5HR03  Reward for Performance and Contribution

Case study

Leia Technologies was formed in 2017 and employs 75 people. Recently the company has launched its new app “Money4Future” and provides saving and investment products including Lifetime ISAs, pensions and saving accounts.

After a hectic start up, the company’s HR team is now able to reflect on its reward strategies and policies. They recognise due to the growth of the company, and the amount of new people within the HR team, that there are some gaps in knowledge about Reward for Performance and Contribution.

As a senior member of the HR Team, you have received a request from a colleague for an understanding of the issues relating to the impact of reward approaches and packages, how benchmarking data can inform reward approaches and the role of people professionals in supporting line managers.

Your manager has asked you to produce a guidance document to be sent to your colleagues and a blog article to be placed on the HR Team’s online news page.

Preparation for the Tasks:

• Refer to the indicative content in the unit to guide and support your evidence.
• Pay attention to how your evidence is presented, remember you are working in the People Practice Team for this task.
• Ensure that the evidence generated for this assessment remains your own work.

You will also benefit from:

• Reflecting on your own experiences of learning opportunities and training and continuing professional development.
• Reading the CIPD Insight, Fact Sheets and related online material on these topics.
• You should relate academic concepts, theories, and professional practice to the assessment task(s), in a critical and informed way, and with reference to key texts, articles and other publications.

Don’t forget to:

• Complete the front cover sheet, sign with a “wet signature” and place at the front of your assessment.
• Use the bullet points below each task as headings and sub-headings so your marker can see where your answer begins.

Task One – Guidance Document

You have received a request from a colleague for an understanding of issues relating to the impact of reward approaches and packages. They also want to understand how benchmarking data can inform reward approaches. 

Generate a guidance document that covers these two areas, including current models and thinking around the subject. You may wish to break down the guidance document into the following sections:

Section 1 – The Impact of Reward Approaches and Packages

Evaluate the principles of reward and its importance to organisational culture and performance management. (AC 1.1)

• Explain how policy initiatives and practices are implemented (AC 1.2)
• Explain how people and organisational performance can impact on the approach to reward. (AC 1.3)
• Compare the different types of benefits offered by organisations and the merits of each. (AC 1.4)
• Assess the contribution of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance. (AC 1.5)

Section 2 – Benchmarking Data to Inform Reward Approaches

• Assess the business context of the reward environment (AC 2.1)
• Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight. (AC 2.2)
• Develop organisational reward packages and approaches based on insight. (AC 2.3)
• Explain the legislative requirements that impact reward practice. (AC 2.4)

Task Two – Blog Article

To sit alongside the guidance document, your manager has asked you to create a blog article to sit on the HR Team’s online news page.  The article should be titled:

“Supporting Line Managers to Make Reward Decisions – The Role of People Professionals”

It should be aimed at people requiring information and guidance and should cover the areas below:

• Assess different approaches to performance management. (AC 3.1)
• Review the role of people practice in supporting line managers to make consistent and appropriate reward judgements. (AC 3.2)
• Explain how line managers make reward judgements based on organisational approaches to reward. (AC 3.3)

The most important part of this article is covering the areas above. Whilst you should consider the audience (your internal team) you are writing for, you could also research what makes a good blog post and incorporate those elements into your article.

Your article should contain research and references.

SOLUTION: 5HR03 ASSIGNMENT ANSWERS

SOLUTION: TASK ONE

AC 1.1 Evaluate the principles of reward and its importance to organisational culture and performance management

The principles of reward can be defined as broad statements that determine how company employee should be rewarded for their target performance or above target performance (Declan, n.d.). The principles serve as a guide to companies in rewarding their employee in a fair and consistent manner.

One of the principles of rewards is the total reward approach that is designed and implemented by organisations through provision of monetary, benefits in kind and development of rewards to employees that achieve specified organisational goals. The rewards in this context are aligned to organisational culture and context and relative to the external market environment (Almarwan, 2019). The main objective of the total reward approach is to strike a balance between the employee needs and the organisational needs. Therefore, this principle helps organisations in maintaining a balance between provision of competitive wages to attract and retain the talented workforce (Almarwan, 2019).

