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Enhancing Workplace Productivity

  • 21 Pages
  • Published On: 20-12-2023

Performance management and its reviewing from time to time with proper rewards and recognition is necessary because performance management is that tool which encourages the employees and staff members to work better. In this unit assessment, the principles of managing the employee performance is measured and the role of the factors that affects and impacts the employee performances at workplaces. The assessment here will showcase what reward system will be helpful in evaluating the employee performances and how to recognise the performances. The approaches which will make the performance management process effective and efficient are also noted showing how much the rewarding and appraisal are important for motivating the employees. What tools, pay structures and strategies are implied by the organisations to ensure proper performance management is described. The detailed process of performance review step by step with all the determinants like timing, purpose, outcomes, risks, schemes, priorities and objectives of the performance management are also discussed.

LO 1: Understanding the Performance Management
Activity 5.1.1: Identifying the characteristics of a performance management system.

The performance management cycle is a typical continuous process of improvement that includes planning, measuring, and checking employee performances in workplaces. A performance management cycle helps in aligning all the goals of an employee with the goals of the organisation together so that both can be simultaneously achieved step by step. DeNisi and Murphy (2017) advised that the most essential and significant characteristic of the performance management cycle is that it should be performed continuously for a positive and improved result. The performance management cycle consists of certain stages in it which are as follows –



The first stage involves planning, organising and setting the job goals, employee goals and how to connect both of them for achieving side by side. The job description and work plan is created in the planning stage so that it can be made understood by the employees.


This second stage is responsible for keeping track and monitoring the performances and progress of the employees after every fixed interval so that there should not be fund any gap in their continuous improvement process.


Aguinis (2019) revealed that in the third stage of reviewing, the cycle reviews the employees’ work standards and accomplishments which were planned in the first stage for fulfilling and were analysed by the managers and the employees themselves too.


The next step is improving where the performance plan is improved according to the requirements and understanding the reasons behind the left loopholes and why the employees are not performing as expected to their optimal level. Here, the managers discuss with employees about the issue sand try to fix them by improving the performance management plan.


Measuring is the final stage where the correct type and number of measures were decided so that the gaps and issues identified in the performance management cycle can be remitted and desired results can be achieved from both the organisational and employees’ side.

Activity 5.1.2: Explaining the uses of specific, measurable, achievable, realistic and time-bound (SMART) objectives and priorities.

In terms of objectives, SMART is an acronym abbreviated as Specific, Measurable, Achievable, Realistic and Time bound is a tool to design the individual objectives set by the organisation to be productive and effective in the working manner. The uses of these components can be described as –

Specific – This determinant basically states that how the performance management will be performed by the employees with whom, how and for whom so that the objectives are planned specifically according to the requirements of the set goals and targets that needs to be achieved such as increase in the profit margin, sales growth and many more (Reed etal. 2017).

Measurable – This determinant is responsible for measuring that will the set objectives are capable of performing or not and if performed how much they can be effective in their results as compared with the past and current records such as sales graph, profit margins, revenue status and more.

Achievable – It analyses that the set objectives of the performance management cycle are achievable or not and to what extent. It identifies the required skills for achieving the targets set in the performance management plan. It reveals whether the employees are capable to achieve the set objectives or not.

Realistic – The major responsibility of the realistic determinant is to identify and analyse that the planned goals in the performance management plan are realistic to be attained or not by the employees. Some objectives of the plan may not be realistic in nature and resulting into no or less possibilities for accomplishment. Realistic determinant measures the amount of possibility and the level of responsibility that is required to achieve the goals (, 2020).

Time bound - This determinant assumes the time limitation or the time period that will be required to fulfil the set target because in every plan including the performance management plan also a fix or definite time period is essential. The time setting is important to achieve the best results of the performance analysis within an allocated duration.

Activity 5.1.3: Describing the best practices in conducting appraisals.

The performance appraisal conducting is beneficial specifically for the employers because it gives fair ideas about how every employee is operating in its own way and how they can be motivated more with the help of appropriate appraisals. These are some great ways to measure the potential abilities of both an individual and team (Hong et al. 2018). The best practices of conducting the performance appraisal process are –

1. There should always be separate rooms for individual appraisals because open appraisal sometime scan create conflicts

2. Trost (2017) advised that the practices must ensure that there should be a linking between the performance management cycle and the development, retention and succession plans since these linking explains that why specific people are more advanced than others

3. There should not be any kind of interruptions while the appraisal is being conducted since interference or interruption may cause gaps in the process

4. One of the practice is to link the performance management plan with the legally pitfalls associated with it like penalising the employees for taking any kind of legally protected leave (FMLA leave) or allowing any unlawful biasness in the performance management cycle of appraisal

5. Another most important practice can be enabling a second level reviewing of the performances before setting up the appraisals which can be conducted by either the HRs or by any second0tier management personnel

Activity 5.1.4: Explaining the factors to be taken into account when managing people’s wellbeing and performance.

