Page 139 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System Pretty Bhalla, Lovely Professional University

Notes Unit 12: Performance Management Linked Reward System

CONTENTS

Objectives
Introduction
12.1 Performance Management and Reward
12.2 Components of Reward System
12.3 How to Link Performance with Compensation?

12.4 Implications of Performance Linked Reward System
12.4.1 Whom to Reward?
12.4.2 What to Reward?
12.4.3 How should Assessment be done?

12.4.4 How do Organizations Reward?
12.5 Summary
12.6 Keywords
12.7 Self Assessment
12.8 Review Questions

12.9 Further Readings

Objectives

After studying this unit, you will be able to:
Describe the concept of performance based reward system
Explain the components of reward system

Analyse linkage and implication of performance management linked reward system
Introduction

Performance management is concerned with creating a culture in which organisational and
individual learning and development are continuous process. It provides means for integration
of learning and work so that everyone learns from successes and challenges inherent in
day-to-day activities. The desire to enhance performance is making ever-greater demand on the
knowledge and skills of the workforce and on the people, who carry a much greater responsibility
for their own performance. Performance and results are important but concern for people, their
well-being and fairness of treatment is equally important.

If organisations want to attract high performers and retain and motivate the high performer, they
have to be willing to reward excellent performer highly. This requires abandoning traditional
pay structures and practices in which the best performers are only paid a little more than average
and below average performer. In today’s new economy, companies have to invest money in
human capital in order to make them.

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