Fairness is another principle of rewards. Ceplenski (2013) indicated that research demonstrates that employees perceive fairness and equitable treatment as a core driver of engagement, performance and retention. White (2021) noted that fairness in the reward systems in companies results in increased positive emotions and attitudes of employees and thus more behavioural alignment to company values .This is in contrast to unfair treatment that is perceived to be corrosive and is bound to have devastating impacts on the organisation such as hostility, distrust, absenteeism, high turnover and diminish willingness of employee to assist each other in the delivery of core objectives of the company. To achieve fairness in the reward system of employees companies should define behaviours and the perceived reward value, promote consistency, develop a price and communicate clearly as well as utilise a reward and recognition platform (White 2021).

There is also the principle of intrinsic and extrinsic rewards. Intrinsic rewards are premised on the concept that intrinsic motivation occurs within the individual and as such the most powerful rewards are drawn internally. In light of this some organisations provide intrinsic rewards in form of professional growth, personal achievement, sense of accomplishment and pleasure. Extrinsic rewards on the other hand are tangible rewards and can be financial in nature such as bonuses, salaries as well as simple gestures such as public awards, verbal praise, better office and additional responsibility (Manzoor, Wei & Asif, 2021). Such rewards are important to organisational performance as they increase employee motivation and engagement which in return heightens employee performance.

AC 1.2 Explain how policy initiatives and practices are implemented

Reward policies and initiatives in organisations have to be grounded on the principles of fairness, equity and consistency. Fairness refers to just and impartial behaviour or treatment without discrimination or favour. Similarly, equity refers to freedom from favouritism or bias while consistency refers to the degree within which policies are steady and similar across the organisational structure.

Organisational policy and practices in reference to rewards face the prevalent challenge of exhibiting external competitiveness whilst at the same time sustaining internal quality. Greene (2018) explained that basing pay singularly on pay is bound to increase the organisational budget. As such, external competitiveness and internal equity in company rewards are often in conflict with each other. For example a hospital that offers non-competitive offers for programmers is less likely to attract and retain high quality talent and as such in order to provide quality it might be forced to outsource the service at a cost as it cannot wish away the realities imposed by the market (Green, 2018).  One way to incorporate external market competitiveness and sustain internal quality is to creative pay ranges for each discipline and each aligned to market pay levels as well as to establish control points that are regularly reviewed depending on the financial growth of a company.

Implementation requires communicating the outcome and impact of the reward policies. Implementation of assimilation policies serve to guide where jobs should be allocated in the structure and how to deal with those who are ‘green circled’ or below minimum for their new grade. In addition, there is need to spell out how those who have been ‘red circled ‘or paid more that the upper limit of their new grade will be determined (protection policy) (Armstrong, 2007). It is critical that the management agree of the protection and assimilation policies prior to implementation.

Line managers play a significant role in administering rewards and reward policies must recognise this. Consequently, it is a policy decision to determine the extent to which responsibility of rewards should be devolved to the line managers (Armstrong, 2007). To enhance implementation, reward policy guidelines should be adhered to and consistency in decision-making should be made by the line managers across the whole organisation. To this end, the line mangers may need to be trained to increase their capacity in exercising judgements on rewards (Armstrong, 2007).

AC 1.3 Explain how people and organisational performance can impact on the approach to reward.

The people in an organisation serve as the greatest asset as they serve as the drivers to attainment of company objectives and goals. Human resource has to be procured to oversee the operations of a company irrespective of whether it is a goods providing or a service delivery company. The approach of reward adopted by a company is dependent on many factors including the type of people employed for example the heightening demand for ‘knowledge workers’ (Armstrong, 2007). In line with this is that people make the difference in a company and hence serve as the competitive advantage in the business world and as such the reward system may be customised to attract and retain highly talented people to the organisation. Similarly, (Bakshi, 2019) stated that organisations that give the most rewards to employee are seen to be more successful as they are able to attract and retain highly performing employees. Additionally, proper rewards are linked to reduction of absences that are a perennial headache to managers (Bakshi, 2019).

