Improving performance and reward management in a non-profit organization

Abstract

In this master’s thesis the author investigates how to improve the performance management of the commissioning organization by clarifying the current performance management and the goal setting processes, and how to develop reward management by creating a framework of concrete suggestions that could be used to implement a reward strategy and a reward model. In order to create an effective reward strategy and a reward model, the author pursued to understand what is experienced as rewarding and meaningful within a non-profit organization, and what motivates the commissioning organization’s employees.

Theoretical framework of this thesis consists of performance management theory and reward management theory. Empirical research was conducted as an action research, and workshop and survey methods were used for data collection. The data was collected in the commissioning organization during 2021.

The goal setting process was clarified in a joint workshop and based on the results, the employees could better understand how their performance goals were set after participating in the workshop and one-on-one discussions with their manager. A survey was conducted in order to understand how the employees understood the total rewards offering in the commissioning organization, what was perceived as meaningful within the current total rewards bundle and what new methods of rewarding would be experienced as rewarding and meaningful. Based on the survey’s responses, feedback was the most important method of recognition for the employees and the employees of the commissioning organization valued intangible methods of rewards highly. Additionally, new reward methods should be further assessed before implementing a new reward model. Lastly, performance assessment process and methods should be further developed in order to effectively reward employees based on their performance.