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3.6 Employee Performance Management & Rewards - Coggle Diagram
3.6
Employee Performance Management & Rewards
Performance appraisal vs. performance management
Performance appraisal
is a formalised process of reviewing employees’ performance
Aguinis et al. (2011) state that appraisal systems are often used only as a formal exercise and are rather ineffective in improving future performance.
performance management
performance management incorporate performance appraisal
Aguinis and Pierce (2008, p.139) define it as: “a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organisation.”
It is about achieving long-term sustainable performance.
Performance management system
characteristics and stages
a top-down link between business and individual objectives
driven and owned by line managers (not by the HR function)
performance and development plans, support and ongoing review are considered and documented on a constant/regular basis (not at the (semi)annual level only)
performance is rewarded and reinforced, however the efforts in linking performance management to reward have decreased in popularity in recent years.
work-related goals have to follow the ‘SMART’ logic in order to be motivating and to be incorporated into the performance management system
performance management Cycle
Planning Performance
Individual Objectives
Development Plans
Delivering and Monitoring
Ongoing Manager Support
Ongoing Review
Definition of Business Role
Job Description
Objectives of department or group/team
Formal Assessment and Reward
Annual Assessment
Link to Pay
Does performance management improve performance?
The three most common reasons for not having an effective appraisal system have been listed by Longenecker (1997) as:
unclear performance criteria
a poor working relationship with the boss
the appraiser lacking information of the employee’s actual performance.
How should feedback work?
One of the much-proclaimed newer forms of feedback is 360-degree feedback.
The Feedback Fallacy Article:
The Source of Truth
Humans evaluations are deeply colored by their understanding of what they are rating others on
"the idiosyncratic rater effect"
research shows that feedback is more distortion than truth
Humans are unreliable raters of other humans
Our feedback to others is more us than them, which lead to systematic errors
How We Learn
Our brain respond to critical feedback as a threat and narrows its activity.
Focusing people on their shortcoming does not enable learning, it impairs it
According to brain science, people grow most in areas where they are already strongest
Getting attention to our strengths from others enforces learning but attention to weaknesses smothers it
Learning happens when we see how we might do something better by adding new nuance or expansion to our own understanding.
Excellence
Excellence is idiosyncratic and there is no model to teach it
How to Help People Excel
Look for Outcomes and point at it
Replay your instinctive reactions
Never lose sight of your highest-priority interrupt
Explore the present, past, and future.
Feedback is only good for correcting mistakes but not to improve performance and achieve excellence
Elements of payment
Basic Rate 'fixed'
Variables:
Plussage
This addition to the basic rate is usually used to recognise specific working conditions.
Benefits
Extras that have a monetary value, such as a company car, meals, childcare vouchers, or private health insurance.
Premia
Typically a compensation for inconvenience, for example occasional or regular third shift work. The phrase premium is also used for an incentive type of payment related to exceptionally good performance.
Overtime
Incentive
Bonus