reward and performance management



Here is Your Sample Download Sample 📩

Task 1


Companies have long recognized the significance of rewards in impacting the behaviour of employees. The principles of reward denote that employees are more likely to repeat desired behaviours in case they are adequately rewarded for doing so.  In other terms, in case the company desires personnel to perform at a higher level, they require to offer them with the incentives to do so. There is a wide range of rewards that companies can give to employees (Ali and Anwar 2021). These consist of financial rewards like pay, salary, incentives and bonuses and non-financial rewards like recognition, authority, etc. Organizations are required to carefully take into account what type of reward is highly adequate in different situations (Froese et al. 2019). The purpose of this task is to evaluate the philosophies of reward, the procedure to implement policy practices and initiatives, and distinct forms of benefits and then evaluate the input of intrinsic and extrinsic rewards towards refining the contribution of employees. Section 2 will discuss the business setting of the reward environment and legislative requirements that might impact reward practices. 

Section 1 – Influence of reward tactics and packages 

Principles of reward and its significance to corporate culture and performance management 

Rewards cover all fiscal provisions that the company makes to personnel that comprises of cash expenses and other perks. It may also cover broad supplies for personnel that may cover non-financial benefits. In relation to pay, it may cover static pay which is the definite amount to be paid to employees after working for a particular number of hours in the week. Variable pay may contain incentives, extras, and overtime pay (Spisakova 2019). 

There are various philosophies of rewards that must be applied as plans for the company. The reward procedure must build an optimistic and usual reward experience for the employees and the company. As such, personnel are more probable to reply, if a reward tactic is formed and delivered as per their likings (Perkins and Jones 2020). 

Rewards must be aligned with business objectives, in a win-win partnership. When the company rewards teams or individuals because of their direct support and accomplishments, it will benefit the company. They must be the extension between the outcome and the efforts in the manner that they inspire smart working. 

The administration must also incorporate rewards that offer tailored deals for personnel. It is adequate to use distinct gears of total rewards including variable pay, base pay, and progress prospects to fulfil the desires of employees (Bussin et al. 2017). It is significant to reward efforts with base pay, where administration provides commensurate salaries to personnel as a demo of their appreciated performance and competency. 

The reward strategy has various characters in the company. Initially, it aids in supporting the accomplishment of corporate objectives via the progress of a performance values that inspires higher performance. It aids in appealing and retaining the finest talent in the company that is substantial in company performance and acquisition of objectives. Also, rewards aid to inspire and win the involvement of personnel which is vital in endorsing better performance (Gulyani and Sharma 2018). By adhering to ideal reward principles, it turns out to be possible to encourage a culture that appreciate and identifies workers with excellent performance. By doing so, the administration instructs a performance-based culture amongst personnel that also aids in fulfilling the business objectives. 

Enactment of policy initiatives and practices 

In reward policy implementation, the pay strategy must be viable with the exterior labour market to retaining the best employees for corporate victory. The company can deliberate the pay pattern and provide an outline that values occupations and comprehends how they relay to one another inside companies and to the external labour market (Anwar and Abdullah 2021). There are several aspects and political deliberations that are to be considered for the policy to be successfully implemented. The procedure often relies on the extent of government accountability for implementing the policy. State and federal governments have distinct implementation methods that can influence the type and degree of regulation needed. 

There are three phases to implementing policy initiative – 

  • Ideation – At this stage, the initial idea for policy is generated. It can come from government agencies, legislators, the general public or interest groups. This stage may involve the evaluation of the performance of employees individually against the labour market. 
  • Enactment – Once the idea has been produced, it requires to be turned into regulations. The policy must be formulated and implemented on the basis of legal requirements like statutes on discrimination, and minimum wage rate. 
  • Enforcement – It is the procedure that ensures that people duly comply with the policy. The pay progression must be based on incentives and cash bonuses. 

