Cornerstone of HR Value Chain (Employee Engagement) Part - 5

In continuation to my last article on Cornerstone of HR Value Chain (Employee Engagement) Part - 4

Performance Management - Performance management is a forward looking process for setting goals and objecives and regularly checking progress toward achieving those goals. It is a cyclic feedback loop whereby the observed outputs of a system are continually measured and compared with the desired goals or outputs. Any discrepancy or gap is then fed back into changing the inputs of the process, so as to achieve the desired goals. Any such management control system involves communicating the required change and promptly taking action to effect the desired change. This helps the system or organization being managed to achieve the required goal or the strategic plan.

A key aspect of performance management is Performance measurement. Performance management is often confused with Performance appraisal, the latter only forming the final part of the performance management cycle. Performance appraisal is a backwards looking process and a Lagging indicator of financial performance, only measuring what happened in the past. Performance management is a forward looking process and a Leading indicator of financial performance because it drives a system or organisation towards a desired future goal.

Reward & Recognition Programs - Employee recognition is not just a nice thing to do for people. Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create for your business. When you recognize people effectively, you reinforce, with your chosen means of recognition, the actions and behaviors you must want to see people repeat. An effective employee recognition system is simple, immediate, and powerfully reinforcing.

Compensation & Benefits : - In financial terms, the salary and wages you pay to your employees for the work they do. Other, nonfinancial forms of compensation can also be offered to attract and retain staff. In a nutshell, compensation and benfits will have 3 parts ;
1) Salary payment
2) Retirals
3) Life benefits
While arriving at salary & benefits composition, it is imperative for us as HR professional to be fair and equitable and also keep in mind the applicable laws of the land ( I will take this up as a separate topic in the coming months and will dwell on applicability of key employment laws including Wage acts.)
I have seen most of the employer failing to communicate total benefits extended to employees in an effective manners and hence failing to leverage this to enhance their motivation.
In my next post I shall touch upon employee development, coaching & mentoring. Watch out the space!


  1. Please highlight a little further on performance management and its relationship with performance measurement and performance appraisal.

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