This is one of a series of short blogs in response to questions asked at the seminar on performance management run by TimelessTime at the Let’s Do Business show in Hastings.
The first thing to recognise is that reward includes but is in no way limited to financial reward. Money can be a motivator (and hence can contribute to achievement of future goals) but all research suggests that managers should look at the plethora of other rewards.
Regarding monetary reward, we recommend that small firms do develop a pay structure. There is a presentation about pay structures here http://www.timelesstime.co.uk/av-presentations/pay-model-for-sme-principals/. The pay model should allow for competency based pay such that as an individual becomes more competent (and hence more useful and able to earn fees for the employer) they should be able to be paid more. It’s important that this is done in a structured fashion rather than simply in response to a claim or a desire for reward. This means that everyone in the firm understands that as they achieve (gain competency) they will be paid more.
Performance related pay can be implemented but great care is needed in designing the system if a system that pits employee against employee is to be avoided.
Most other rewards revolve around building the individual’s self-esteem. Examples include acknowledgement across the company of their success, giving of greater responsibility and the giving of new and exciting work.
When achievement falls short the manager must use the goal setting system to reinvigorate performance. We discussed this during the presentation on performance at Let’s Do Business, Hastings.