Influence of people and organizational performance on tactic to reward 

While formulating the reward scheme, the firm might be impacted by organizational and individuals’ performance. The major objective of rewards is to encourage people to join the firm and hold them for a longer duration, while they make their best efforts in the firm. For instance, the behaviour of individuals might impact one to undertake specific verdicts on reward tactic. In earlier times, pays were used as a mode of attracting candidates to apply for the firm, while reimbursements aided in retaining them and inducements acted as motivation for them (Warrick 2017). However, it could be unlike in present times as individuals now focus on other assistances as means of reward other than just monetary incentives. The competitive level in the industry may also act as a crucial factor. Corporations that function in extremely competitive sectors might need to provide highly attractive reward packages to attract and retain top talent. The nature of work may also influence the approach towards rewards (Iqbal et al. 2017). For example, a corporation that depends highly on skilled labour is probable to position more emphasis on financial rewards as compared to companies whose operations are majorly dependent on unskilled labour. 

From a people perspective, distinct financial and non-financial rewards are used to attract, retain and engage them in work. This keeps on changing with time and depending on the labour market. In a few circumstances, few people might reflect the financial constituent as the major aspect of the reward scheme, that impacts the verdict in the reward approach. Whereas, few people might find to be keen to work at lesser rates, in case they have a stronger connection with the organizational performance and objectives (Manjenje and Muhanga 2023). Therefore, it can be claimed that the nature of the people with which the firm is dealing impacts the reward approach to choose. 

From the viewpoint of the organization, few employees might be highly concerned with performance as determining aspect towards the progress of the reward system. In such a situation, few employers might select the reward approach that is linked with performance to make sure that employees are fulfilling their objectives that inculcate towards the achievement of organizational objectives (Milliman and Clair 2017). For example, few companies may offer increments in salary or bonuses on the basis of outcomes of performance assessment that deliberates that reward is linked with organizational performance. 

Different forms of benefits offered by companies and their merits 

There is a broad range of assistances that companies can offer to employees. These include financial benefits like bonuses and salaries, non-financial benefits like paid time off and health or car insurance, and various other intangible benefits like career development opportunities, job satisfaction, etc. Financial benefits are the most important form of benefit for the employees. It is because they directly influence the capability of employees to support themselves and their families. They are extremely useful in motivating and rewarding employees for their effective performance (Ngwa et al. 2019). On the other hand, non-financial benefits can also act as important for personnel, specifically if they are not precisely compensated financially. These may include health insurance, paid time off, and childcare assistance. These may help the employee to feel highly valued and appreciated, and they can also enhance the motivation and satisfaction of employees. 

  • Healthcare and risk benefits – It is concerned with offering benefits to personnel to make sure about the protection of their productivity and welfare. The common forms of benefits under this covers employee assistance programs, occupational sick pay, life insurance, fitness programs at a discount, eye care programs, etc. (McLellan 2017). The advantage of this benefit is that it ensures that the welfare of employees is protected for effective performance. 
  • Pensions – This benefit is in stripe with the legal obligation that provides a superannuation package for personnel. The benefit of this approach is that it can offer shield for income in old age that can be claimed by the family members in case of the death of the member. 
  • Allowances – Few firms offer allowances to their personnel like car and house allowances. This tactic helps in relieving the employees from the load of meeting the cost of obtaining a car or reimbursing the house rent, thus, fetching a huge influence on their involvement and retention (Reddy 2020). 
  • Outings and day off – The companies may offer paid yearly leaves and outings wherein some may go the additional mile to surpass the least requirement highlighted in law. A few of the constitutional claims include paternity, maternity, and adoption. This approach has merit to create a sense of belongingness in personnel and also helps them to refresh for effective performance. 

Influence of extrinsic and intrinsic rewards on refining employee contribution and continued organizational performance 

Reward practices undertake a main role in enhancing the act of employees and accomplishing corporate objectives. Extrinsic rewards are normally tangible or financial rewards that include promotion, pay, bonuses, benefits and interpersonal rewards. They are regarded as extrinsic as they are exterior towards finishing the work itself and are measured by people other than the member of staff (Kolluru 2021). They are considered vital to jump-start preliminary buy-in or involvement of individuals in the initial phases of the willingness to change. They act as an influential lever to drive and reinforce the behaviours that philosophy values most but would not be the standard without. As such, the companies can use them to aid in reinforcing the performance of the organization without essentially impacting the culture of the company. Extrinsic motivation can be applied to organize the resources by connecting the financial motive of employees with the organizational goal. However, the employees who follow purposes for extrinsic motives like status, money or other aids are less probable to accomplish their objectives and are less contended even if they do accomplish them as they sense that the objectives are less meaningful for them (Emmanuel and Nwuzor 2021). Such a situation may direct the extrinsic rewards as less operative in the company if they do not successfully accomplish the rewards environment. 