While managing the performances and well-being of people there are certain internal and external factors that needs to be taken care of are like –

Relationships with colleagues and manager - Bakker and Demerouti (2018) advised that establishing a good and open relationship with the managers, leaders and colleagues are also a reason for being well in working environment affecting their performances too.

Emotions – The psychological status of the person is must to have a positive mind and soul for a higher performance and the feeling of being valued in the organisation adds t it.

Workload – In case of performance and well-being management, the amount of work assigned to the employees individually or to teams is a major reason which affects the mental status of the employees. So it is necessary that each and every employee must be assigned a limited workload as per their capabilities.

Support & Motivation – Franco-Santos and Doherty (2017) opined that dispirited and unmotivated employees and workers are complete failure for any organisation in this highly efficient and effective competitive world. Support and motivation are two main factors which can improve the performances of employees.

Health –Looking after the workplace environment and other factors are not enough to make employees productive but also maintaining their health condition and taking care of their health issues is a responsibility of the organisation.

Stress – Stress is a part of the daily routine in every people’s life and same as that the employees also needs to be stress free at least in the office premises s that they can work efficiently.

Activity 5.1.5: Explaining the implication of an organisation’s strategic objectives to performance management.

The performance management process and its objectives are interlinked with the organisational strategies with continuity that seeks to identify, measure and develop the overall work qualities of the employees. The five main strategic objectives of the performance management process are –

Setting up expectations for both employees & managers

The strategic objective focuses on setting an appropriate expectation standard for the employees and the managers as this will help both of the managers and the employees to follow the set standard and try to set new standards.

Encouraging employee empowerment

Smith and Bititci (2017) stated that the strategic objectives defines the goals of the performance management to the employees so that they can decide on their own that how to achieve them within the expected time and efficiency.

Communication strategies

Communication within the organisation whether from upward to downward or vice versa creates a link between the top management and the employees and workers, where the managers plays the role of a bridge between both of them

Identifying the areas of development

Training programmes and performance measuring tools and protocols are a common strategy that organisations applies in the workforce that helps in improving the performances of the employees and make them capable of fulfilling the organisational targets (Richards et al. 2019).

Positive incentives

Incentives in the monetary form and other benefits in the non-monetary forms are considered to be one of the best practices for performance improvement in employees and encouraging them to indulge in their responsibilities more deeply.

LO 2: Understanding Reward and Recognition
Activity 5.2.1: Describing the components of ‘total reward’.

The term total reward is that word which defines that whatever the employees receives from a company not only in monetary form but except that all the other forms of rewards they get. The total reward is categorised into two parts one is financial rewards and the other is the non-financial rewards. According to Fobian and Maloa (2020) these two components are responsible for covering all the types and kinds of rewards that a company can offer to their employees in regards of their good and improved performances towards company objectives. The components of the financial reward are – base payment, variable payment, share ownership offers, profit & other benefits. The non-financial rewards cover the recognitions, development of individual skills, opportunities achieved to grow and the quality of life standard hat is obtained from that job. Ganaie and Haque (2017) suggested that all these small and big components of both the categories of rewarding system together consists the total reward which an employee receives from the organisation in exchange of the quality work & hard work that he/she invest in the business organisation to archive the company goals within time. Companies, tem leaders, heads or managers when evaluating that how much and what type of rewards are given to each of the employees in any organisation; they then consider all of these components in their counting of the total reward package.

Activity 5.2.2: Analysing the relationship between motivation and reward.

In simple terms it can be said that rewards are able to create a loss of motivation among the employees mostly in those cases where the activities were intrinsically motivated. Motivation is said to be the managers’ action which results into influencing the employees’ behaviour at the organisation and that they must perform as required in achieving the targeted organisational goals (Antoni et al. 2017). These two determinants- motivation and rewards are said to be directly correlated with each other resulting into employees’ happiness where according to studies nearly about 86 per cent of the employees says that they feel prouder and happier when they are recognised at work and feel more satisfied with their jobs. So according to Coccia and Igor (2018), it can be presented that there is a prominent relationship between reward, motivation, recognition and job satisfaction. Two theories which will be best in describing the relation between motivation and reward are the Maslow Theory of Motivation and the Herzbergs Two-Factor Theory of Motivation.