The people are interlinked to organisational performance as they offer their knowledge and skills to a company in an effective way for a company to succeed and hence gain the competitive advantage as previously mentioned. Organisational performance impact on the reward approach as the best performers in a company are prone to exit for better rewards and prospects. In the same light, the reward approach utilised by a company can have a debilitating effect on employee performance. On the other hand, a good reward strategy can encourage employees to gain the requisite knowledge needed to help the organisation increase and grow in reference to performance (Bakshi, 2019). Armstrong (2007) succinctly stated that the people deliver on organisational performance and hence the need to develop a reward strategy that motivates and retains people who have unique capabilities. Additionally, managers require to understand employee perceptions of importance and fairness and tie it to the reward strategy people tend to perform when they are assured that they will fairly be recognized for their exemplary performance.

AC 1.4 Compare the different types of benefits offered by organisations and the merits of each.

According Verlinden (2019) employee benefits cover the indirect pays accorded to the workforce in an organisation. Employee benefits cover several options including performance related pay, insurance cover, share ownership, bonus schemes, and commission schemes to profit sharing among several other things that are offered to employees. Verlinden (2019) categorised benefits into four benefits at work, benefits for financial security, benefits for health and lifestyle benefits. The benefits at work can include access to employee clubs, skills development, working hours and leave, activities and gifts as well as food and beverage. They have several advantage such as boosting employee morale, increases employee engagement and productivity as well as increases employee commitment to the organisation. However, some of the employee benefits such as skills development are expensive and time consuming meaning that there are days that productive employee have to be absent which impacts on organisational performance.

Consequently, the benefits for health and wellness vary from one organisation to another but include provision of psychological support sessions, physiotherapy, chiropractic sessions and fertility treatments (Verlinden, 2019). In explaining the importance of health benefits, Reddy noted that some of the advantages are that health is wealth and also encourages the employees to regularly attend health check-ups. The demerit is that it is difficult to maintain or switch.

There are also the financial security benefits for employees and include pension plans, insurances, bonuses, commissions and possibility of employees acquiring shares of the company they work for (Verlinden, 2019). The advantages of this is that it helps in resourcing and talent management as it attracts new talent from competitors, heightens dedication of the workforce,  and is also significant to the wellbeing of employees (Belcher, n.d.). The disadvantage is that the cost implication may strain the company and it is difficult to keep everyone happy in an organisation.

The final category is the lifestyle benefits that include of work-life balance so as to facilitate child care, legal services and grocery delivery as well as mobility benefits that make the life of employees easier (Verlinden, 2019). To this end employees can work at home or elsewhere and thus do not have to come into the office regularly. Harness (2019) noted that lifestyle benefits makes the employees feel valued, motivated and increases dedication to the company and hence reduce turnover.  The disadvantages to this is requires additional administrative costs such as acquisition of company laptops to enable working from home as well as procuring of online platforms that facilitate working from home such as holding zoom meetings.

AC 1.5 Assess the contribution of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance.

According to Armstrong (2007) extrinsic rewards are provided by employers in form of pay and benefits as well as in form of nonfinancial rewards such as recognition, feedback and praise (Armstrong, 2007). Thomas (2009) opined that extrinsic rewards are mostly financial in nature and are external to the work itself and are controlled by other people. They are also tangible and quantitative in nature.

Munir, Lodhi, Sabir and Khan (2016) denoted that there is a significant statistical relationship between extrinsic rewards to motivation and satisfaction of employees. To this end, they recommend that organisations should have an effective extrinsic rewards system to retain high performers in the organisations and should be aligned to their productivity. In addition, Munir et al. (2016) stated that when employees basic pay needs are fulfilled they tend to increase their motivation levels and thus enhance on job performance. Conversely Hajduk (2017) argued that money can be a demotivator to employees that feel that they are unfairly remunerated which in return reduces their contribution to organisational performance.

