Solution/Answer

Part 1

1.1 Purpose of Performance Management and Relationship to Business Objectives

Employees competencies and performance– Through an active performance management, all employees learning needs are evidenced. This feedback is applied as a guide to improving learning development practices of the employees and to create fresh goals and objectives. By foster of the skill and competencies, pursuing various goals become easier.

SMART Organisation objectives and alignment to employees goals– In line with the SMART objectives development, they guide an entity practice. Through performance management, it is possible to evaluate if the entire objectives have been achieved. Additionally, for the SMART goals, all the employees expectations are successfully attained.

Taking into account of the Saudi Customs organisation, the core objective of this organisation is ensuring they offer high-level quality financial services in Saudi Arabia. In this regard, by successfully putting in place relevant performance management strategies for their staff, they customise their objectives achievement on this background. Particularly, in today COVID-19 pandemic, by embrace of performance management, their employees commitment, motivation and satisfaction in their roles has been harnessed double-fold.

1.2 Effective Performance Management System Components

The existence of performance management components is informed by the view that engaged teams in employees management ought to achieve high-level performance as part of their development. These components are applicable to holistically improve and delivery organisation services, achieve capacity development and inclusion. Components include;

Personal Development Plan– This entail setting measurable learning goals for an organisation and identifying the resources to be applied within a particular set time (CIPD, 2020). The relevance of this is guaranteeing employees becoming increasingly motivated which guide how resources are allocated in their capacity development and achieving their organisation objectives. In performance, consistently achieving different objectives is a significant determinant of individual employees competency.

Mentoring and coaching– The obtained feedback as part of performance management is applied to aid mentorship and coaching strategies. This is for setting sustainable employees competencies. Also, by address of personal learning needs, it is possible to guarantee an improved performance with all objectives achieved. In line with CIPD (2021), success in the employee engagement is important to promote performance management which target setting of more personal issues, performance improvement, growth and development.

Performance based remuneration– This component is identified as guaranteeing the employees appropriate pay on basis of their performance. The pay to employees is by financial and non-financial strategies. According to CIPD (2021a), this is a type of Total Reward System which is inclusive of bonuses, benefits, employees recognition and career progress.

1.3 Performance Management Link to Motivation

A successful performance management in any organisation is associated with an increased motivation. The rationale of this is that from the different identified components of performance management in the previous section, they are core determinants of motivation.

To demonstrate the link the Maslow Hierarchy of Needs Theory (Hopper, 2020) is applicable. The theory is anchored on the view that employees motivation could be attained by prioritising on their safety, cultural background, self-actualisation, psychological and self-esteem needs. An appropriate instance is for attainment of individual set goals, psychological needs need to be granted. A case example is in Saudi Telecom organisation where employee motivation is achieved by ensuring their social needs are met with all stakeholders engaged in their operations. Additionally, in context of Saudi Telecom, this theory is similarly applicable by management in offering rewards and praising employees which boosts their self-esteem levels. The rationale behind the strategy is gaining a feel of appreciation by their entity and HR. Self-actualisation on the other hand is attained by management leveraging on achievement of the difficulty functions for the employees and sharing engagement for decision making hence voice prioritisation.

Further, the Vroom’s Expectancy Theory (Soyoung & Sungchan, 2017) is applicable in highlighting the link of performance management and motivation. In this theory, it note that an individual decision making is harnessed by presence of various alternatives and need for minimising scope of pain in maximising pleasure. To manage entire expectations and to boos performance, personal results include skills motivation, knowledge acquisition, capability development and experiences. Through employees active execution of set PDP objectives, the L&D strategies, performance-based rewards are attained hence motivated. A core factor in this theory is noting that performance improvement leads to attainment of best results. Through an embrace of performance management strategies, a set of results are attained. For the Saudi Telecoms case study organisation, employees are applied to appreciate the success of their performance management, decision making holistic, transparent in results achievement and set practice.

2.1 Factors considered when managing employee performance, both good and poor

According to CIPD (2020), in performance management, it is essential considering both strategic HR function initiative used for guiding employees success in their roles. A detailed integration of entire factors demanding good direction, sourcing prompt feedback and development successfully evident. Particularly, performance is either good or bad and informed by set of approaches put in place with outcomes review on sight.

Good Performance

Lacking Adequate Rewards– for this factor, an organisation which lack sufficient rewards promote good performance. The rationale for this is ensuring rewards are matching personal employees performance goals. For Saudi Customers, pay and benefits are both monetary and non-monetary.

Lacking Equality– Equality is promoted in overall performance management practices albeit of presence of people diversity (age, gender orientation, religions background and nationality). Therefore, gains and opportunities in an entity are well managed with immense equality and performance-based attained. For the case of Saudi Customs, their capacity development and performance appraisals are used amongst the employees with less basis.