Whereas, intrinsic rewards are the psychological reward that is experienced directly by the employee like responsibility, autonomy, achievement, personal growth, complex work, challenge and feedback. They are regarded as intrinsic because they are interior to the work being completed and accomplishing them hugely relies on one's exertion. They are important to sustain behavioural change and these can be shaped by enabling personnel to do more self-managing and accumulating worth to their work by problem-solving, innovating and inventing (Mdhlalose 2022). When any employee accomplishes a fundamental reward, there is an optimistic emotional response. The intrinsic rewards enhance and inspire both employers and employees to be talented to test themselves and achieve new responsibilities and collaborate with others to perform in accord setting. Apart from this, intrinsic rewards allow the person to have superior focus and keep them self-managing and stimulating. By ensuring greater stages of intrinsic rewards, personnel become casual recruiters and pushers for the company wherein they indorse their friends’ groups to work in the company and suggest goods and amenities to probable customers (Hadziahmetovic and Dinc 2017). The study recommended that companies pay employees impartial salaries, not linked to performance, to fascinate and assure involvement and to depend more on basic motivational methods to enhance performance. 

Section 2 – Benchmarking data to inform reward approaches 

The business setting of the reward environment 

The formulation of any reward structure is impacted by the upshot that it has on company. It indicates that the company undertakes account of the effect that the reward system will have on the productivity of personnel and overall business. Few corporations might offer monetary compensation while others might provide non-monetary rewards like time off, flexible working hours, or training for specialized development. It is substantial for corporations to comprehend what matters most to their workforce and to adapt their rewards according to that (Austin-Egole et al. 2020). Firstly, the reward system must reward the behaviour and value of employees such that they improve performance. Moreover, it must fit with the HR strategies, development practices and people management within the company. The reward setting formed by the company must generate value for the present and future personnel to promote higher business progress in a justifiable way. 

From the perspective of business, the formulation of a rewarding environment is to appeal and hold the finest talent. Due to the cost impact that rises from engagements, it is significant that the company undertake a cost-benefit study. For this, the administration must consider the cost of rewards versus the benefits in the form of performance enhancement (Pandita and Ray 2018). It is also substantial for corporations to remain up-to-date with the latest research on motivating employees, as it can aid in creating highly effective reward strategies. 

Appropriate ways where benchmarking information can be collected and measured to form insight 

The benchmarking facts can be gathered with the help of employee surveys and can be quantitatively analyzed in order to form more insights in regard to how companies can improve their performance. The data can be collected from different organizations including investigation organizations (Reddy and Lakshmikeerthi 2017). Other entities to collect benchmarking data comprise of audit firms like Deloitte. For instance, Deloitte directed benchmarking study and observed prominent trends in reward systems – financial well-being, social well-being, physical wellbeing and emotional well-being. Another path to collect benchmarking data is focus groups. It encompasses bringing a cluster of employees in an organized way to deliberate a specific topic. 

A few of the measures are helpful in determining the efficacy of benchmarking like level of staff satisfaction, turnover rate, workforce composition, profit level, reward projected costs, efficiency per employee, sales growth, and economic worth addition (Levenson 2018). Such constraints are used to evaluate the impact of the reward structure and form grounds for benchmarking. After the insight has been developed, it can be applied to inform reward approaches. For instance, if case data resembles that employees are mostly inspired by recognition, then corporations might desire to consider the implementation of a recognition program. 

Organizational reward packages and approaches based on insight 

Customize rewards for individual employees – Every employee is different, so it becomes imperative to customize rewards packages, particularly for every individual employee. It may involve considering things such as skills, job roles, and accomplishments. 

