Performance Management and Reward Systems

Question 1

Performance management

Answer 1

Performance management is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.

Question 2

Difference between appraisals and Performance management

Answer 2

Performance appraisal emphasizes the assessment of an employee’s strengths and weaknesses and does not include strategic business considerations. Also, performance appraisal systems usually do not include extensive and ongoing feedback that an employee can use to improve her performance in the future. Finally, performance appraisal is a once-a-year event that is often driven by the HR department, whereas performance management is a year-round way of managing business that is driven by managers.

Question 3

Advantages of a well designed Performance system From the perspective of employees (5)

Answer 3

1. increases motivation and self-esteem
2. helps improve performance
3. clarifies job tasks and duties
4. provides self-insight and development opportunities,
5. clarifies supervisors’ expectations.

Question 4

Advantages of a well designed Performance system From the perspective of managers (7)

Answer 4

1. gain insight into employees’ activities and goals,
2. allow for more fair and appropriate administrative actions
3. allow them to communicate organizational goals more clearly
4. let them differentiate good and poor performers,
5. help drive organizational change,
6. encourage voice behavior
7. improve employee engagement.

Question 5

Advantages of a well designed Performance system From the perspective of HR (7)

Answer 5

1. provides protection from litigation
2. help minimize employee misconduct which can have so many negative consequences for the organization.

Question 6

Effects of poorly designed performance management systems

Answer 6

1. employees may quit
2. those who stay may be less motivated
3. relationships (e.g., supervisor–subordinate) can suffer irreparable damage.
4. can be biased, resulting in costly law- suits and wasted time and resources.

Question 7

Reward systems

Answer 7

include all mechanisms for determining and distributing tangible and intangible returns as part of an employment relationship.

Question 8

Tangible returns

Answer 8

Tangible returns, collectively referred to as compensation, include both cash and benefits.

Question 9

Intangible returns

Answer 9

Intangible returns, also referred to as relational returns, include recognition and status, employment security, challenging work, and learn- ing opportunities.

Question 10

Purposes of Performance Management Systems

Answer 10

o Strategic Purpose
o Administrative Purpose
o Informational Purpose
o Developmental Purpose
o Organizational Maintenance Purpose
o Documentational Purpose

Question 11

Ideal PMS characteristics

Answer 11

• congruent with strategy
• congruent with context
• thorough
• practical
• meaningful
• specific
• able to identify effective and ineffective performance
  *reliable
• valid
• fair
  *inclusive
• open
• correctable
• standardized
• ethical

Question 12

Performance management provides information on

Answer 12

• who should be trained and in what areas
• which employees should be rewarded
• what type of skills are lacking at the organization or unit level.
• the type of employees that should be hired.
• pro-vide critical information that allows organizations to make sound decisions regarding their people resources.

Question 13

The way Organizational goals are achieved is influenced by

Answer 13

both organizational and societal contextual issues. A performance man- agement system in China may not be the same as a performance manage- ment system in Mexico or France. Although the system’s main objectives may be the same, the way the system is implemented and deployed must take contextual considerations into account.