Performance Management: Reward vs. Growth

2018-08-28T15:50:19+00:00June 23rd, 2017|Organisational Development|

In many organisations, performance management is approached as an annual performance review, with the main aim to determine the employee’s increase and possible bonus. As a result, the phrases “performance management” and “performance review” often conjure up feelings of dread for employees and management.

Many employees view the outcomes of performance management in black and white terms – either a reward for high levels of performance, or punishment for areas where performance was less than “great”. Ellene Pienaar-Carstens, resource manager at consulting firm Bizmod says that irrespective of the outcome, the performance review is often experienced as negative and stressful, creating feelings of apprehension and increased anxiety.

“Truly effective performance management, however, looks completely different to the once-off annual meeting described above,” says Pienaar-Carstens. “Valuable performance management is not an isolated, infrequent meeting but rather an on-going process of communication, which follows a cyclical pattern.” The content of performance management discussions should evolve based on an employee’s changing objectives and goals within the organisation and should not be limited merely to KPA’s.

“When used effectively, performance management supports the accomplishment of the strategic objectives of the organisation, and the objectives and personal growth of the employee,” says Pienaar-Carstens.

The communication process of performance management should include the following elements (as indicated in the attached diagram):
– Clarifying expectations
– Setting objectives
– Identifying goals
– Providing feedback
– Reviewing progress

Apart from the difference in process, it is important to also consider the aim of performance management. “Many organisations are moving away from the traditional purpose of performance reviews, as they are finding that employees and especially higher level employees are no longer significantly motivated by annual monetary rewards,” says Pienaar-Carstens.

During an employee’s day-to-day tasks, they rarely consider how their current activities will affect their bonus or increase. An argument can therefore be made to split bonuses and increases from an employee’s performance management process. Consideration should rather be given to rewarding outstanding behaviour, as and when it occurs. Through immediate reward, employees are more likely to be motivated to go the extra mile. Pienaar-Carstens says that the aim of performance management should then rather be to support and guide the growth of both the employee and the organisation through aligning objectives and strategies.

Pienaar-Carstens concludes, “By making the abovementioned mind-shifts, performance management then becomes a continuous, positive conversation that supports employees to become the best they can be, which in turn strengthens the organisation as a whole.”

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HR Pulse:

http://www.hrpulse.co.za/editors-pick/234986-performance-management-reward-vs-growth