Remain creative with rewards – There are various distinct forms of rewards that companies can use like paid leave, bonuses, vouchers and days off with pay. It is substantial to remain creative and select rewards that are meaningful to employees (Agbenyegah 2019). 

With relation to non-financial rewards, it has been found that a large number of employees are forecasting to raise their outlay on such aids. On the basis of such insights, the projected reward package also incorporates developmental aids that cover the business apprenticeship and mentoring programs. 

Moreover, the pension act as a major reward tool for the present generation and thus, is united into this set. In such a scenario, the company can surpass the least statutory obligation in a bid to stay viable in the labour marketplace. Moreover, insights are gathered on the usage of house or car allowances. It is a shared phenomenon that is logged as a trend and thus adequate for the present reward package. Other benefits that seem adequate based on insights offered include training and career development, children vouchers, and occupational sick leave (Marin 2021). The importance of worker assistance programs is also depicted in the benchmark data. The use of the work-life stability approach also acts as part of the shared trend in the present workforce and thus is covered in the benefits to the company. 

Legislative Requirements that impact reward practice 

There is a wide range of legislative requirements that influence the reward practice in the UK.

  • Equality Act 2010 – This act forbids discrimination on grounds of certain protected attributes like disability, age, marriage, gender relocation, pregnancy and maternity, civil business, sex, religion and sexual orientation (Fell and Dyban 2017). It indicates that organisations cannot discriminate the employees on these grounds for things such as benefits, pay, or promotions. 
  • National Minimum Wage Act 1998 – Every company is obligatory to fulfil the lawful minimum wage needs and account on the gender pay gap and managerial pay ratio. This move is envisioned at making sure that there is justice in reporting and payment (Manning 2021). 
  • Employment rights act 1996 – It fetches employees with various constitutional rights like the right to acquire written statements of employment specifics, the right to appeal flexible employment hours and the right to take compensated leave for particular purposes. 


It can be concluded that an effective and well-designed reward system directs the company towards greater productivity and employee satisfaction. It has been analyzed that reward management is the procedure of formulating, creating, executing and controlling the reward system in the firm that aids in maintaining and improving organizational and employee performance. It acts as the strategic tactic towards incentivizing the staff to enhance performance, self-esteem and engagement. It rewards personnel as per the standards of the business and that they are prepared or are capable to fund. 

Task 2

Introduction to performance management 

Performance management is the system designed to determine the ways to accomplish corporate goals through continuous assessment and feedback directly to the improvement of the performance of employees. It acts as the means of getting effective results from teams, organizations and individuals by understanding and handling their performance within the outline of planned objectives (Mone et al. 2018). 

Evaluation of distinct approaches to performance management 

  • 360-degree feedback – It is the multidimensional performance management method that assesses the employee with the help of feedback gathered from the circle of influence of the employee namely peers, executives, consumers and direct reports. This process will not just remove partiality in performance appraisals but also provide a clear understanding regarding the competence of individuals, but it might be seen as difficult and intrusive to implement (Fleenor et al. 2020). 
  • Performance roadmaps – In addition to placing KRA (Key Result Areas) and assessment parameters in position, companies must set clear performance roadmaps for all teams. The performance roadmap for the specific employee must have elements such as objectives that the company desires from employee to accomplish within the described period, milestones that may direct to said objectives, an action plan that may aid in accomplishing the milestones and goals and KPIs that will aid in measuring the employee performance (Chowdhury and Chowdhury 2019). 
  • Ongoing feedback is regarded as a highly consistent tactic to performance management, wherein feedback is offered on a steady basis like monthly or three-monthly. It can be advantageous in keeping the employees on track and making sure that they are achieving their targets, but it may also be time-consuming for managers. 
  • Performance review meeting – It is the dignified assessment wherein the manager happens the employee and deliberates strengths and weaknesses, offers productive feedback and collaboratively set the objective, KPIs and smart purposes of the subsequent year together with comparing results of last year and recognising the development of the employee. The major advantage of this is to enhance the performance of employees, and it is obliging for personnel as it shows what is being projected from them and offers them the prospect to deliberate on their accomplishments. However, it may create a undesirable experience for employees in case not done properly. It is time-consuming and question to biases. 

