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Pay-For-Performance 1

Autor:   •  February 25, 2019  •  Article Review  •  562 Words (3 Pages)  •  38 Views

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Discussion one

Question a

Pay-for-performance is a financial reward system for employees where some or all of their monetary compensation is related to how their performance is assessed relative to stated criteria. 

Retaining top talent: Pay-for-compensation enables employers to keep exceptional employees, by offering them a competitive compensation package. Employees when know that they will be rewarded for their efforts, they are more likely to stay with your company.

Worker motivation: Workers or rather employees when they realize that meeting performance objectives will result in compensation increase, they may be inclined to work harder and improve their skills.

Increased Productivity: Productivity will increase due to the employee's desire to earn a high income. The result can be greater productivity from fewer workers, reducing the employer's labor cost and transferring the financial risk from the employer to the employee.

Unlimited Compensation: A pay-per-performance plan can sometimes result in situations where the employee may be able to earn a substantial income (Petersen, 2018).


As far as pay-for-compensation has some benefits it also has some challenges to handle it and they include the following;

When goals or objectives are not smart: Smart objectives need to specific, measurable, attainable, realistic, and timely and anything apart from these doesn’t get employees interest. Attempting to hold an employee accountable to a goal that isn’t smart? Isn’t fair and isn’t practical, either.

Change of annual raise: There have been change on the percentage of increased from what was there before hence making a very small difference.

Many managers are unskilled at giving meaningful evaluations: Most organizations claim a pay for performance philosophy and strategy. But for many, there is a disconnection between words and actions. Even for managers who know how to write a good review are less skilled in competently communicating and advocating for employees compensation philosophy.


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