Intrinsic rewards are non-financial in nature and are related to achievement at the workplace and responsibility. The non-financial rewards in an organisation are job design and role development (meaningful work, autonomy, scope to use and develop skills) , quality of working life, opportunities to achieve and develop as well as work life balance (Armstrong, 2007). Thomas (2009) articulates that intrinsic rewards are psychological in nature as they are drawn from the inside and as such are inwardly controlled.

Munir et al. (2016) stated that aspects such as praise and recognition are efficient intrinsic rewards that increase motivates employees to perform. They motivate employees to contribute to organisational performance as employees enjoy completing tasks successfully, receiving appreciation for achieving a challenge and being treated in a caring and considerate manner. This aligns to satisfaction in delivery of work, enjoying autonomy and psychological fulfilment of work (Munir et al, 2016, pg.95). Hajduk (2017) emphasised that the intrinsic reward model can only be attained after provision of basic pay and befits which the inspire employee to excel in their role and thus focus on suing their own path of development to make appositive impact to the organisation. As such, performance is enhanced by employees’ purpose is aligned to organisational purpose.

Section 2 – Benchmarking Data to Inform Reward Approaches

AC 2.1 Assess the business context of the reward environment.

The reward system of an organisation is heavily dependent on both the internal and external contexts of the business. Armstrong (2007) opined the business strategy also determined the reward strategy of a company. Internally, the employee point of view also shape the ward environment of a company. As such their expectations, aspirations and needs as stakeholders of an organisation should be considered in the development of new reward processes including performance management, job evaluation and contingent pay (Armstrong, 2007).

Consequently, the external environment in reference to globalization, increased competition and industrial relations influence reward policies and practices. Conventionally for example, globalization of ideas and people tended to focus of the elite expatriate workers sourced from headquarter locations of global companies and rewarded in isolation in the local country they are placed. Nonetheless, this has change overtime as focus has been shifted to global companies embracing diversity and utilising local talent in its overseas branches (Armstrong, 2007).

Employment trends indicate that there is a heightening demand for qualifications and skills taking place particularly for professional and managerial workers, consumer service staff, skilled manual workers as well as knowledge workers. This influences the reward strategies utilises by companies to attract and retain such professionals (Armstrong, 2007).

Moreover, the rates of pay in the market place also influence the reward strategies of companies in the quest to gain competitive advantage, the rates of pay and pay reviews in company have to be outstanding (Armstrong, 2007). Legislation also influences the reward environment of companies for example some of the legislations in the UK that directly or indirectly affect pay practices and policies include the 1998 National Minimum Wage Act, the Employment Equality ( Age) Regulations2006 as well as the Data protection Act 1998 to mention but a few.

The industrial relations scene is another business context that influences the reward practices. In this regard trade union are involved in the negotiations for national pay, pronouncements for top executives and exerting pressure to both public and private organisations in attainment for equal pay(Armstrong, 2007)

AC 2.2 Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight.

Fallon (2021) indicated that the process of benchmarking entails using key metrics in evaluating the current status of a business and subsequently determining where you want to be through development of an action plan to achieve and measure the set goals. Every industry has set standards that are denoted to be the best practice and business can assess if they are meeting the standards through benchmarking.

Benchmarking can be categorised into three internal benchmarking that enhances the business by comparing it to historical data of the company or comparing organisational departments or

comparing branch data. There is also competitive benchmarking involves setting certain goals anchored on what the competitors in your business are doing. They impact on aspects such as employee salaries. Thirdly, is strategic benchmarking that seeks to emulate certain performance standards (Fallon, 2021). There are various ways that benchmarking data can be sourced including the following

• Online payment data which is cheaper and quicker to access when compared to paper publications. It assists users in extrapolating salary figures of different positions and adjusting them according to company size and conditions specific to the business. Online pay data can also be downloaded from HR systems and analysed offline through excel spread sheets
• Data can be also be gathered through general published surveys that can be procured from providers such as Croner Reward and Pricewaterhouse Coopers. Such surveys comprises of data on various occupations especially professional and managerial jobs and expound on aspects such as base salaries, number of employees level of turnover and industry sector. This allows for continuity, wide coverage and allows one to measure trends analyses over time
• Data can also be gathered from management consultant databases and is based on well researched and matched data. This can provide useful information on general salary levels for professional staff and managers and subsequently can be used to match and contextualise.
• Data can also be gathered through occupational surveys that are initiated by professional institutions that provide relevant information such as pay of people according to occupations such as IT staff, HR specialists, accountants and sales people. They comprise of significant information on pay in relation to qualification, age and membership.

