Operation of Performance Management Systems 'Literature Review' chapter

Excerpt from 'Literature Review' chapter :


However, when an employee sees that his or her employer is stepping up and trying to do something that the employee wants or needs, instead of just what is good for the company and not the employees, motivation can result. People need to feel that they matter to their employer. Few people are content with only receiving monetary compensation for the work that they do for their boss. They are all individuals and they have a desire to be recognized. They have goals that do not match up with the goals of the organization for which they work, but they may also have goals which are similar in nature to those of the company by which they are employed. Has anyone asked them what they really want to do with their lives and how the company can help facilitate those dreams? Companies that are concerned about the health and well-being of their employees can help themselves and the employees by searching for common ground within job descriptions and allowing their employees the freedom to grow and develop. The more an employee can do, the more benefit he or she will be to the company.

Trends and Pay-For-Performance

One trend that is being seen more and more commonly to motivate employees and get them working toward the same goals as the company is pay-for-performance. The idea of paying for performance instead of providing a steady salary is not new, and has been around for many years. However, it has become more common recently because the idea of being able to set how much money is made is a big motivator. Employees are able to help the company move toward its goals, because they foster those goals when they are pursuing their own raise in income. By becoming interested in how much extra they can make (or other perks that are offered for performance) the employee inadvertently helps the company to advance its goals and desire, because the employee is bringing in much more business. That is a winning situation for everyone involved, and that winning situation will show in the bottom line when performance management programs are used to determine where the company has been in the past and where it may be going in the future.

When a company is setting up performance management, that company should be aware that money is far from the only important factor to employees. Things like vacation days, praise, promotions, discounts, office parties, business vehicles, insurance, and simple recognition are just some ways in which employees can be compensated for their hard work. Some employers offer child-care, extra vacation or sick days, repayment for tuition, and other incentives to encourage their employees to do more and go further, because that ultimately helps the bottom line of the business. Employees can be highly motivated by these types of things if the motivators are used correctly (Leonard, Beauvis, & Scholl, 1999).

For employees who truly are deeply motivated by how much they are being paid, pay-for-performance compensation appears to be the way to go for businesses that want to reward employees and get them working hard for the company. When an employee is offered this type of deal, though, he or she may be "contingent" in that, if he or she does not sell enough there will be no continued offer of employment. While that can motivate many people, it can also deeply concern some of them to the point that they do not want to continue working for the company. They may be so fearful of failure or of losing their job that they end up struggling -- and ultimately losing their job because of it, which is the very thing that they feared.

Making money on the pay-for-performance plan really is unlimited, but the key is still in the actual motivator. Each employee has goals and dreams -- some of which coincide with the work of the company and some of which do not -- that the employee hopes to someday accomplish. If the company can offer nothing to help that employee realize those goals and dreams, all of the money that can be made may not be enough. Not all goals and dreams require a large amount of cash. When an employer realizes that, he or she has taken the first step toward working with employees to form a cohesive unit where everyone is working toward something of value for the company and for themselves (Leonard, et al., 1999).

One of the reasons that employers are starting to turn more and more toward performance management is to increase their bottom line, but another reason is the realization that things have to change if the company wants to keep its best employees. Each employee has something that is important to his or her working life. If an employer offers that, the employee is more likely to stay. In 1985, Schein called these things "career anchors," and they are an integral part of what motivates and makes up an employee. If the career anchor held by an employee has nothing to do with the goals and plans of the business, holding on to that employee may be difficult. In those types of circumstances, it may be best to allow the employee to move on and find what works for him or her. That will also allow the business to locate employees whose career anchors are more closely matched to the business' goals and future plans.

Some employees see their career anchors much differently, because of the nature of their job. Employees who work in sales, for example, have territories in which they sell their goods or services. These territories are very significant to them, and usually the people who sell the most and are the most consistent are offered the best territories. That makes sense from the standpoint of the company's bottom line, but it can also make it very difficult for a new salesperson to get anywhere -- and that can lead to discouragement and a high turnover rate. To compensate employees that are new and give them a chance to succeed, more training may be in order. They can also be given the chance to work with a mentor, praised, and provided with sales leads. At the end of the day, though, the employee must have similar goals to the organization or the likelihood of success will be low.

The job description may not fit with the employee's goals and dreams, and he or she may have career anchors that do not fit well with the business. In order to motivate an employee, a business must take the time to get to know that employee. People are very different, and if they are given the opportunity, most of them can do great things. Unfortunately, that is more difficult to accomplish when they feel as though what they want is not something they can receive from a particular company. Employees should not expect a company to do everything for them, but they certainly deserve a reasonable level of appreciation and respect.

When an employer works with employees to get what is needed for everyone involved, employees are highly motivated to do what they can to help -- because they see that their hard work will be rewarded with something that matters to them. Managing employee performance, whether it is done through a program or through an old-fashioned method, is not a stand-alone effort. In other words, just looking to see where employees are on a scale or spectrum is not enough if the company does not work to help employees improve. When employees are motivated to do more, everyone benefits.

Models of Human Motivation

In studying human motivation there are two different models, called the process model and the content model. Both are simple to understand, but they are very important to any company that is interested in managing the performance of employees. In the content model, there are needs and there is a deficiency in those needs (Perry, 1993). Individuals all have internal motivation, and they are working in order to satisfy that motivation -- which relates to one or more needs. Satisfying that need is all these individuals require in order to be motivated, and the deep desire for need satisfaction will prompt them to continue to work toward goals that they are interested in achieving, no matter what else might be taking place in their lives or around them.

In the process model, how a person satisfies a need is more significant than simply whether that need is ultimately satisfied (Perry, 1993). How does the person feel about the way in which his or her need is being satisfied? Equity and fairness are important to people who operate on the process model. They may seriously want to get ahead, but if they have to do…

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