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Performance management as a motivation factor for employees

by PKF Finconta June 26, 2018


Author: Alina Făniță, CEO, PKF Finconta


If we asked the leadership of a company about the role of performance management in generating employee involvement and motivation, it seems that many would recognize its important role. At least that's what an international study shows that 75% of HR executives and company managers believe performance management has the greatest impact on employee motivation. The question is: what is an effective performance assessment system?


Volatility of the business environment is transforming


Multiple business environment transformation factors change companies. They are obliged to anticipate the changes that affect them, from technological innovation and disruptive business models, to increased competition and the lack of human resources.
When companies change, it is also necessary for employees' performance management to change. New realities with old tools can not be evaluated. The high speed of company change makes tools and approaches in performance management also changing. The up-to-date approaches to employee performance management can deliver the expected results and generate motivation if we know them and we adopt them correctly.


Implications on performance management


The implications of changes in the business environment for employee performance management aim at setting goals, source and frequency of feed-back, language and labeling.

  • Annual targets – Must be in line with the pace of change from now on in every industry or field of activity, and fixing them with each individual person should take account of the highly collaborative style of work in today's teams.
  • Feedback – Often obtained from a single source in the person of the direct manager is overcome by the more and more frequent reality of multicultural and geographically distributed teams. Direct managers are not omnipresent and therefore are not a better source of feedback. In high-tech areas, colleagues are often a more valid source of feedback than managers. That is why the diversification of feedback sources becomes imperative.
  • Frequency of feedback – Frequently given to 1 or 6 months, as is usually the case, the feedback leads to a significant loss of information and low accuracy. The transition to periodic feedback to coaching for real-time performance is the best solution.
  • Language and performance labeling – In the knowledge economy, employees do not want performance management to be done by anyone else in the company, other than themselves. The idea that they become a resource that the company manages, like the operating parameters of an installation, suspends humanity. A new terminology is therefore necessary for employees to no longer be "resources". Moreover, labeling the performance level (unsatisfactory, satisfactory, etc.) causes frustration rather than motivation to be better for those who have under-performed.

Influencing employee performance is preferable to be made through the concrete appointment of specific, team-based objectives with a high level of difficulty. This approach, coupled with real-time feedback on progress, motivates more than the lack of setting goals or adopting a maximizing approach to the potential of each employee by saying "work as good as you can" / "give you what you have good".


Creating teams with a common mission, complementary and open communication skills, with integrity and trust, is a solution that makes a major contribution to creating a performance-enhancing environment.


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About us


For more than 23 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.

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