(Adapted from Armstrong, 2007)

AC 2.3 Develop organisational reward packages and approaches based on insight.

Benchmarking data can be used to develop an appropriate reward package for an organisation. According to Armstrong (2007) this can proceed through grade and pay structures that provides a designed framework within which organisational reward package can be implemented. Grade and pay structures help organisations to determine hierarchy of jobs, define pay levels and scope for progression of pay. A grade structure is a sequence or hierarchy of bands, levels or structure into which categories of jobs are broadly compared. Some of the types of graded structures that an organisation can adopt include narrow graded structures, job family structures and broad banded structures. Subsequently, pay structures define the number of grades contained and the width or span of pay range between the grades (Armstrong, 2007).

The development of a reward package can proceed through the job evaluation schemes that involve utilising a systematic process for evaluating the relative value of a job in relation to other roles in a company (Price, 2020). Job evaluation can  proceed through two main approaches non analytical approach that enables all jobs to be compared when ranking them and analytical approach that is hinged on breaking down whole job s into defined actors such a s communication, scope and knowledge as well as levels (1,2,3) (Price, 2020). The analytical approach has several advantages including helps in maintaining a fair system of pay, promotes transparency and helps in ensuring that the reward packages are externally competitive.

The other way to develop an appropriate reward package is through evaluation of market rates or market pricing. Cipd (2021) defines market pricing as a way of gathering data on pay rates for similar jobs with the aim of establishing the market and thus set an appropriate rate for company employees. The organisation should be guided towards adopting a pay policy positioned at the median level for the market rates cognizant of the locality, occupation or sector.

AC 2.4 Explain the legislative requirements that impact reward practice.

There are several legal frameworks in the UK that impacts on the reward practices adopted by the employers. This is echoed by Cipd (2021) that states UK employers are required, to adhere to legal proceedings in all their reward policies. For example in reference National Minimum Wage, equal pay, reporting on gender pay gap and chief executive pay ration (Cipd, 2021). The National minimum wage applies to all workers aged 16 and above while the National Living Wage applies to all employees aged 25 and over. The national minimum wage increases annually and employers must comply irrespective of whether it is a small scale business.

There is also the equal pay and equality act 2010 that stipulates that organisations must be free of bias and thus accord both men and women equal treatment in terms and conditions of their employment contracts particularly when conducting similar work, when their work is rated as equivalent in a job evaluation study and when work is found to have equivalent value in reference to skill, effort and decision making (People point HR, 2017).

Organisations also have to consider certain legal requirements when setting the rewards for senior employees such as the chief executive pay ratio. For example, as from January 2020 large listed UK business are required to publish and explain he CEO pay ratios. To this end, Cipd (2021) noted that CEO remuneration reduced marginally in 2021. The UK laws also stipulates that all employers should provide their employee with certain workplace benefits such as paid leave or enrolment to a pension scheme for those who are eligible (Cipd, 2021).

Bibliography

Almarwan, M. (2019). Evaluate the principle of total rewards and its importance to reward strategy. [online] www.linkedin.com. Available at: https://www.linkedin.com/pulse/evaluate-principle-total-rewards-its-importance-marwan/.

Armstrong, M. (2007). A Handbook of Employee Reward Management And Practice. 2nd ed. London and Philadephia: Kogan Page.

Bakshi, A. (2019). Employee Rewards: Introduction, Aims, Types and Purpose. [online] Essays, Research Papers and Articles on Business Management. Available at: https://www.businessmanagementideas.com/employee-management/employee-rewards/20147.

Belcher, L.M. (n.d.). Advantages & Disadvantages of Benefit Plans for Employees. [online] Small Business – Chron.com. Available at: https://smallbusiness.chron.com/advantages-disadvantages-benefit-plans-employees-36667.html.

