APPRAISING AND

REWARDING
PERFORMANCE
MA. LOTA G. FIGUEROA MAGDALENA BAUTISTA
MPA Student Professor
“Managers should give constructive feedback to
employees, so that they can improve their performance.”
- Sherry E. Moss & Juan I. Sanchez
 Performance
Appraisal
Performance Appraisal is
the systematic evaluation
of the performance of
employees and to
understand the abilities of
a person for further
growth and development.
The supervisors measure the pay of employees and
compare it with targets and plans.

The supervisor analyses the factors behind work

performances of employees.

The employers are in position to guide the employees

for a better performance.
 Objectives of Performance Appraisal
•To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
•To identify the strengths and weaknesses of employees to place right men on right job.
•To maintain and assess the potential present in a person for further growth and
development.
•To provide a feedback to employees regarding their performance and related status.
•To provide a feedback to employees regarding their performance and related status.
•It serves as a basis for influencing working habits of the employees.
•To review and retain the promotional and other training programmes.
 Advantages of Performance Appraisal
•Promotion
•Compensation
•Employees Development
•Selection Validation
•Communication
•Motivation
1. Promotion: Performance Appraisal helps the supervisors to chalk out
the promotion programmes for efficient employees.
2. Compensation:  Merit rating is possible through performance
appraisal. Performance Appraisal tries to give worth to a performance.
Compensation packages which includes bonus, high salary rates, extra
benefits, allowances and pre-requisites are dependent on performance
appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance
appraisal helps the supervisors to frame training policies and
programmes. It helps to analyze strengths and weaknesses of
employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
3. Selection Validation: Performance Appraisal helps the supervisors to
understand the validity and importance of the selection procedure. The
supervisors come to know the validity and thereby the strengths and
weaknesses of selection procedure. Future changes in selection methods
can be made in this regard.
4. Communication: For an organization, effective communication
between employees and employers is very important
5. Motivation: Performance appraisal serves as a motivation tool.
Through evaluating performance of employees, a person’s efficiency can
be determined if the targets are achieved. This very well motivates a
person for better job and helps him to improve his performance in the
future.
 Performance appraisal is a
The Case necessary pre-cursor for
for performance related pay (PRP).
Performance Before merit-based pay can be
Appraisal awarded some estimate of the value
of the work performed by an
individual must have been done.
 This may include reference to targets set
The Case at previous appraisals and the appraisee’s
performance against these targets,
for barriers to achievement of such targets,
Performance training needs, immediate and future
career aspirations and the appraiser’s
Appraisal views on the levels of performance
attained by the appraisee allied to plans
for improvement and targets for the
coming period.
 Claims Made for Performance Appraisal
Systems
 Performance Appraisals Give Direction
 Performance Appraisals Give Feedback
 Performance Appraisals identify a reason for Training
 Performance Appraisals Allow Reward to be Related to
Performance
 Performance Appraisals Set Goals Which Motivate
 REWARD SYSTEMS IN THE
ORGANIZATION

The precise total reward system definition is

something that varies depending on where
you look. While each organization may define
it differently, understanding what it means to
your company will help you develop the
strongest system to meet your specific
objectives.
Josh Bersin of Bersin by Deloitte defines total
rewards as “the critical integration of an
organization’s approach to incenting and rewarding
its talent.”

Another definition is provided by WorldatWork. They

say that the total rewards model is “the dynamic
relationship between employers and employees.” 

HRsoft, define rewards as everything that total

compensation pay covers (including base pay,
bonuses, and equity), as well as benefits and any
other employee perks your company offers.
 For instance, if your goal is to reduce
turnover, your total compensation
package might feature outstanding
training and development
The reward opportunities.
system you use
will depend on
the types of If you’re trying to attract top talent,
outcomes you’re you might look at the demographics
trying to achieve. for the skillsets you’re targeting to
find out what those professionals
value most in terms of compensation.
 Compensation
Compensation refers to the various ways an employee
earns money from the company.

Benefits
Benefits refer to both mandatory programs and

Elements
employer options.

of a Professional
Development
Professional development encompasses a broad
spectrum of learning and advancement opportunities,
such as tuition reimbursement, mentoring and defined
Rewards Recognition
advancement tracks.
Recognition ranges from an individual

System acknowledgement of work well done to a formal

recognition program, such as an employee of the
month or year program.
Work-Life
Balance
Work-life balance refers to providing employees a
chance to meet their personal obligations or goals.
 Functions of Reward Systems
Job effort and performance. 

Attendance and retention. 

Employee commitment to the organization. 

Job satisfaction.

Occupational and organizational choice. 

How to reward, recognize, and encourage
strong performance
Financial rewards, such as merit increases and bonuses, are
often the first thing that come to mind as ways to motivate and
reward good performance. When financial rewards are limited
or unavailable, many people wonder what to turn to.

