Lesson 3: Performance Management and Rewards

Performance Management
- Procedures and systems designed to improve employee outputs and performance, often
through the use of economic incentive systems.
- Apart from economic incentive, the other means used to improve employee
performance are:
1. Goal Setting
2. Streamlined Organizational Structure
3. Better Technology
4. New Arrangements of Working Schedule
5. High Involvement of Employees
6. Better Motivation of Employees

- An effective performance management process considers human resource (HR) strategic

planning as a basic requirement.
- HR Strategic Planning is the process of providing capable and motivated people to carry
out the organization’s mission and strategy.
- Key Element of HR Strategic Planning is the Staffing Function which implements the
provision of qualified people to the identifies job openings.

Staffing
- HR planning, acquisition, and development aimed at providing the talent necessary for
organizational success.
Staffing Process:
a. Job Analysis
- The process of staffing starts with an understanding of the positions or
jobs for which individuals are needed in the organization.
- A technical procedure used to define the duties, responsibilities, and
accountabilities of a job.
Useful in:
1. Preparing Job Descriptions
2. Evaluating and Classifying Jobs
3. Training and Career Development
4. Performance Appraisal
5. Other HR Aspects

b. Recruitment
- The drawing of people to apply for the various positions identified.
- May be defined as a human resources management practice designed
to locate and attract job application for particular positions.
Involves:
1. Advertisement of a Position Vacancy
2. Preliminary Contact with Potential Job Candidates
 3. Preliminary Screening to Obtain a Pool of Candidates
Types:
1. Internal – process of attracting job applicants from those
currently working for the firm.
2. External – process of attracting job applicants from outside the
organization.

c. Selection
- This involves assessing and choosing among job candidates.
Involves:
1. Completing the Application Form
2. Conducting an Interview
3. Completing any Necessary Tests
4. Background Investigation
5. Physical and Medical Examination
6. Decision to Hire or Not

d. Socialization
- The final step, involves orienting new employees to the organization
and its work units, especially the work units where the newly hired
employees will be working.
Provided with Information:
1. Key Organization Factors which includes:
 Overview of the Organization,
 Policies and Procedures,
 Compensation,
 Benefits and
 Economic Factors.
2. Department and Job-related Issues including:
 Department Functions,
 Job Duties and Responsibilities,
 Policies,
 Rules,
 Procedures and
 Socialization into the Work Group.

Training and Career Planning and Development

Training
- The process of changing employee behavior, attitudes, or opinions through some
type of guided experience.
- Training the individual employee occurs not only initially but anytime improved skills
are needed to meet changing job requirements.
Ways in Conducting Training Programs (Classification):
a. On the Job Training (OJT)
  training method is conducted while employees perform job-related tasks.
It is the most direct approach to training.
Common Forms:
1. Internship
- opportunities for students to gain real world experience.
2. Apprenticeships
- learning a trade from an experienced worker.
3. Job Rotation
- provides a broad range of experience in different kind of job in an
organization.
b. Off the Job Training
 deals with work skills in settings away from their ordinary workplace.
Techniques:
1. Classroom Lectures
- designed to communicate specific interpersonal, technical or
problem solving.
2. Simulation Exercises
- occurs by actually performing the work.
3. Vestibule Training
- done on actual equipment used on the job.
4. Programmed Instruction
- training materials are condensed into highly organized, logical
sequences.

Career Planning and Development

Career
- The pattern of work-related experiences that span the course of a person’s life.

Career Stages
- The distinct stages that individuals go through in their careers, typically including:
1. Establishment Stage
- apprenticeship where the young employees enter an organization who
may be technically able but often without understanding of the
organization demands ad expectation.
2. Advancement Stage
- calls for the employee to work as an independent contributor of ideas in a
chosen area.
3. Maintained/Maintenance Stage
- employee may experience continued growth of performance and
accomplishments, or may be encountered career stability.
4. Retirement Stage
- formal preparation for retirement is made wherein the individual learns
to accept a reduced role and less responsibility.
Performance Appraisal
- A key aspect of performance management.
- The process of evaluating the performance of employees, sharing the information with
them, and searching for ways to improve their performance.
Functions of Performance Appraisal:
1. Give Employees Feedback on Performance
2. Identify the Employee’s Development Needs
3. Make Promotion and Reward Decisions
4. Make Demotion and Termination Decisions
5. Develop Information about the Organization’s Selection and Placement Decisions

Criteria for Performance Appraisal

1. Individual Task Outcomes
- evaluating the employee’s task outcomes.
2. Behavior
- instances when it is difficult to measure an individual’s task outcomes. Advisory
jobs or support positions and those who are assigned to work in a group.
3. Traits
- many organizations use traits as criteria in appraising employee performance.
- it is commonly used as basis for performance appraisal, like:
a. Good Attitude
b. Showing Confidence
c. Being Dependable
d. Looking Busy
e. Possessing a Wealth of Experience

Rewards
- The final requirement is necessary to ensure effective performance.
- The requirement refers to the design and implementation of reward systems.

Types of Organizational Incentives:

1. Intrinsic or Extrinsic Rewards
a. Intrinsic Rewards – the worker receives from the job itself, such as pride in
one’s work, a feeling of accomplishment, or being part of the team.
b. Extrinsic Rewards – the workers get from the employer, usually money, a
promotion, or benefits.
2. Financial or Nonfinancial Rewards
a. Financial Rewards – enhance an employee’s financial well-being directly
through wages, bonuses, profit sharing, and the like.
b. Nonfinancial Rewards – indirect enhancement of an employee’s financial well-
being.
3. Performance-Based or Membership-Based Rewards
a. Performance-Based – given using performance as basis.
b. Membership-Based – given to all employees regardless of performance.