Performance Management Systems and Motivation

Throughout this unit, you may be discovering new ways that organisations manage performance. How would you do it? Some may respond with a performance management system, and others may say a performance appraisal. While many may think they are the same, they are indeed different. Performance management systems are the processes that organisations use to analyse and develop the employees' skills and capabilities. Organisations implement these systems to improve employees' performance on a long-term basis. On the other hand, performance appraisals, also referred to as performance evaluations, evaluate the performance or the skills of employees. They are just one component of the performance management process. (Lussier and Hendon, 2013)

Many organisations align rewards within their performance management systems to motivate their employees. Rewards can be provided to employees that reach organisational goals, objectives and/or continually contribute to the organisational vision as demonstrated in their performance appraisals. The use of rewards focuses on both the extrinsic motivation (financial reward and benefits) and intrinsic motivation (employee recognition) of employees (Wilton, 2011). Yet, the use of rewards can have a negative impact by creating perceptions of bias and lack of fairness. Consider the impact that a rewards system may have on employees within your scenario organisation. In this Individual Assignment, you will analyse the relationship between motivation and performance management systems. You will also evaluate a performance management system in the context of your scenario organisation.