Research shows that using money as a reward for

performance often reduces motivation because it’s an extrinsic
reward. Instead, the most powerful motivators are intrinsic
rewards—personal enjoyment and satisfaction of making
progress toward meaningful goals.
 1. Stretch Assignments
Setting meaningful goals and making progress toward them is
highly motivating and evokes feelings of satisfaction and
engagement.

Challenging and meaningful goals will require your employees

to tap into their internal motivations to achieve their goal.
2. Coaching and Feedback. 
Regular feedback is one of the biggest
drivers of performance because it is how you
help your employee make progress toward
their goals and priorities on a day-to-day
basis. Feedback and coaching should, at
different times, address both positive and
negative behaviors.
 3. Greater
Authority. 
Give faculty and staff the authority
they need to ensure their work is
successful. Employees who are
trusted to make impactful
decisions respond with better
performance and engagement.
 4. Career Planning and
Support. 
Get to know your employee. Ask them about their goals and the type
of rewards they find meaningful.

5. Flexibility
Flexibility can be a reward for a job well performed, and many people have come to
expect flexibility from their employer.
However, if the work allows and your employee is meeting expectations, the
opportunity to work outside of normal business hours or the office can be rewarding
and motivating.
 6. Recognize good
work. 
Recognizing your faculty and staff should not be
a one-size-fits-all technique.
Find out how each of your employees would like
to be recognized. Some may prefer to be
recognized publicly, others are more comfortable
with praise during a one-on-one conversation or
a personalized note.
Regardless, affirming good work is sure to
encourage more good work.
 REWARDS
“Reward is benefits provided by
the employers, usually money,
promotion or benefits and
satisfaction derived from the job
itself such as pride in one’s work,
a feeling of accomplishment or
being part of a team.” – DeCenzo
and Robbins
A reward is basically a token of
appreciation, given by the employer to
the employee for his/her service to the
company. A well-designed reward
system motivates employees and
helps in building positive emotional
response towards the job. It also leads
to higher and better performance of
employees which has a direct impact
on the productivity of the company.
 Extrinsic and Intrinsic
Rewards
The variety of rewards that employees can
receive in exchange for their contributions of
time and effort can be classified as either
extrinsic or intrinsic rewards.
 Intrinsic Rewards
An intrinsic reward is intangible; it might be the
sense of satisfaction you get from mastering a
new skill or the successful completion of a
complex project or from working on a project
that has personal significance or meaning.
Often described as “self-administered” rewards,
because engaging in the task itself leads to their
receipt. It includes feelings of task
accomplishment, autonomy, and personal
growth and development that come from the
job.
Extrinsic Rewards
Extrinsic rewards are the physical ones that come from
an external source (employers) only.
Extrinsic rewards can be financial (a bonus, incentive, or
commission) or non-financial (praise, a training badge, a
development opportunity, or a coveted project
assignment).
Extrinsic rewards can also include intangibles such as the
ability to work remotely or an invitation to participate in a
mentoring program.
 Money and Motivation: A
closer look
A recurring debate among managers focuses on
the issue of whether money is a primary
motivator. Some argue that most behavior in
organizational settings is motivated by money (or
at least monetary factors), whereas others argue
that money is only one of many factors that
motivate performance.
Role of Money in Motivation
Money plays an important role in
motivation. Managements make use of
financial incentives for example wages and
salaries, bonus, retirement benefits, health
insurance, medical reimbursement, etc. to
motivate employees.
 Money will not always
Thus, we can say that
be a motivating factor to
people in higher
all people. To some
positions, who get
people, importance
higher monetary
money will be reduced
rewards, are not
after a certain stage. To
motivated by increased
those people, non
financial benefits. They
financial rewards are
may be motivated by
more important. They
money only if the
are motivated by money
increase is large enough
only up to the stage they
to increase their
are struggling for
standard of living and
physiological and safety
status in the society.
needs.
Money helps in satisfying the social needs of the
employees to some extent because money is often
recognized as a basis of status, respect and power.

According to Hierzberg in order to motivate the

workers, it is necessary to provide for the: satisfaction of
ego, social and self actualization needs. 
 Financial bonus is usually the key
part of an employee incentive Why rewards are
programme. It’s given to the
employee at the end of the calendar better employee
year, as a thank you and reward for incentives than
twelve months of hard work, hoping money?
it will encourage them to work
harder.
 REASONS:
Low impact – A financial bonus is often
Loss of value – An annual just transferred into the employee’s
bonus just comes with the job monthly pay packet, rather than presented
for some employees – it’s to them, and is quickly swallowed up in
expected and often included in a daily outgoings. The feel-good factor a
company’s benefits bonus gives can be short-lived or lost, as a
result

Demotivating – Employees usually

Not personal – A financial bonus is
have to wait until the end of the year
generic and unimaginative. Staff often
to receive a bonus, meaning any
receive the same amount of money at the
impressive work they’ve done mid-
same time, so might not feel individually
year can’t be rewarded in the same
appreciated
way and at the appropriate time
Companies should get a bit more creative
if they want their employee’s appraisal
and rewards performance feel valued and
appreciated – and get the most out of
them in return.