According to the Maslow Theory of Motivation which was developed by Abraham Maslow in his 1943 paper and was named as “A Theory of Human Motivation” says that the level desires and the psychological needs of a person are taken into consideration when they are determined by the internal motivation of that person (Noltemeyer et al. 2020). This theory reveals that, there is a hierarchical system which is of five levels stating the needs of the rewards leading to motivation of people for accomplishing any task. The five levels are self-actualisation, self-esteem, love & belonging, safety needs & the psychological needs of a person where all of which contributes in their own way for establishing the relationship between motivation and reward.

Another theory which establishes the relationship between motivation & reward is the Herzberg’s Two-Factor Theory of Motivation which was developed by Frederick Herzberg, a behavioural scientist, who in 1959 proposed the two factor theory or in other words the motivator-hygiene theory. The two factors which are the significant dependants of the theory are- motivators & hygiene factors where in motivators some job circumstances are the deciding factors of the satisfaction and no satisfaction of that job and the hygiene factors are related with the no dissatisfaction and dissatisfaction elements (Alshmemri et al. 2017). As suggested by Herzberg, the opposite of satisfaction is no satisfaction and dissatisfaction is no dissatisfaction.

Activity 5.2.3: Explaining different types of pay structures.

In brief there are six types of different pay structures that exist in a company regarding the employee salary and others.

Job Family Pay Structure

In the job family pay structure, the grade or level status might differ from the other structure due to the characteristics of the job roles. Karpf and Mandel (2017) defined that there is unequal pay structure due to unequal job role and work role and responsibilities in the job family.

Job Family Pay Structure at different levels
Narrow-Graded Pay Structure
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This is a conventional pay grade structure sequel of the job grades which is slotted and divided equivalently in the broader basis. A narrow pay scale is different in each grade depending on the factors of the job evaluation scheme used in it.

Job Family Pay Structure at different levels
Broad-Banded Pay Structure

This pay structure is basically used as a tool to evaluate and construct the job grading structure system. It encourages more people to develop the broader employee skills reducing the promotional opportunities.

Broad-Banded Pay Structure
Spot Rate Pay Structure

This structure is the rate of a job role or any individual who doesn’t fits into any band or grade. Cox (2018) stated that a special individual grade is prepared for those which is known as the conventional grade structure which doesn’t allows any little scope also for any pay progression.

model of spot rate structure
Career Family Pay Structure

In this structure only a single grade structure is present for each grade employees divided into different job families like administration, HRM, IT, finance, operational and marketing.

model of a career-family structure
Pay Spine Structure

It is consisted of a series of various incremental factors and points that helps in stretching the pay scale from the highest to the lowest paid job roles.

a pay spine
Activity 5.2.4: Explaining the risks involved in the management of reward schemes.

In case of the rewarding schemes, there are a lot of significant issues, problems or risks involved in this management tool. Buchner and Wagner (2017) advised that although there is no doubt that the reward schemes are proven to be effective & efficient when handled properly. It is known to be the one of the least resected & liked activity in many companies due to the past history of negative experiences. The risk factors due to which this unpopular & misunderstood can be listed as:

a. There inconsistency in the acceptance of the rewards offered to the employees and a high risk where the employees might not appreciate the value of their total rewards (, 2019)

b. It is also possible that the quality of the rewards are not as effective to improve he work quality and if the rewards are felt to be unfair by the employees them its effect can be a major risk on their performance as it might demotivate them too

c. Another risk that rises often is the effects of unsatisfied reward system which hugely can result onto lack of productivity in work performance, poor quality target achievements and demotivated work ethics & morals

d. There is also a risk involved in the inability in communicating for the desired performance rewards and behaviours

e. If the rewards are not encouraging, motivating and engaging then the employees may not find them as they expected them to be

LO 3: Understanding how to carry out a performance review
Activity 5.3.1: Describing the purpose and timing of a performance review.

The man purpose of the performance review system is to conduct the annual performance evaluation and analysis processes so that so that the needed promotions, useful feedbacks about the job and the ole can be communicated properly to the employees. The performance reviewing is done to facilitate better working relationships between the employees and management and also to furnish the past and present records of the performances so that standards can be created contributing towards the professional and personal developments (Kambleet al. 2020).

