cope with them successfully.

An explanation of the relationship between motivation and performance management, referring to two motivational theories

In every business, high performance is always a critical issue for all managers and leaders. For instance, great organizational and employee performance conditions should be set to motivate employees to work towards the organization’s goals. Motivation can be either intrinsic or extrinsic. Intrinsic motivation is always generated by a member of staff while extrinsic motivation is offered by the organization by giving bonuses, increasing of salary, being acknowledged publicly, promotions and providing awards.

The content motivation theory explains the needs that motivate employees to perform better and the needs should be satisfied (Armstrong 56). According to Maslow’s Hierarchy of needs, good employee performance may be motivated by the fact that their lowest levels of needs are satisfied first for them to engage their higher levels. The minimum level of demand must be their primary needs, which are food, shelter, and clothing. Once these basic needs are satisfied they meet the employees’ higher-level needs, which can lead to self-actualization (Hosie 281).

Instrumentality theory shows how rewards and punishments drive motivation (Armstrong 55). Awarding of compensation to the employee who has performed best motivates the others to improve their skills and work to their highest standards for them to be appreciated; this motivates and enhances the performance-levels of both the employees and their respective organizations. Punishments such as withdrawal of some privileges drive the employee work to gain back the privileges, and it improves employee performance and attainment of the organization’s goal (Hosie 282).

An explanation of the purposes of reward within a performance management process

The offering of rewards to the employees enhances staff loyalty t because the organization is recognizing their efforts in achieving the set company’s goal and objectives. Rewards also enhance career development since they will ensure that workers acquire the right skills and more skills that will be of benefit to them and the company at large. Staff will always purpose to attend training and seminars to acquire more knowledge. Performance management process enables organizations to identify the challenges that the employees face. Therefore, companies work to improve the environment of their workstation and offer an atmosphere that is conducive for maximum productivity (Armstrong 51).

A review of three components of a total reward system, one of which should be non-financial

Compensation is an element of a reward system whereby the employee is added cash on top of their regular basic salary (Armstrong 13). An addition of money motivates employees and enhances good performance. If the employee attains a certain pay level, rewards are offered. Rewards can either be short term or long term whereby short-term is achieved after a very brief period, which is less than twelve months while the long-term rewards are piled up. For example, the long-term reward might be offered in terms of bonuses.

Benefits attract highly qualified employees who will always enhance the objectives of the company. The benefits might include leave of sickness or absence, vacation packages, and leave of bereavement (Aguinis 23). A healthy working environment is also a component of benefits since it should provide a good balance between personal and work time. Work balance also gives the employees the time for doing their activities as well as having an ample time when reporting to work. The business organizations should provide an atmosphere that solves the needs of the employee, and provide good morale (Armstrong 100).

Works Cited

Aguinis, Herman. Performance Management, Upper Saddle River, NJ: Pearson Prentice Hall, 2009. Print.

Armstrong, Michael. Armstrong’s Handbook of Reward Management Practice: Improving Performance Through Reward, London: Kogan Page, 2012. Print

Basili, Victor. Aligning Organizations Through Measurement: The Gqm+ Strategies Approach, Upper Saddle River, NJ: Pearson Prentice Hall, 2014. Print.

Hosie, Peter. Happy-performing Managers: The Impact of Affective Wellbeing and Intrinsic, New York, NY: Prentice Hall, 2006. Print.

Poister, Theodore. Managing and Measuring Performance in Public and Nonprofit Organizations: An Integrated Approach, New York, NY: Prentice Hall, 2015. Print.

Williams, Richard S. Managing Employee Performance: Design and Implementation in Organizations, London: Thomson Learning, 2001. Print.