AC1.1
A description of the purpose of performance managements and its relationship to business objectives
Performance management is an imperative factor of how well an organisation does. It’s key the employees are aware and understands what the organisation expects from them and they have the resources and relevant skills and motivation to carry out their role. Performance management is all about ensuring employees make a positive contribution to the organisation focusing on the business objectives to ensure the organisation reach their goals and targets.
An example of how performance management and business objects link is, one of my organisations business objects at the moment is for us to start selling Equity Release. HR are putting some employees forward to do a ER course, once the employees have completed the ER course we will then subsequently reach one of our business objectives and will be able to sell Equity Release.
AC1.2
An explanation of the key components of performance management

I would say the first key component would be performance planning which is setting objectives for the department so the team know what is expected of them so they can work towards the objectives and reach the overall departmental goal.

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Communication throughout is a key component, regularly having 1 to 1’s with team members to ensure they are happy, motivated and do not require any additional support is crucial. This gives the employee a chance to raise any concerns, issues or ideas they may have.

Reward and recognition is another key component, the reward could be anything from an employee of the month award to a structured bonus scheme. Employees are always motivated by money, so this is a great way to keep them motivated and give them the recognition they deserve. If other employees can see their peers being rewarded and recognised for the hard work they do, this should also improve morale across the organisation.

Training & development is another key component, it is important employees have the knowledge and the skills to be able to the things you are asking of them. An example of training & development needs is recently the data protection law has changed and we now all need to ensure we abide to the General Data Protection Regulation, if the employees in your department are handling data they will need training on this to ensure they are abiding to the legislation.

Appraisals are another key component, this gives the manager a chance to praise good work and address any concerns. This gives the employee a clear understanding of how well they are doing and what may need to be done to improve. This also gives the employee a chance to discuss any training needs or any support they may require. Appraisals are key to performance management as you do find this motivates employees more.

AC1.3
An explanation of how performance management processes can affect staff motivation

The performance management process has an affect on staff motivation as if they are working for an organisation where you are rewarded for your hard work, this is going to make them work harder as it gives them a clear goal for them to work towards. If the employee can see the organisation tries to develop their employees, the employee will become motivated; as they can see if they work hard this can lead to extra training or opportunities to apply for higher roles giving them a chance to earn more money.

If the line manager or the HR department are doing frequent 1 to 1’s/appraisals with the employee this often motivates the employee as everybody likes to be told that they are appreciated and they work hard. This can also motivate the staff that may not be doing as well, as it gives them a chance to understand where they are going wrong and how they can improve.

AC2.1
Clarification of the purpose of reward within a performance management system
In an organisation the most valuable thing is the employees, so to attract, motivate and retain them it’s important if they work hard and do well they are encouraged and rewarded. This gives them recognition that are doing well and gives them a reason to keep improving and achieving. If you have a great bunch of employees your main focus should be to keep them happy, as you do not want them leaving and rewards are a benefit to the employees, if they are treated well they will not think about going elsewhere.

AC2.2
An exploration of the components of an effective total reward system and how a total reward system links to performance management
The first component of an effective total reward system would be company benefits; this can be anything from free car parking and free tea and coffee to personal medical care and bonus systems. This links to performance management because this all part of getting the best out of your employees. Company benefits can be engaging encouraging and motivating for employees.
Work life balance is another component, it’s important that you try and be flexible with employees and understand they have personal responsibilities, they may have children and may want to leave one day early for parents evening etc. They also may have medical appointments they need to attend. Or you may think of offering discounted gym memberships to your employees to ensure that they are healthy. All of these things ensure that your employee is happy and healthy which will mean they will work harder and hopefully have less time out of work.

Development will ensure that you retain your employees, it’s important you offer training and growth, as this will help the organisation reach their objectives and also the employees reach their personal goals too.

The total reward system links to performance management, as it’s important for retention purposes that the employee gets out what they put in. Therefore employees should be given a reward for hard work and dedication to the origination. The total rewards system makes the employee feel recognized and appreciated and helps motivation and dedication across the business.

AC3.1
An identification and explanation of at least five factors that need to be considered when managing performance

I would say the first factor that would need to be considered is what is the business trying to achieve. Once you have a clear idea of what the business needs to achieve and what direction it is heading in you will then be able to focus on how you need the employees to perform and what you need them to do to reach the organisations goal.
You then need to consider what the employee needs to do within their role to achieve this goal, for example in my organisation one of the goals is to recruit 20 new DA advisers by the end of the month however, the advisers work throughout the day and do not have time to speak to a recruitment network as they are focused on bringing their money in. So the DA business development manager will be working amended hours so she is able to contact these people to recruit them to achieve the goal.
You then need to consider do the employees have the skills and knowledge to fulfil their role and reach the organisations objectives and goals. They may not and you may need to arrange training for them so they are able to do their role confidently.
It’s important to consider the standard of performance you require from your employees so you can manage any performance issues and it’s also important the employees know the standards you expect so they are able to work to this standard.
The last thing to be considered would be when they are performance problems, what will be done and how will this be addressed and managed so moving forward the employee improves and the organisation is happy with their performance.