Question

how Linking PMS with compensation, rewards and benefits will help businesses in increasing the employee’s engagement?

Answer 1

PMS (Performance Management System) is the system through which the company evaluates and manages the performance of the employees to get the overall view of how much the employees are inclined towards the goal of the organization and how much they contributed in the same. While PMS is itself a very large concept, linking compensation, rewards and benefits definitely help the organization in many ways: -

• Motivation: - When performance evaluation is done, the organization gets an idea of who is a good performer or who has performed well in the past few months, also about the employees who have not performed that well as compared to their previous performance. So, they get an idea of whom to reward and compensate more to motivate the employees who have performed well. Also, the organization gets an idea of how to motivate the underperforming employees by giving them a thought of extra incentive if they work hard and get a good performance management review.
• Normalisation: - Every employee’s performance in each department is normalised within that department that means each employee gets compared with their peers and if the benefits or rewards are linked with the performance management systems, the employees will try to perform better than each other to get a good normalised score for the benefits or the rewards due on the score. This also helps in the determining the performance of a department as a whole.
• Achieving time-bound tasks: - Employees work better when they have time-bound goals and much better if they have an incentive or a benefit attached to that goal. By linking PMS with rewards and benefits, it becomes better for the organization to give time-bound goals to the employees and attaching some monetary benefits or incentives to it. The result shows a better involvement of the employees and a better performance review with the completion of the goals within the stipulated time.