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Performance management means measuring criteria for organizational progress helping to accomplish their set target and goals by taking suitable actions for the improvement of the company. Performance management system aims to achieve the following target:

Enabling each employee to know what is actually been needed and what should be his role in achieving those targets.

It helps to maintain an honest relationship between the employees.

Enabling each individual employee to feel motivate at work and make him know about his valued contribution in the project.

Enabling organization to reward the employees for his exceptional contribution to the company.

Performance management system is being designed to successfully achieve the set objective as well as it also focus on helping the employees to understand what is being needed from them and how they could deliver it to the company.

Three components of performance management system

Initially setting up the required aim which is needed to be target and making the employees to clearly know what should be their contribution towards achieving the required target.

Distinguishing between the areas where the performance is strong and the area where there is a need for improvement therefore suggesting ways to improve the service delivery action.

Rewarding the employee with the best performance outcome.

Relation between motivation and performance management

Motivation refers to strengthening of internal activities which drives or boost the performance of man. There is a direct relationship between performances to motivation; if an employee is highly motivated then he/she is expected to perform better at job. Theories suggesting the following implementations are:

Reinforcement theory of motivation – this theory describes the effect of present behavior onto its future consequences, focusing on changing the employee behavior according to the surrounding situation through four types of operational conditioning:

Positive reinforcement

Motivating employees by the means by increasing wages, giving him bonus or either promoting him, all this reinforcement is being provided as a reward to the employee to repeat the desired behavior adapted by the employee at the workforce.

Negative reinforcement

Strengthening the employee behavior and raise it up the baseline attempt like avoidance or ignorance if the employee is not been working as he/she should be working.


It is like not providing the employee neither with the positive reinforcement and nor with the negative reinforcement, if an employee is working then also he is not getting a thanks or a reward for his work.


It is for decreasing the continuity of behavior which the employee is being following at the workplace.

The reinforcement theory on the management side:

Managers should be informing the employee about the things which they are doing wrong and shouldn’t be repeated while directing them to the way which could help them to receive positive reinforcement.

Managers should also understand it is important to reward employees for their performance because if the deserving candidate is not getting the reward then he/she may not be performing to the level previously used to.

Equity theory of motivation – supposing two employees worked equally at office but an employee A gets 20% percent increment while employee B gets 10 percent increment. Employee B is pleased with his performance because where other employees are getting only 6 % increment he got 10% but while comparing to A he will be rather disappointed therefore people compare their reward to the ratio of the reward what the other person is getting to the input applied.

Therefore in such a case managers must be very careful while they are rewarding and provide each employee with a specified target to motivate them and even this removes the indifference attitude within the employees about others. (analytictech website)

Four factors that need to be considered when managing performance

It is very crucial to review employee’s performance level which includes their behavior they should be exhibiting in the company.Factors that are needed to take in consideration when managing performance are:


It means setting up the performance goal and expectation which is required to be followed by the employees in line to achieve the set target, involving employees in the planning action to make them understand what the organization is targeting and what should be their contribution in the achieving the target.


Projects and assignment are monitored continuously for consistently measuring the performance and then giving them with feedback about their actions which is needed by them to follow for achieving the target, this regularly checking method helps to meet the determined standard as pert the organization requirement.


Developing in the terms means increasing the performance capacity through giving them assignment, regular training session which helps the employees to introduce new skills and perform well.


Rewarding employees for their talent and contribution to the company procedure result in better effect on to the company performance. (US office for personnel management )

The relationship between performance management and reward

Two purposes of reward within a performance management system

In any organization the main purpose behind rewarding employees is to motivate them, retaining them to the company and reducing the turnover costing. Employees are the most important valuable possession of the company and it is very important to continuously encourage them for their contribution to the organization. These reward systems are mainly been introduced into the company’s environment to give a recognition and encouragement to the committed employee of the company for his extraordinary performance in the company by this Staffs understand what they are expected to do.

Contribute to effective performance and reward management in the workplace

Components of a total reward system

Rewarding system is being used as a tool by company owners to attract the talent they have been looking for their company and to retain the talent with company and from seeing the employees perspective rewards are the payback for their commitment and loyalty towards the company.

Components of rewarding system are:

Individual growth

It includes with investing in people, learning opportunities through training programs and career opportunities through new job openings, promoting or handling oversees assignment project.

Compelling future

It is very critical component of the rewarding system including company’s growth and success, its reputation and image in the market and in front of the employees, stakeholders, company’s vision and values.

Positive workplace

This category includes leadership, commitment and thrust towards the company, working attitude towards his colleges and outside people, his communication inside the company and involvement of the employee.

Total pay

This category includes the performance criteria, recognizing the employee talent and giving him base pay, variable pay according to his work, providing the employee with additional benefits and pay for his performance in the company. This recognition gives a special entity of the employee in front of his colleges for his actions and performance in the task given to him. (schuster zingheim , 2012)

Sources of data (1 of which should be external to the organisation) required by individuals involved in performance and reward management processes.

Gathering performance information through quantity or sources helps to ensures that the objective is in line with the ongoing employee’s behavior and company is performing well. Types of information included are employees call record, sales report or the project deadline report while important information sources include getting feedback through others, personally observing the employee, and reviews on the employees. Getting data from feedback process involves with asking all the subordinate employees, manager about the employee any specified skill and while comparing that data to the final report submitted and based upon that judging the performance and rewarding process.

Other data sources which are helpful in determining the performance chart are: past performance report, what are the current objectives of the organization and a standard documentation relating to the career goal.

To be able to conduct and reflect upon a performance review and How to support good practice in performance and reward management

Frequency, purpose and process of performance reviews

Considering performance management review system for an oil spill company, there is an annual cycle system which combines together with the budgeting process and business planning process. It is a three stage process beginning annually in the month of January and ending in the same over a year cycle.

Stage one:

It is the initial phase starting in the month if January consisting of planning of work agreement, setting up occupational standard, meeting to the required competencies and assigning of the personal development planning in line with the organizational aim.

Stage two:

This second phase is being carried out throughout the financial year going in a form of regular ongoing process aiming at keeping the information and work agreement data up to date according to the changing environment in which the company is being operating. Regular meetings are put up to discuss on the progress setup of the company.

Stage three:

At the year ending each individual performance is being reviewed, judging their performance level and comparing the performance to the required level of performance needed for the task to get complete.

Once the year get started it is mandatory to run all the three stages serially.

Appropriate interviewing skills in order to gauge performance

An interview describes the employee’s intake to the company which can also be taken as a place to measure the performance level of the employee whom the company is planning to take in. Here are some of the questions which demonstrate the performance level of the employee:

what skills and special characteristics are up planning to bring in with the job

Describe what are your duties and responsibility while performing a task at workforce.

from previous event describe your creative work

describe situation which describes you can work in a team

describe what would be your action in time going through intense pressure and stress

Are you prepared to make personal sacrifice for the sake of work related purpose.

Effective use of feedback

Timely and effective feedback managing system is essential and an important aspect for guarantying successful performance management, giving employees with proper feedback helps to improve their performance level and to timely correct themselves whenever they are falling apart from the required target, feedback helps to motivate them in the right sense to follow the proper path.

SMART objectives for developmental purposes

Following specific objectives are set to determine development

Specifically or exactly illustrating what specific action needed to be followed.

Measuring the performance to evaluate are the activities going in line with the determined objective.

The set objective must be achievable with the required resources.

Relating whether the set objective target is required to get the desired goal.

Setting the time limit in which the given objective must be accomplished.