Reward and Performance Management Practice - Example

Reward and Performance Management Practice By: Professor: Class: University: City: State: Date of submission: Reward and Performance Management Practice Introduction In the modern business environment, institutions tend to function in a dynamic, viable, and competitive manner to meet the dynamic demand of the customers. To ensure sustainability in the market, businesses have to respond quickly to the changing tastes, preferences, and demands of the customers to remain relevant in the market. To be successful, business entities have to achieve two major objectives: adequately retaining people that they consider suitable and proper integration of Performance Management Practice (PMP) (Armstrong, 2012, 114). Performance management programme is an adaptable business method that could lead to the achievement of the organizational mission, goals, vision, and objectives. Moreover, the method is vital for tracking and monitoring the performance of the employees and inefficient areas of the individuals. Most reviewed literature on the subject focus on the whole concept while other literature works narrow on either performance appraisal or performance measurement with no reference to the performance management. Even though these are valid aspects, it is important to note that an effective management of individual or team performance usually need integration if the process ensuring that whatever the employees do within the organization would finally contribute in the organizational required results (Demartini, 2013, 92). Some research undertaken reveal that performance management is a mechanism of ensuring that the organization gets better results from its activities, teams, and individuals through proper understanding and management of performance within the agreed business requirements: standards, competence, and framework of the planned goals. On the other hand, some researchers defined performance management as a process, either systematic or formal, through the means by which the weaknesses and strengths relevant to the job are identified, measured, recorded, and developed. It is from such background that the report aims at analyzing the performance management practice in Commonwealth Bank, undertake review of various literature, and recommend various practices of improving the performance of the workers. Background Even though, from the definition, performance management could sound similarly as organizational performance system, the two differ in various aspects. Commonwealth Bank operates in Australia, United Kingdom, Asia, and New Zealand and provides different financial services. With competition rising within the financial sector, it is vital that the bank improves on its reward and performance management considering the significance role the employees play in the achievement of organizational objective. Through its values, Commonwealth Bank Australia (CBA) engages its employees, which to some extent improve their passion and feel valued in the management of the business. Currently, the bank has 52,000 employees with approximately 60% female workers. In addition, the bank respects the diversification of the employees through listening to their viewpoints, ideas, and working style, which are vital for the achievement of organizational objectives. The employees at CBA enjoy numerous benefits associated with financial services, opportunity for participating in the annual share grants, purchasing of the additional leave, and holiday discounts on the hotels. Besides, the employees also enjoy car hire and flight tickets and various deals on the fitness, entertainment, and computers. With such benefits, it is clear that the bank values its employees, which ensures increment in their performance (Lucas, Mathieson, & Lupton, 2006, 217). Within the bank, there is great training for the employees, development and career opportunities, excellent and flexible working conditions. Nonetheless, considering it is a big business, it could be difficult to navigate. CBA looks at the welfare of its employees as it recognizes hard work and employees showing proper performance. The bank offers a friendly and supportive environment, which is vital for the achievement of the required results. However, the bank also experiences several challenges in its performance management practices. On communication, the bank managers often fail to understand the quality of their communication and the manner in which the workers perceive their communication and interpersonal style. Adequate communication and proper communication style is important in ensure proper performance among the workers considering that the bank has different levels of managements. Conflict resolution among the employees is also important in ensuring that the employees work together for the success of the organization. To achieve organizational objectives, teamwork is inevitable (Chubb, Reilly & Brown, 2015). In most cases, since the CBA has many employees, the managers often ignore the problems experienced among the employees and do not directly address these conflicts with the work team. As a result, some of the employees could feel favouritism within the organization, which is, could derail some organizational processes and the achievement of the required results. The management must also balance meeting the goals, manage the workloads of the employees, and ensure adequate motivational strategies to ensure the achievement of the required for effective and efficient performance management. However, these challenges have great effect on business policy. CBA’s corporate policy emphasize on the creation of the long-term value for the employees, shareholders, and customers. With these challenges, the bank fails to meet some of its strategies including adherence to bank policy, avoidance of situation that could lead to conflict, and portraying honesty within the professional body. Discussions The bank is actively trying to divest various traditional appraisal systems as a means of motivating the employees; however, these strategies are characterized by the rigid practices, which have not the ability of meeting the current challenges of the business. Instead, there is need for ensuring adaptable performance management systems with the ability of handling sudden, strong shift in corporate strategies, and leaving room for the performance planning and communication. Effective performance management need to ensure that the behaviour of the employees and goals are aligned with institutional business strategy (Dangelico, 2014, 738). Ultimately, it, therefore, follows that each activity of the employee contributes actively to the fulfilment of business performance. Hence, it is a vital prerequisite that the workers are familiar with the strategy of the bank. Besides, it is a common business practice to reward workers depending on the team and success of the business. To ensure effectiveness and efficiency in the performance management process, the bank has been able to link and root the core corporate strategy and goals. The strategy used within the bank involves formulation of the mission, action plans, mission, and goals for achievement. CBA uses traditional performance management practice programme. However, there have been complaints from the employees on the ineffectiveness of the annual performance review and the merit-pay-increase matrix used within the organization. These practices present several challenges for CBA. The original goal of performance management was simple and involved not only tracking the progress and continual improvement of the employees but also ensure effective engagement, motivation, and rewarding of the workers based on their personal efforts (De Gieter & Hofmans, 2015, 211). Managing performance is pivotal to the existing