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

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

The way in which a reward scheme is structured, the way employees are paid, and how they perceive their work and organisation are all deeply connected. The employee performances as well as the overall organizational performance influence the way the reward system is designed, implanted and achieved.
Direct Influence on Rewards:
Performance of each individual and the same performance team contributes directly to the extent of the reward. Top-of-the-class employees typically receive compensation in the form of merit payments which include but are not limited to addition to basic and variable compensation, rates for additional agreements (e.g. bonuses), appraisals, advancement, or special privileges like extra free time.
Informing Reward Systems:
Through performance evaluation, the organisation can spot and remediate ineffective areas and cleverly offer the staff what they need to become even more motivated and skilled. These can be senior leadership teams encouraging the use of these benefits or developing programs around these principles.
Performance-Linked Rewards:
These are incentives linked with the completion of individual performance targets. Sharing with the employees something apart from their compensation can increase the odds of succeeding in achieving the objectives and therefore the team/individual efforts are not left unnoticed. The pay-for-performance scheme is able to improve productivity, teamwork and the overall success of the business.
Impact of Organisational Performance:
Awards are determined by the general performance of the organisation, which in turn also creates the way the reward is given. Having achieved success, the contributions of staff and teams may be interpreted as more fruitful and be rewarded commensurately through more generous bonuses. On the other hand, when the job performance is poor, the rewards should really be adjusted in such a way that the workers continue to give their best and be happy with their job.
Reward policy can be modelled in a way that it is contextual to people and organizational performance thus subjecting them to what can be called the Human aspect of the organization. The performance outcome of an employee at individual, team, or organisational level, along with the factors like performance management system, resource availability, and organisational value determine the manner how rewards are to be implemented within an organisation.