Performance management

In this lesson

1. 0:00 Performance management rewards and objectives
2. 0:25 Disadvantages of reward schemes in practice
3. 2:12 Problems with team-based reward systems
4. 3:10 Solutions to performance management issues
5. 4:38 Accountability and agency relationships
6. 5:21 Problems with accountability and control
7. 6:00 Performance measurement system requirements
8. 7:00 Soft and hard accountability approaches
9. 7:48 Three control mechanisms for achieving objectives
10. 9:07 What gets measured gets done principle
11. 10:02 Problems with performance measurement systems
12. 12:22 Reducing performance measurement problems
13. 13:41 Hopwood management styles framework
14. 16:18 Contingency theory and contextual factors
15. 17:19 Victoria Logistics exam question walkthrough
16. 19:16 Evaluating reward systems with balanced scorecard

About this lesson

You'll explore the advantages of linking rewards to performance—from motivating staff to meet strategic objectives, to attracting and retaining talent—and critically, the significant downsides: people doing just enough to hit targets, avoiding necessary risks, or gaming the system to look good. Understanding these trade-offs is essential for PM and SBL case studies where you'll need to evaluate real reward schemes. The lesson then moves into the mechanics of effective performance management. You'll discover how to design systems that actually work: using incremental bonuses to maintain effort, linking rewards to multiple performance aspects to avoid narrow focus, and building in safeguards like no-blame cultures to encourage honest forecasting. You'll learn the three control mechanisms—behavioural, personal, and results control—and how they work together. A key concept is accountability: managers and employees must know what they're responsible for, understand it's within their control, and receive clear feedback on progress. You'll also explore the common pitfalls that undermine even well-intentioned systems: tunnel vision (obsessing over one metric while ignoring others), short-termism, gaming, and ossification (letting outdated measures stagnate). The lesson includes practical strategies to mitigate these problems, from staff involvement in target-setting to regular audits of data reliability. Finally, you'll examine Hopwood's management styles—budget constrained, profit conscious, and non-accounting—and learn how contingency theory applies: the best approach depends on your organisation's circumstances, industry, and strategic phase. A worked exam question on Victoria Logistics ties theory to practice, showing how to evaluate a reward system against a balanced scorecard and assess whether targets are appropriate and controllable. This lesson equips you with the frameworks and language to tackle reward and performance management questions across PM, APM, and case study papers.

Duration: 23m