Performance Management System, Reward System & Employee Motivation: A Linkage

Performance Management System, Reward System & Employee Motivation: A Linkage

Every organization wants to achieve a success and be the leader. But, why do only some organizations succeed and rest do not? There can be multiple answers to this questions – may be the business strategies were not correct, may be the marketing tactics were not right, may be financial approaches were misleading. The reasons could be numerous. However, the demotivated employees can be a very potential reason for every organization to be unsuccessful.

As a HR practitioner, I see lack of motivation among employees as the major cause of failure for any organization because they can be a serious threat to the organization than under capital or low sales volume. In countries like Nepal where unions are strong, this can be a very difficult situation to be dealt with, as the organizations will not be able to fire their employees. Therefore, it is very important to motivate the employees. And, in my view, one of way to motivate the employees is to link performance management system (PMS) with reward system and reward the employees on the basis of their performance.

The major goal PMS, in any organization should be to figure out the performance of the employees, verify it with the standards, provide feedback in case of deviation and reward employees for their excellence. But, unfortunately, in countries like Nepal, I have come across a number of organizations who have either not implemented PMS or who have implemented PMS with no final destination. There are very few who have actually implemented PMS in the way it should be.

PMS without a final destination can be devastation as it leads to a chaotic situation because no one understands the value and importance of PMS and why their performance are being evaluated. This is to say, all the effort and time devoted for performance management and evaluation to link it with reward system becomes a complete waste. Here, when I mention “final destination” it should be understood as a process of giving feedback for deviant performance to improve it and rewarding the excellent ones to encourage it more.

Any employees in any organizations, I believe would love to be recognized and rewarded for excellent performance and happily accept feedback to correct the deviant performance. However, the feedback should be constructive and not destructive. Constructive feedback helps to encourage employees to do better next time whereas destructive feedback would demotivate employees even more.

When PMS is linked with reward system and employees are genuinely rewarded for their performance, then it helps to motivate other employees to do their best because they would also want to get rewarded for their performance. Moreover, it will develop confidence and enhance self-respect in employees who are rewarded. This becomes the source of motivation for those employees who are rewarded and they will try and meet new challenges.

Next, when reward is directly linked to performance of the employee, there will be less complains about getting low raise or no promotion among the employees. However, an organization should make sure that it keeps on motivating those employees who have not got raise or promotion by providing them constructive feedback and encouragement to do may be bunch of demotivated employees who may cause a problem to the organization.

When employees are motivated they give their best and if they are properly rewarded then they will stay loyal to the organization. For any organization, as far as I know, there are no any greater assets than the employees who are motivated, loyal and perform their best for the growth of the organization.

Linking performance management system to reward system and genuinely rewarding employees for their performance has numerous benefits to the organization as mentioned above. However, if not linked properly, it can also bring a lot of troubles to the organizations.

Link Performance Management System to reward system and genuinely reward Employees for their performance to motivate them!!!

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