Chapter 1 – Performance Management & Reward Systems in Context – Flashcards
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Performance Management
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is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.
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Two Main Components of Performance Management System:
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Continuous Process and Alignment with strategic goals.
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Continuous process
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never ending process of setting goals and objectives, observing performance, and giving and receiving ongoing coaching and feedback.
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Alignment with strategic goals
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a direct link between employee performance and organizational goals.
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Reward system
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is the set of mechanisms for distributing both tangible and intangible returns as part of an employment relationship.
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Base pay
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compensation given to employees in exchange for work performed
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Cost-of-Living Adjustment
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imply the same percentage increase for all employees regardless of their individual performance
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Contingent pay
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the amount of additional compensation depends on an employee's level of performance.
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Short-term incentives
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added to the base pay and are only temporary pay adjustments based on the review period.
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Strategic Purpose
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to help top management achieve strategic business objectives by linking the organization's goals with individual goals.
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Onboarding
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refers to the processes that lead new employees to transition from being organizational outsiders to organizational insiders.
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Administrative Purpose
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furnishing valid and useful information for making decisions about employees such as salary, recognition, layoffs, merit increases, etc.
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Informational Purpose
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PMS used to communicate how EE's are doing and provide them with information on specific areas for improvement.
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Developmental Purpose
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Refers to both short-term and long-term aspects to improvement based on feedback from the PMS
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Workforce planning
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comprises a set of systems that allows organizations to anticipate and respond to needs emerging within and outside the organization, to determine priorities and to allocate human resources where they can do the most good.
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Purposes served by a Performance Management System
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1. Strategic 2. Administrative 3. Informational 4. Developmental 5. Workforce planning 6. Documentational
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Performance Appraisal
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1. emphasizes the assessment of an employee's strengths and weaknesses and does not include strategic business considerations. 2. Usually do not include ongoing feedback. 3. usually a once-a-year event