It is said that timing in any affair is the main thing to keep it updated and appropriate. In many business organisations it has been seen that the performance reviews are performed yearly or quarterly or sometimes once in 18 months whereas some people do the reviews after each 6 months. According to Chen and Ran (2019) there are different patterns of performance reviewing system in different companies and also to mention that this time period is also dependent on the size of the company because, this reviewing also requires a certain time. So in a large scale company is quaterly or in 6 months gap period, reviews will be done then it will waste much time. So in small companies it is conducted in frequent time periods and in huge companies that gap is from 12 to 18 months. Although the best suggested time period gap by the experts is between 6 to 12 months.

Activity 5.3.2: Describing that how to conduct a performance review.

The performance reviewing also has its separate process that is must while conducting this program else it will be of no use if the proper reviewing is not done. The performance reviewing is basically a continuous process which has three main parts or elements in it which are:

First element consists of the regular general informal meetings where the discussion is done on the current work progress and developments of the employees. The offers and opportunities that are given to the employees to share their feedbacks so that their achievements can be recognised for further encouragement (, 2019). This meeting also consists of the identification of the problems and issues within the company.

The second element is the formal interim review process in which the discussions are about the progress achieved against the performance plan that is prepared in every company at the initial stages so that it can be followed.

The third element is the annual appraisal where the discussion is about the overall year work performances and the formal rating of those performances.

The continuous on-going performance reviews changes the objectives time to time and the tasks also depending upon which the reviews will be recorded grading the employees’ performance. This review impacts both the employees and the employers including the line managers too who keeps the records of the achieved performances and developments activities throughout the whole year that are known for setting the standards also (, 2018). Among all the steps the regular feedback is the focal point or can be said as the heart of the performance review management which makes this process go long and long.

Activity 5.3.3: Explaining the importance of recording the outcomes of a performance review.

The performance review outcomes are necessary and important because it helps to each side of the able where both the company and the employees get benefitted. It gathers the thoughts, notes the need of improvements to those who are working well. If the reviewing process is done correctly, it can be said as one of the best tool that can contribute in developing both the company and the employees’ future (Sakthivel et al. 2018). The continuous performance reviewing outcomes consists of the:

Monitoring & feedback - Liebowitz and Porter (2019) stated that regular monitoring & effective feedbacks of work are produced with optimum results by the managers gaining full understanding of the individuals’ weaknesses and strengths & employee observation.

Knowledge of rules & regulations - It helps to develop the knowledge of all the obligations, rules and regulations for both the employees and the management. The detailed knowledge of all the company rules and regulations will always help them to avoid making mistakes and conduct any illegal action (Hodge et al. 2020).

Employee motivation - It increases the employees’ motivation for succeeding in future career and gives them the required tools such as coaching and training sessions to further improving the skills and cultivates the course of actions (Sakthivel et al. 2018).

Performance disciplines - The best standards set from the overall performances works as examples to encourage the new employees to touch that level and also they can create new standards and they will always be aware to avoid making performance errors due to disciplinary actions. According to Liebowitz and Porter (2019), not only for company benefits but the performance reviews also are used by the employees for their self-evaluation of their own expectations regarding their organisational activities.

Evidence of targets achieved - One most important need is to note down the evidences of the targets achieved by the old employees. According to Esterhazy (2018), this evidence noting will help in supporting the moral boost of the new and junior employees to be rigid in setting up new standards removing the old ones and ultimately boosting the organisational success.

Disciplinary actions - When the disciplinary actions of the superiors and senior employees are recorded and furnished as the goals to be achieved by the remaining employees, it energises them with the help of rewards and also by the thought to be in that list of praised and prized employees (Hodge et al. 2020).

Goal setting - The past and historical recorded performances support in presenting the thoughts and ideas of how the organisational resources can be utilised to their best possible ways and how the wastage of those resources can be minimalized and further vanished for continuous improvements. Esterhazy (2018) noted that performance reviews outlines the shape of the new entrants by furnishing the previous milestone performances and setting their goals to be achieved in their job role.


The conclusion gathered from this assessment clarifies that performance management is a vital aspect of the employee management. The performance reviewing has separate process that is must while conducting this program else it will be of no use if the proper reviewing is not done. The total reward is categorised into two parts one is financial rewards and the other is the non-financial rewards. Total reward defines that whatever the employees receives from a company not only in monetary form but except that all the other forms of rewards they get. One main characteristic of performance management is it conducts the talent management system also with the tools used to motivate and encourage the employees by rewarding and praising the employees on continuous meeting of their set goals. Lastly it can be concluded that performance management is that process which is a continuous procedure that especially seeks to identify, measure and develop the overall work qualities of the employees so that regular changes can be brought for betterment and development managing the improvements.

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Performance Management Cycle Total Reward Components
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