Role of people practice in supporting line managers to undertake consistent and adequate reward decisions 

The role of the human resource department in supporting line executives is to offer them effective tools and train them on how to effectively use them to better accomplish desired results. The initial step for HR is to support line managers by offering eligibility and criteria lists to executives and presenting the tool with sufficient training on how to execute, then ensuring to uphold principles of fairness, transparency and consistency (Van Zyl et al. 2017). Secondly, they require a climate that is nurtured by senior administration that inspires gratifying people management tasks.

Another role of HR is to offer insight into rewards data and teach managers on updated information regarding non-financial and financial rewards like training, remote working, and developmental prospects and to inspire the line executives to undertake possession of the procedure and to interact with the outcomes to the subordinates (Tirta and Enrika 2020). The role of people management may also include providing sustenance in case any dispute might rise during the entire procedure and ensuring that it is going easily with no confusion. 

Overall, HR must ensure that the line executives comprehend the overall reward approach of the corporation and offer the right sort of technology that is up-to-date and ensure that they are well-trained with very effective communication procedures. 

Ways in which the line executives make reward judgements based on administrative tactics to reward 

The line managers undertake reward judgements in distinct ways. Initially, they are tangled in periodical and annual appraisals, wherein they involve with staff to comprehend their capabilities and evaluate their performance. Though the methods of operational performance-based pay might vary across companies, line managers undertake a critical role in regard to the effective execution of the system in position. For instance, a line manager can set performance standards, undertake decisions regarding valuation, communicate the outcomes and many more. Throughout this procedure, there are various areas of probable complexity (Kurdi-Nakra and Pak 2022). 

They can gather data on employees using distinct resources and tools that are linked with performance valuation. For instance, they make an assessment of performance based on KPIs that might measure the employees’ productivity against the defined objectives. Other tools like 360-degree feedback can also be used that enable a more comprehensive review of the performance and ability of employees. They also offer repetitive response on personnel which is the major tool in offering required decision on rewards. For illustration, they may offer a performance review for each employee, within their direction, which is crucial in offering judgement on employees. They may also frequently check on staff determining those suffering any challenges, thus they are capable to undertake adequate judgement. 

The line manager must use the strategies offered by the HR division beginning from processor assessing performance that will aid in guiding them and form a outline for the procedure of judgement, possessing in mind that it must bring into line with the beliefs, standards and code of ethics and is inside budget to keep cost rational (Fuertes et al. 2020). The decision of the line manager over reward must have a positive effect on employee withholding and also the attraction of future applicants and a sense of fairness both internally inside the company and externally within the market. Finally, the judgement must be based on actual data gathered from salary surveys or competition that are offered and always in alignment with legislation that is there in the nation. 


Performance management is a complete set of actions that are besieged towards accomplishing corporate objectives. There are a number of tactics that are followed in the performance management process and such approaches aim at maximizing the contribution of employees towards the organizational objectives. HR must offer insights on rewards data and teach line managers regarding both monetary and non-monetary rewards. 


Agbenyegah, G., 2019. Effect of financial and non-financial rewards on employee motivation in a financial institution in Ghana. International Journal of Innovative Research and Development8(8), pp.121-130.

Ali, B.J. and Anwar, G., 2021. An empirical study of employees' motivation and its influence on job satisfaction. International Journal of Engineering, Business and Management5(2), pp.21-30.

Anwar, G. and Abdullah, N.N., 2021. The impact of Human resource management practice on Organizational performance. International Journal of Engineering, Business and Management (IJEBM)5.

Austin-Egole, I.S., Iheriohanma, E.B. and Nwokorie, C., 2020. Flexible working arrangements and organizational performance: An overview. IOSR Journal of Humanities and Social Science (IOSR-JHSS)25(5), pp.50-59.