relationship between the management and the employees. CBA has not been in a position of exploiting such relations through its poor communication strategies. Therefore, managing performance could be the key element of good communication, which foster the growth, and development of individual employees. When organizational performance management system works well, then the workers are more likely to engage with business goals. Reward management include designing, implementing, maintaining, communicating, and ensuring proper measures for the evolution of the reward processes which assist the business in improving the its performance and achievement of the desired objectives. The bank’s reward processes are based on the reward philosophies and strategies and contain arrangements which normally depends on the structures and procedures devised and managed with an aim of providing and maintaining appropriate levels of pay , the benefits, and various forms of reward (Demartini, 2013, 57). The rewards processes constituted within the bank constitutes of the financial reward aspect that tend to incorporate different processes and procedures meant to track the market rates, paying for employee performance, measuring the value of the job, competence and skills, provision of workers benefits, and designing and maintaining the pay structures. Nonetheless, rewards management needs to go beyond money but also need to involve non-financial rewards, which in the end provides various motivations: intrinsic and extrinsic. The market is becoming highly competitive with many businesses investing within financial sector. As the businesses grow, they tend to acquire competitive advantage through attracting, motivating, and retaining the employees that they consider right for the business while taking careful consideration of the business strategy, measures of performance, and the manner, which these driver influence the major employees and shareholders to ensure success (Paladi & Fenies, 2016, 220). Appraisal performance has been in existence for many years and has been able to revolve around annual review between performance management and reward management. Integration of performance and reward management is vital for the success of the business as it ensures that businesses develop various reward systems based on the organizational performance rather than relying entirely on the performance of individual employees. Performance management could have different aims. With reference to performance management, financial or extrinsic rewards mainly used by the bank involve recognition, development, accessibility to the other assignments, career guidance, and the quality of working life (Demartini, 2013, 60). Most of such practices are deliverable through developmental forms of performance management. Without integration of both concepts, it is clear that the business would have poor reward system for its employees. Findings and Conclusions The reward policies and practices are based majorly on the assumptions on the factors that greatly affect the motivation of the employees to join and stay within the institution while working hard and effectively for the success of the business. Reward policies do not differ much from the motivational theories and beliefs in which their foundations are laid. Besides, the rewards systems are based on the assumption that only money has the ability to motivate the employees. Performance management involves translation of the institutional objectives into clear objectives of the employees that the business sets as the target for workers. It is within such set of performance, target, and requirement that the organization rewards both satisfactory and non-satisfactory individual workers (McGuire & Jørgensen, 2011, 103). There have been several studies on performance management programmes with focus on different dimensions. Nonetheless, the necessary elements of the performance management include improvement in performance and productivity of the employees to ensure effectiveness and efficiency in the services provided. However, the key to proper articulation of each goal of the employees and competency requirement is facilitation of successful achievement within organizational corporate strategy. To ensure coverage of all vital corporate strategic elements, the business utilizes performance frameworks for designing the strategy. There is a clear relationship between the bank’s performance management and financial performance. Consider the fact that labour is typically the largest investment, financial wellbeing depends on the productivity of the employees (Korzynski, 2013, 185). Through achievement of the state in which the workers work to full potential, the bank would return on its labour investment. Engaged employees often take pride in their jobs, tend to show loyalty towards the achievement of organizational objectives, and could go extra mile especially in certain areas such as customer service through ensuring creativity, responsiveness, and adaptability in their operations. From the literature reviewed, a good performance management assist the workers in knowing organizational aims, their roles to achieve these goals, skills and competencies required by the employees to fulfil their roles, and the organizational standard performance required. Recommendations CBA has poor mechanisms of communicating with the employees; therefore, it is important that the mangers understand their unique role in ensuring quality communication and interpersonal style and mechanisms of flexing such styles in different organizational situations. Moreover, it is important that the management engage in role-play or dialogue with the employees as a means of ensuring employees engagement in the management issues, which also forms an adequate foundation for the motivation and improved performance of the employees. The bank also lacks effective and efficient framework of resolving conflict. Irrespective of whether there are performance problems, conflict, trust, and personality clashes among the employees, the managements have to confront them head-on with a win-win situation. These practices would lead to more product and positive working relationships among the employees themselves and the management. References Armstrong, M. (2012). Armstrong's handbook of reward management practice: Improving performance through reward. London: Kogan Page. Chubb, C., Reilly, P., & Brown, D. (2015). Performance Management: Literature Review. Retrieved October 8, 2016, from http://www.employment-studies.co.uk/system/files/resources/files/mp90.pdf Dangelico, R. M. (2014). Improving Firm Environmental Performance and Reputation: The Role of Employee Green Teams. Business Strategy and the Environment, 24(8), 735-749. De Gieter, S., & Hofmans, J. (2015). How reward satisfaction affects employees’ turnover intentions and performance: an individual differences approach. Human Resource Management Journal, 25(2), 200-216. Demartini, C. (2013). Innovation and the Performance Management System. Literature Review. Performance Management Systems, 4(3), 89-115. Demartini, C. (2013). Performance Management System. A Literature Review. Performance Management Systems, 3(2), 55-88. Korzynski, P. (2013). Employee motivation in new working environment. International Journal of Academic Research, 5(5), 184-188. Lucas, R., Mathieson, H., & Lupton, B. (2006). Human resource management in an international context. London: Chartered Institute of Personnel and Development. McGuire, D., & Jørgensen, K. M. (2011). Human resource development: Theory and practice. Los Angeles: SAGE. Paladi, I., & Fenies, P. (2016). Performance Management in Central and Eastern European Countries: A Literature Review. Performance Measurement and Management Control: Contemporary Issues, 1(2), 215-271. Read More