Managing Employee Performance and Reward Concepts, Practices, Strategies

Performance is a subjective, constructed and sometimes contested phenomenon, depending on whether it is approached from a prescriptive, descriptive or critical frame of reference. Thus, defining and measuring employee performance is not a power-neutral activity – this process is embedded in our assumptions regarding the employment relationship. How performance is defined and measured, by whom and for what purposes need to be critically examined when considering the shaping of employee behaviour. Performance measurement is typically approached from the employer perspective; far less frequently does the literature examine how employees make sense of managerially imposed performance measures (McLean 2008). Furthermore, there are both intended and unintended consequences of the measures we use. For example, as noted in chapter 4, ‘what gets measured gets done’ is a common observation. Thus, measuring routine behaviours will encourage routine outcomes. If we desire innovative employee behaviours we would need a different set of performance measures. The old saying that ‘what gets measured is what is easy to measure, not necessarily what is important’ suggests critical thinking regarding the measures we use. Crucial organisational citizenship behaviours, for example, are often hard to measure. Their absence in performance indicators may lead to unintended consequences such as lack of teamwork, or neglect of informal knowledge sharing within the organisation.

In Chapter 4, we focused on managing for results, especially through measuring performance outputs. In this chapter, we examine the assessment processes and techniques associated with the management of work behaviour, the strengths, weaknesses and criticisms of these assessment methods, and the situations in which each may be the most and least appropriate. In assessing the measurement of work behaviours, we consider sources of behavioural information, behavioural assessment methods and some common flaws in behavioural rating instruments. We also examine the competencies (inputs) of individuals that are related positively and causally to desired work behaviour and results. We examine the ‘competencies’ construct, discuss competency assessment and evaluate these assessment methods. While measuring individual performance is considered an orthodox human resource management practice, an important consideration to keep in mind throughout this chapter is: exactly how do measuring work behaviours and individual competencies shape subsequent behaviour?