Performance Management Systems and Employee Motivation

Introduction

Managing performance is a wide, overarching concept. It can be used to manage the performance of a person, a department, a company, or even a particular process. Performance management systems are a part of human resources, and they are used to ensure goals are met. Those goals need to be met both efficiently and effectively, or the company will suffer. Monitoring employee performance is more complicated than just making sure that employees are working designated hours. What those employees are doing and how they handle and manage their time are both highly significant when considering the bottom line of the company.

What causes a person, company, or department to perform in a way that pleases both the employees and the bottom line? Incentives. The employees must feel as though they are getting something for the work that they give the company — and often that "something" must be more than just a paycheck or benefits.

While being well-paid for one's work is important, and benefits like health insurance can also greatly affect how a person feels about his or her job, employees generally need things that matter to them and that will be part of their lives for a long period of time. Overall, each employee is different, and it can be difficult to determine the best choice when it comes to offering performance incentives. Companies have to make money, but if they strive to give their employees what those employees need, the companies can often more than offset the costs of the benefits they provide. Performance management is the term that encompasses this, and it has been in use since the late 1970s. It addresses technology that manages results and behavior — both of which are critical elements when considering performance. In order to use PM technology, however, a person or company must know how to obtain the desired results and behavior, and that requires a study of motivation as it relates to employees.

The Background and Definition of Performance Management

Performance management is most commonly seen in a work environment, but wherever people interact with one another, PM can be used. This includes community meetings, schools, churches, sports teams, political settings, and more. When people interact with each other and their environment to produce a desired effect, PM can come into play — and most people do not even realize it. In 2000, Austin and Carr identified PM as an approach that was both integrated and strategic, and that increased an organization's effectiveness by raising the performance level of people who work in those organizations and by developing capabilities in both individual contributors and teams.

Getting all of the employees in an organization to reconcile their personal goals with the goals held by the organization is something that truly is possible when PM is used. This is part of what is called the self-propelled performance process (SPPP). In order to get everyone "on the same page," a mission statement is needed for each job and an analysis of commitment to that job must be undertaken. In the mission statement, it is important to include the purpose, product, scope, and customers. By creating a strong and complete mission statement for each job, the organization will be able to identify the performance standards and key objectives for each position. The organization can then better determine what kinds of incentives can be offered to employees in order to ensure that those employees work hard to meet the objectives and standards of the job to which they are assigned.

When an organization dedicates itself to the performance of systems or the management of employees, it is able to create an effective delivery of both operational and strategic goals. The correlation between the use of PM software or programs and improved business results is too strong to ignore. Integrated software can provide information much more quickly than a spreadsheet-based system, and that can offer a return on investment (ROI) that is highly significant for any business. Both direct and indirect benefits appear, and those benefits can be adjusted and manipulated in a way that will allow greater enjoyment for employees and a better bottom line for the business. When PM is used correctly, it is much easier to see the potential in every employee's workday. That can produce benefits such as growth in sales, a reduction of organizational costs, and a decrease in the time it takes to make important changes.

The value of a motivated workforce cannot be overemphasized. When employees see how they are directly contributing to the company, and when they are being rewarded for that contribution, they want to work harder and do more than they otherwise would. While PM can be used to study performance and discover ways in which employees can do things differently to make the company — and, therefore, the employees — more profitable, the employees must first be motivated in order to do a good job. If there is no motivation, there is little point in addressing PM because the employees are not likely to embrace what the company is attempting to do. Fortunately, employee motivation is something that has been extensively studied. In order to fully understand PM and its broad definition as a function of human resources, motivation must be addressed and explained.

Motivation in the Corporate World

Originally, it was only the corporate world that looked at its employees in ways that included more than just how those employees were being paid. However, that trend is now spreading beyond corporations and into sales and other industries (Bedeian, 1993). Because that is the case, and because managing the performance of employees is much easier when employees are motivated, it is important to examine trends in compensation and how those trends are being used to help ensure that companies around the country and the world are able to continue motivating their employees and growing their bottom line. A reward system for all employees is one that will track employee progress while also helping employees be more productive, remaining in line with the mission held by the company or the industry as a whole.

Mostly, the mission of a company has been straightforward: to produce high-quality goods and services, provide strong customer service, and maintain a professional and dedicated workforce. That is easier said than done, of course, but it is also something that can be accomplished and measured. If employees are not properly compensated for the work they are asked to do, it is very unlikely that those employees will provide the company with the dedication it is looking for in terms of work ethic and customer service. The company will then have two choices: let the employees go and hire new ones, or find ways to motivate employees to deliver what the company is looking for. The right kinds of compensation opportunities can dramatically increase profitability for a company, and the performance management program will show the growth and development of the bottom line more rapidly than in the past.

The motivation of employees does not come easily. Many people want to work because they want to be paid, but they find that they are only interested in the paycheck and benefits. They continue to do what they need to do to avoid losing their job, but that is the extent of their commitment to the organization. That lack of commitment can be seen in performance management, when it becomes clear that productivity is not what it should or could be and that employees are not dedicated to doing everything they can to move the company forward. In short, the goals that the employees have — taking home a paycheck — are not the same as the goals held by the employer — growing the business, expanding the bottom line, and so on.

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 alone, 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. They are all individuals with a desire to be recognized. They have goals that may not match up with the goals of the organization for which they work, but they may also have goals that are similar in nature to those of the company. Has anyone asked them what they really want to do with their lives and how the company can help facilitate those ambitions? Companies that are concerned about the health and well-being of their employees can help themselves and their employees by searching for common ground within job descriptions and allowing employees the freedom to grow and develop. The more an employee can do, the more of a benefit he or she will be to the company.