Performance bonus as entry vehicle to performance management

Abstract

The purpose of this research is to answer the following fundamental question: "Is the performance bonus approach a viable alternative methodology for implementing a Performance Management and Development intervention in South African companies? " The intention is to use the performance bonus as an entry vehicle for the establishment of a fully functional performance management and development system. The introduction of a performance based bonus system is intended to instill the recognition of "the pay for performance" concept as opposed to one of entitlement. What is expected is that a culture of performance will develop encompassing standards of work performance, goal orientation and a level of individual responsibility for recognition and reward. Understanding and acceptance of the performance bonus will create a platform for the introduction of further levels of remuneration, being increases and finally basic salary becoming performance based. Furthermore, this will allow the development of the further necessary levels of a fully functional integrated performance management and development system. This would entail the inclusion of management levels within the system as well as operational levels (departments, divisions and regions) and finally the organisational level thereby linking all aspects of the system to overall strategy.