Performance Related Pay Essay

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PRP is paying according to the performance, which means the better the performance the more the employee will take home. As a matter of fact, except, academics more often, the majority are now suggesting the opposite may be a fairer case. The common question which might arise is what the need is for organisations continue to throw money at performance issues when they are well equipped with better management options.


This paper will explore both positive and negative potential impacts of PRP. Initially, PRP will be defined. An examination of the theoretical utility of PRP and the growth in PRP schemes will follow. There will then be a consideration of the potential disadvantages of PRP schemes. This discussion will be illustrated through the use of a specific study of PRP systems in the finance sector (Lewis, 1998) and the concept of employee burnout (Brown and Benson, 2003). This paper will conclude that PRP schemes in the finance sector can affect the productivity of employees and their quality of service both positively and negatively. If PRP schemes are ineffective at attaining the desired outcomes, which could include improving employee productivity and service quality, this can be a result of several factors. Lewis' study of PRP systems in the finance sector (1998: 70) found more evidence of ineffective implementation of the PRP process cycle than evidence of success. Given the potential drawbacks of PRP schemes, it is crucial that instances of ineffective implementation are avoided wherever possible. It is therefore imperative that those who implement PRP schemes recognise that such systems have the potential to worsen employee performance and service quality. ...
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