Ceplenski, C. (2013). Employee Rewards: The Importance of Perceived Fairness. [online] HR Daily Advisor. Available at: https://hrdailyadvisor.blr.com/2013/06/29/employee-rewards-the-importance-of-perceived-fairness/.

Cipd (2021a). Job Evaluation & Market Pricing | Factsheets. [online] CIPD. Available at: https://www.cipd.co.uk/knowledge/strategy/reward/market-pricing-factsheet#gref.

Cipd (2021b). Reward | Factsheets. [online] CIPD. Available at: https://www.cipd.co.uk/knowledge/fundamentals/people/pay/reward-factsheet#7546.

Declan, A.M. (n.d.). Reward Strategy and Principles. [online] Al Massar Declan. Available at: https://almassardeclan.com/reward-strategy-and-principles/.

Fallon, N. (2021). The Benefits of Benchmarking in Business Operations – businessnewsdaily.com. [online] Business News Daily. Available at: https://www.businessnewsdaily.com/15960-benchmarking-benefits-small-business.html.

Green, R. (2018). Internal Equity or External Competitiveness: Can You Have Both? [online] www.linkedin.com. Available at: https://www.linkedin.com/pulse/internal-equity-external-competitiveness-can-you-have-robert-greene/.

Hajduk, P. (2017). What’s the real value of reward? [online] People Management. Available at: https://www.peoplemanagement.co.uk/voices/comment/real-value-reward#gref.

Harness, J. (2019). The Advantages of Discretionary Employee Benefits. [online] Bizfluent. Available at: https://bizfluent.com/info-10004508-advantages-discretionary-employee-benefits.html.

Manzoor, F., Wei, L. and Asif, M. (2021). Intrinsic Rewards and Employee’s Performance With the Mediating Mechanism of Employee’s Motivation. Frontiers in Psychology, [online] 12. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8319625/.

Munir, R., Lodhi, M.E., Sabir, H.M. and Khan, N. (2016). Impact of Rewards (Intrinsic and Extrinsic) on Employee Performance with Special Reference to Courier Companies of Faisalabad City. European Journal of Business and Management, [online] 8(25), pp.88–98. Available at: www.iiste.org [Accessed 22 Mar. 2022].

PeoplePointHR. (2017). Pay and reward covers all benefits an employer offers its employees. [online] Available at: https://peoplepointhr.co.uk/hr-solutions/pay-reward-management/.

Price, J. (2020). The 5 key benefits of job evaluation. [online] Paydata. Available at: https://www.paydata.co.uk/hr-hub/blogs/job-evaluation/the-5-key-benefits-of-job-evaluation/.

Reddy, C. (2016). What are Employee Benefits? Advantages and Disadvantages – WiseStep. [online] WiseStep. Available at: https://content.wisestep.com/advantages-disadvantages-employee-benefits/.

Verlinden, N. (2019). 12 Types of Employee Benefits to Implement at Your Organization. [online] AIHR. Available at: https://www.aihr.com/blog/types-of-employee-benefits/.

White, R. (2021). Achieve Fairness in Reward Management With These 5 Steps. [online] www.incentivesmart.com. Available at: https://www.incentivesmart.com/blog/achieve-fairness-in-reward-management.

SOLUTION: TASK TWO

Introduction

Line managers are the heart of management activities in organisations as they oversee the activities of employees who do not have supervisory responsibilities and who form the bulk of employees in a typical company. Their role is so critical so much so as they are the direct link between the employees and the management. To this end, they are the first to identify individual employee behaviour, motivation and ability to execute their mandate flawlessly. On the other hand, Cipd reckons there is an evolving relationship between line managers and people professionals in that whereas HR or L&D or OD specialists are involved in the design of people management practice the line managers are the first to communicate and process their decisions to the employees. Thus, the need to defuse the tension between HR function and line managers and subsequently seek to complement each other in the quest to enhance organisational performance. As such, this article will seek to identify how people professionals can support line managers in executing a HR functions more precisely in making reward decisions.

