Sunday, December 22, 2013

Performance Management: Rewarding & Importance

In the last byte, we initiated a discussion on the underlying challenges in rewarding performance. In today's byte, we look at why rewarding or punishing a particular behavior is a key organizational decision.

If we were to ask our self (as representatives of an organization), bestowed with the responsibility of rewarding an employee - it would be important to begin with a thought on the impact of the decision we set out to make. We would require to realize that the decision we are about to make would affect many people throughout the system; it wouldn’t be limited to the person being rewarded or punished. When we choose to reward or punish an employee, the impact is visible not just to the employee in question but also all those around the employee - there is an element of learning that occurs as people watch what happens to the employee.

Allocation of the reward or the punishment would involve sequential decisions be made about which of the people to reward, how should one reward the employee, and also when to reward! These three dimensions of the reward decision pretty much shape how people in the organization behave.

The next time, we are in the scenario of taking a call on rewarding/punishing an employee we would need to remember - people watch what happens to their peers who make mistakes or have problems with any change in the system - this acts as a feeder into their own behavior. Think through about what message is sent through the organization.

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