Reward and development are often overlooked as reasons to have a performance management process because they don’t solve immediate problems. The impact on motivation is even more neglected as a reason to manage performance because it is a ‘down the road’ consequence and it is not visible (unless you measure it). If we were all highly concerned about ‘down the road’ consequences, more people would stop smoking and drive more carefully! I touched on the subject in my last post when I indicated that a lack of reward and development impact morale, but I would like to unpack this a little more.

The impact of performance management on motivation

Let us take a step back and ask ourselves - what actually motivates employees. ‘Money, money, money’ I hear you say! You are absolutely correct, but I am going to suggest that there are other factors that influence motivation.

Hertzberg’s Two Factor Theory[1] separates ‘motivational factors’ from ‘hygiene factors’. Hygiene factors are the foundational requirements for an employee to feel valued e.g. salary, working conditions and status. If they are absent or undermined, the foundations of motivation will be compromised however they do not intrinsically motivate. Motivational factors include opportunities for personal growth, recognition for achievement and the freedom to make a difference or leave a mark. A recent study by the C.I.A. referred to in the Sunday Times Business Times[2] found that this is the case even with black talent where perceptions are that affirmative action has led to an increase in job hopping.

A 2004 Corporate Leadership Council (CLC) report entitled ‘Driving Employee Performance and Retention through Engagement’ reports that the top 50 ‘Levers of engagement’ (read motivation) include –

• Manager’s ability to provide career advice
• Employee understanding of connections between work and organisational strategy
• Manager is able to accurately evaluate employee potential
• Manager clearly articulates organisational skills

This is just a snapshot out of the top 10 and a good performance management process can influence all of these. In short and simple language; if you have good performance management processes and skilled managers that can deliver the process, then you will be able to articulate organisational goals, provide career advice and opportunities for personal growth etc. Once you have achieved these ‘levers’ then it is likely that motivation levels will be impacted positively.

Conversely, if you don’t have a process or skilled managers, it is unlikely that you will achieve these ‘levers for engagement’. Or if you do, the impact is likely to be scattered and it will be difficult to achieve consistent results. Be aware that it is not enough to just have a process – a process is only as good as the managers who implement it.

So in summary, if you want to have motivated and productive employees who are developed and rewarded according to their results, then you must consider an appropriate performance management process for your business with skilled managers to implement it.

[1] http://www.valuebasedmanagement.net/methods_herzberg_two_factor_theory.html, 13/9/06

[2]‘ Black job-hopping not all about the money’ Sunday Times Business Times, Sunday 28 May 2006, p.8