Poor Performance

Lack of capacity to differentiate capabilities (can’t do) and conduct (won’t do)– In line with the requirements of the CIPD Code of Conduct (CIPD, 2021b), the performance of the staff are promoted by embrace of confidential information and improving performance. Guiding of this process for capability in an entity could not be holistic and lack capacity to implement entire factors and selection prioritising areas and eventual implementation. For Saudi Customs case, embrace of supportive culture is the case ensuring staff facilitation with detailed and holistic skills in alignment with earlier noted learning needs.

Appropriate leadership inexistence– A lower level of employees inclusion in making critical organisation decisions means lack of a good leadership. Leadership success ought to be part of specific business environment sectors where an entity operates. For Saudi Customs case in KSA financial sector, management and senior administration need to offer detailed feedback informed by evidence sourced rather than being opaque and holding some of the information.

2.2 Data required for individuals in review and involved in performance and reward management processes/systems

Purpose of Performance Management and its Relationship to Business Objectives

According to ACAS (2017), organisation management primary role in evaluating the attainment of their existing goals through implementing strategic performance review with active facilitation of entire organisation operations. To attain all the set objectives, performance management objectives include the following;

Improving the Employee Competency Levels: Performance management identifies specific issues that hinder attainment of already set goals. In our organisation, this is directly associated with the training programs which are aligned to set business targets intended to boost workforce competencies and skills.
Making organisational decisions: This is an undertaking that is implemented after a successful management performance evaluation. In our organisation, the decisions made include a partnership with stakeholders in industry of operations and adherence to already set policies and regulations in the banking sector.
Promoting Industrial Relations: A detailed alignment of an entity already set targets, and operations include the primary determinant of an entity’s success. In our organisation, the management ensures that they foster a progressive relationship with the industrial groups for mitigating any likely disagreements that hinder achievement of set goals and objectives.
- Components of Performance Management Systems

The distinct components of performance management are intended to establish prevailing challenges hindering entity attainment of already set objectives and to establish reliable strategies to mitigate them. The performance management components include;

Performance Planning: This is a component that is inclusive of all set goals and objectives deduced in detail. The process is further integrated with their strategic plan to attain entity goals and objectives.
Performance Appraisal Evaluation through Meetings: This is a common factor guiding the process of creating an acknowledgment on organisation performance. In our organisation, it is a common tradition always to implement quarterly appraisals that target all their departments in the organisation management.
Coaching and Diagnosing: This is an aspect implemented to ensure there is leverage on active sourcing of data through setting realistic criteria of goals and objectives. This is similarly a section of the desire to possess a successful training curriculum for motivating an organisation staff.
- Relationship between Motivation and Performance Management

Performance management is a significant determinant of the level of employee motivation. As pointed out by CIPD (2017c), despite the performance management being a critical factor for the employee’s motivation, there still exist limitations on the extent of motivation. In this regard, the factors that influence the motivation level in performance management include;

The setting of realistic and Achievable Organisational Goals: This is an aspect guiding the evaluation of organisation progress in line with already set goals. In some instances, the set goals could be demotivating to an entity staff, the achievement of an achievable and realistic objectives promote worker’s motivation level. This is in line with the Herzberg-Two factor theory that identifies the motivating factors that contribute to improved job satisfaction with hygiene factors contributing to dissatisfaction (Stello, 2011). Achievement of these set goals in an entity is grouped as the motivating factors.
Performance Appraisal: The employees in an organisation are actively motivated based on the performance appraisal levels in an organisation. Specifically, the monetary appraisal system is perceived as an efficient strategy to appreciate relevant badges and certificates. This is in line with the Herzberg’s five factors on job satisfaction grouped in the salary and group of recognition.
The setting of realistic and achievable organisational goals: The motivation source in this factor is informed by the capacity of evaluating an entity set goals. This is in line with the Maslow-hierarchy of needs theory (Jerome, 2013). This theory informs that satisfied requirements are linked to an increased motivation level leading to an increased struggle for meeting all needs.
- Purposes of Reward within a Performance Management System

Rewards are identified as the performance appraisal factors that are primarily in a direct relationship with other identified factors including motivation. This is in line with ACAS (2005) recognizing that the pay reward system in a performance appraisal is appropriately used in harnessing retaining and motivation of employees hence improving performances. The reward purposes include;

Enhancing Workers Motivation: In this component of performance management, the rewards are provided for implementing high motivation of their workers. The ideal form of reward system is noted to include monetary recognition through offering certificates and badges. Hence, the monetary and promotion rewards in a performance system are critical in making contributions to the motivation of an employee (CIPD, 2017b).
Improving Employee Competence. An instrumental role in performance management is oriented on harnessing the level of commitment of employees while uniquely enhancing the achievement of high-level competencies. This is harnessed by the desire to integrate distinct rewards in performance management for promotion of fair competition with all involved employees with an aspiration to attain projected rewards in process of review.

3.1 Components of Total Reward System with one being Non-financial

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