The byways of managing
performance and reward

It has taken an Australian to write the definitive guide to managing employee performance and reward. This is such a wide area, containing a range of disciplines, and there are so many approaches to be found in an international context, that it is only with enormous research and dedication that such a work can be achieved. Subtitled ‘Concepts, Practices, Strategies’, John Shields’ Managing Employee Performance and Reward (ISBN 978-0-52182-046-2) brings the academic and the practical together in five parts:

–          the fundamentals,

–          performance management in action,

–          base pay and benefits,

–          rewarding employee performance, and

–          fitting it all together.

 The book wears its scholarship lightly and I have never read a ‘textbook’ that is less black and white. To quote an example from a chapter on ‘Managing Behaviour’, which discusses behavioural assessment methods, Shields provides the following background:

 “In one respect, the history of behavioural assessment is best understood as the history of an unending quest for ever more accurate (i.e. valid and reliable) measurement methods. As the flaws in each approach have become more evident, new instruments have been developed in a bid to overcome these deficiencies. Yet the quest for the Holy Grail continues, and there is ongoing debate about which of the available methods offers the best solution to the general problems of validity, reliability and felt-fairness. The safest approach to

adopt here is that some methods will be a better fit for some strategies, structures and cultures than for others….”

While most of the research that is drawn on comes broadly from the Anglo-Saxon world, the experience of other countries via the Lincoln Electric example, in respect of performance incentives, is quoted as follows:

“Lincoln learnt about the importance of cultural fit the hard way. In 1993 it scaled down its operations in Europe and closed its plants in Brazil, Venezuela and Japan. The only new plant to which the incentive system was successfully transplanted was that in Mexico.”

The main conclusion to be drawn from Lincoln’s experience was that performance incentives can be used to support and reinforce cultural change but that the introduction of such systems itself requires cultural groundwork and preparation and, perhaps most of all, patience and persistence. Another more general conclusion is that, while performance rewards do have strong motivational potential, the key consideration is not whether they are applied but, rather, when, where and how they can be applied to best motivational effect.

I am always curious to see how benefits are viewed in the much larger context of reward and managing employee performance. Here, they fare well, with demographic and workplace changes cited as important factors behind the growth in benefits in some countries. The decline of extended family networks and the rise of a regionally and globally mobile workforce have created pressures for employers to support employees’ child-care and elderly-parent responsibilities. Rising workforce participation on the part of women has also added to the pressure for maternity leave, both paid and unpaid, particularly in Western countries. Longer working hours and higher levels of work stress have led to work–life balance programmes. Lastly, the dismantling of the Welfare State and the tightening up of eligibility conditions for social security in many countries have added to the pressure on employers to provide health and even unemployment insurance, together with greater retirement savings support.

From broadbanding to wellness programmes, what Managing Employee Performance and Reward provides in 600-odd pages is a balanced assessment, backed up by survey material and research, with warnings about the drawbacks and evidence of the positive aspects of certain courses of action. Every now and then there are pithy remarks like:

“... although motivation is one of the most closely researched topics in the social sciences, the wellsprings of motivation remain a matter of great dispute in Western management thought”.

The book certainly succeeds in its primary aim of providing a consistent framework for effective management practice. It also takes the reader down some interesting byways.                                                                  IStJ-B