Bussin, M.H., Pregnolato, M. and Schlechter, A.F., 2017. Total rewards that retain: A study of demographic preferences. SA Journal of Human Resource Management15(1), pp.1-10.

Chowdhury, R. and Chowdhury, R., 2019. A holistic approach to employee engagement. Systems Thinking for Management Consultants: Introducing Holistic Flexibility, pp.269-304.

Emmanuel, N. and Nwuzor, J., 2021. Employee and Organisational Performance: Employees Perception of Intrinsic and Extrinsic Rewards System. Applied Journal of Economics, Management and Social Sciences2(1), pp.26-32.

Fell, E.V. and Dyban, M., 2017. Against discrimination: equality act 2010 (UK). The European Proceedings of Social & Behavioural Sciences (EpSBS). Vol. 19: Lifelong Wellbeing in the World (WELLSO 2016).—Nicosia, 2017.192016, pp.188-194.

Fleenor, J.W., Taylor, S. and Chappelow, C., 2020. Leveraging the impact of 360-degree feedback. Berrett-Koehler Publishers.

Froese, F.J., Peltokorpi, V., Varma, A. and Hitotsuyanagi‐Hansel, A., 2019. Merit‐based rewards, job satisfaction and voluntary turnover: moderating effects of employee demographic characteristics. British Journal of Management30(3), pp.610-623.

Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R. and Sabattin, J., 2020. A conceptual framework for the strategic management: a literature review—descriptive. Journal of Engineering2020, pp.1-21.

Gulyani, G. and Sharma, T., 2018, June. Total rewards components and work happiness in new ventures: The mediating role of work engagement. In Evidence-based HRM: A global forum for empirical scholarship. Emerald Publishing Limited.

Hadžiahmetović, N. and Dinç, M.S., 2017. The mediating role of affective commitment in the organizational rewards–organizational performance relationship. International Journal of Human Resource Studies7(3), pp.105-130.

Iqbal, S., Guohao, L. and Akhtar, S., 2017. Effects of job organizational culture, benefits, and salary on job satisfaction ultimately affecting employee retention. Review of Public Administration and Management5(3), pp.1-7.

Kolluru, M., 2021. Association between rewards and employee performance: An empirical research on Omani banks. Corporate Governance and Sustainability Review5(1).

Kurdi‐Nakra, H. and Pak, J., 2022. Exploring the socio‐political dynamics of front‐line managers’ HR involvement: A qualitative approach. Human Resource Management.

Levenson, A., 2018. Using workforce analytics to improve strategy execution. Human Resource Management57(3), pp.685-700.

Manjenje, M. and Muhanga, M., 2023. Financial and Non-Financial Incentives Best Practices in Work Organisations: A Critical Review of Literature. Journal of Co-operative and Business Studies (JCBS)6(2).

Manning, A., 2021. The elusive employment effect of the minimum wage. Journal of Economic Perspectives35(1), pp.3-26.

Marin, R., 2021. Rewards management in organizations: a retrospective on what organizations have set out and achieved in order to identify future actions. The Journal of Organizational Management Studies2021, p.642473.

McLellan, R.K., 2017. Work, health, and worker well-being: roles and opportunities for employers. Health Affairs36(2), pp.206-213.

Mdhlalose, D., 2022. The Innovative Employee: The Assessment of Reward Equity on the Predisposition to Make Creative Contributions through Literature Review. Journal of Human Resource and Sustainability Studies10(3), pp.433-448.

Milliman, J. and Clair, J., 2017. Best environmental HRM practices in the US. In Greening People (pp. 49-73). Routledge.

Mone, E.M., London, M. and Mone, E.M., 2018. Employee engagement through effective performance management: A practical guide for managers. Routledge.

Ngwa, W.T., Adeleke, B.S., Agbaeze, E.K., Ghasi, N.C. and Imhanrenialena, B.O., 2019. Effect of reward system on employee performance among selected manufacturing firms in the Litoral region of Cameroon. Academy of Strategic Management Journal18(3), pp.1-16.

Pandita, D. and Ray, S., 2018. Talent management and employee engagement–a meta-analysis of their impact on talent retention. Industrial and Commercial Training.