Pay-for-performance systems are becoming increasingly popular due to the many positive effects they produce.
Pay-for-performance systems are becoming increasingly popular due to the many positive effects they produce. Pay-for-performance programs not only provide incentives for employees, but also substantially benefit the companies that offer them. According to an article by HR Daily Advisor, there are five reasons employers should embrace pay-for-performance:
It links compensation to business strategy and culture
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It makes it easier for companies to align employee payouts with actual contribution and success.
It retains and engages high performers
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It can be used as a competitive advantage.
Like it or not, it’s the new normal.
(Unknown, 2013)
While the fifth reason on HR Daily Advisor’s list may not be beneficial to an organization, the top four definitely are! Attracting and retaining talent, integrating business strategy and employee compensation, ensuring fair compensation based on contribution, the benefits are insurmountable.
HR Daily Advisor also offered an informative article regarding the components of an effective pay-for-performance program. There are 5 major components of an effective pay-for-performance program, to-wit:
Evaluation forms
Administrative manual or handbook for managers
Initial and on-going training
Effective communication channels
On-going coaching and feedback
(Unknown, 2013)
6-1-Discussion_-Discussion-6-OL-442-J3169-Human-Resource-Strategy_Devel-21EW3
Answer preview to pay-for-performance systems are becoming increasingly popular due to the many positive effects they produce.
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