Performance Related Pay - Essay Example

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Performance Related Pay

A critical look at performance pay however points to the fact that this method utilizes only performance as the determinant factor. It neglects other important determinants of pay such as no knowledge and skills, educational background and orientation, possession of relevant experience and other extraneous factors that play equally important roles in determining the amount of salary. The performance pay system may sometimes lack proper control system therefore giving superiors unwarranted control over the system. The system relies on money as the sole motivator hence it assumes that workers are so interested in monetary gains such that they will increase production as long as they are paid for it.
However there exists checks and balances which if put in place will make the implementation process of this system all much easier and acceptable to the employees. Many organizations have turned into the performance pay system as their basis of rewarding, reviewing salaries as well as for job evaluation. Also many organizations have resorted into the performance pay system in order to motivate their employees who achieve outstanding and exemplary results. The pay system just like many others is vulnerable to abuse and misuse. ...Show more

Summary

Although the relationship between pay and performance is complex and problematic performance pay remains of central interest to employers as a human resorting strategy aimed at improving organizational performance. Comment critically on the above statement.
Author : jazminstreich
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