Approaches to Performance Management

CIPD which is a people professional body reckons that “if people are the greatest creators of value in organisations, then good performance management is critical for an organisation’s success.” This begs the question what really is performance management. Simply put, it is the attempt to maximise on value creation as well as ensure that employees contribute to the attainment of business objectives. Whereas there is no standard definition, performance management it is often described on account of three major activities that are establishment of objectives through which employees can see their respective roles in the organisational mission and strategy, enhanced performance of employees and organisation as well as holding the employees accountable to their performance by linking it to rewards, promotions or termination.

There are different approaches that are utilised by modern companies in performance management. For example, Google has been identified as the most progressive human resource company as it has managed to integrate both the conventional approaches to the recent trends in performance management. Google utilises the annual performance reviews with a mid-year evaluation to progress made, monthly performance check-ins that focuses on coaching, personal issues, career development among other issues, annual “Upward Feed Back Survey” that is equivalent to the 360 degree feedback and Objectives and Key Results (OKRs) that is mildly different to Management by objective Setting. IBM is another company that is revolutionising performance management approaches as it developed a performance review system known as “Checkpoint” that helps employees in the company in setting short term goals and getting management feedback for every quarter. Facebook is another good example, which utilises peer to peer feedback which is used to determine how ell teams are performing and understand when collaboration is happening. The company also uses an internal software that provided consistent and real time feedback and helps employee resolve issues before morphing into problems.

Role of People Professionals

People professionals are invaluable to performance management as they reinforce the link between organisational and employees’ objectives, provides feedback to motivate the employees and also holds them accountable for their actions. People professionals have a duty of supporting the line managers in executing tactical human resources functions being cognizant of the fact that are devoid of the requisite knowledge and skills. In light of this, the core role is training and development which should aim at preparing line managers to take leadership roles in HR functions such as conducting fair performance appraisals of the employees they are leading.

In an article focusing on why HR and Line managers should work together, Ruth Mayhew indicated that some of the topics that HR should impart to line mangers include how to provide employees with constructive feedback, how to conduct unbiased and fair evaluation of employee performance as well as how to provide both financial and non-financial rewards to employees basing on evidence as data to avoid complains of favouritism. In this regard, people professionals should train line managers in collecting and maintaining performance data which can in turn be used in the rewarding process. The learning objectives should also focus on the importance of consistency and transparency when managing people as well as the need to comply with organisational policies and thus leading by action and being a role model. The people professionals can also support the line manager by leading them well in cognizance of the organisational culture which they should then replicate in their role as leaders to the other employees.

Role of Line Managers in Rewarding

In a bid for the line mangers to effectively deliver in making rewards judgements, they need the requisite tools needed to reward good performance. The training and development accorded to line mangers should help them in overcoming poor judgements in differentiating performance levels or shying away from the difficult conversations of performance appraisals from non performing employees. Line managers should leverage on the heightening use of technology in administration and subsequently link it to the performance management of their teams.

CIPD evidence on effective performance management approaches indicate that line managers have a critical role in evaluating and recognising performance of individual employees within their purview. To this end, line managers can utilise non-financial rewards such as symbolic gestures to employees with potential as a way motivating them, providing them with a work-life balance schedule and providing them with opportunities for job enrichment such as travelling to overseas branches or tours to other competing organisations. Ultimately, line managers should align their rewarding decisions to organisational policies, values and beliefs.

Conclusion

This article has demonstrated that performance management is the determining factor in an employee’s wages and benefits. To this end, organisations were noted to utilise several approaches to performance management such as the annual performance appraisals, the 360 degree feedback, and management by objectives as well as technology based performance software. The approaches are customised by different organisations to fit their context and thus reward employees based on their productivity. Consequently, the article emphasizes that people professionals have a duty of supporting the line mangers in undertaking critical HR functions such as performance appraisals and more precisely in rewarding through training and development as well as leading them by example hoping that they replicate this in their mandate. Last but not least, the line managers’ role in rewarding is heavily dependent on having the right knowledge and skills as well as tools to reward good performance.  Their decisions should be pegged on evidence based insight, organisational values and beliefs.

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