(Solution) CIPD 5HR03 how people and organisational performance can impact on the approach to reward. (AC 1.3)


People performance is the ability of employees to complete their duties and responsibilities as required by their employer. Organisational performance is the ability of an organisation to achieve its goals and objectives (Anwar and Abdullah, 2021). People performance can be measured through the time taken to complete a project successfully and ability to produce high quality goods and services. On the other hand, organisational performance is measured using key metrics such as profitability, gross margin and liquidity ratios. During performance management Body Image should take into various principles such as transparency and fairness. Everyone should be made to understand measures used to reward employees and these should be fair to everyone.

People performance can impact approach to reward through key issues such as absence rate and quality of products and services. Lack of reward and recognition might be a key contributor of higher absence rate and Body Image can respond through pay rise and competitive employee benefits. The quality of goods and services also affect approach to reward. Body Image would provide employees with extrinsic rewards to motivate them to focus on producing quality goods and services (Fatima, 2021).

In regards to organisational performance, various issues can be linked to approach to reward. These issues include competition for talents and changes in legislations. Higher competition for talents may drive Body Image to offer better pay and benefits to attract and retain talents. A change in National Minimum Wage will also require Body Image to revise its pay structure and update it with new minimum wage rates.

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