Pay For Performance, Financial Incentives, And Hr

977 words - 4 pages

Most will agree that knowledge is the ‘key’ resource in this post-industrial economy. The challenge for many companies is developing an organization that creates and cultivates knowledge and learning. Pay plays a significant role in shaping workplace behavior. Most of the traditional pay systems reward the job, but don't always incite the employees who are willing and able to go above and beyond to want to actually want to do so. There are many ways to accomplish this and one of those ways is by implementing the the resources and abilities of HR.
Corporations are looking for new ways to improve employee performance as well as remain competitive. Pay for performance is one method some ...view middle of the document...

When the time comes for the manager or supervisor to actually rate an employee’s performance, the employer might do the following:
• Job Performance
• Abilities
• Skills
• Behavior (Bacal, 56)
One way that the performance based pay should not be implemented is by limiting pay for performance plans to select groups may enable the organization to highlight clearer links between employee behavior and outcomes, but doing so may create divisiveness. Depending upon the circumstances, such as whether the dual pay systems offer markedly different earning potential, coverage may be viewed as distinguishing between the “haves” and the “have nots,” creating some dissension between the two groups. This is particularly relevant if the benefits provided to one group are viewed as coming at a cost to the other group.(Sowell, 224, 226) When a pay for performance system functions properly:
1. Outstanding performers will receive the greatest rewards, to acknowledge their superior contributions and to motivate them to continue high performance.
2. Average performers will receive substantially smaller raises, which may encourage them to work harder to achieve larger raises in the future.
3. Poor performers will receive no increase, which is intended to persuade them to improve their performance or leave. (Bacal 38-50)
In addition, there is also other ways of encouraging employees in other ways such as employee incentives. Employee incentive plans go by many names. Successful company incentive programs will accomplish exactly what you want them to do if you plan them properly. In general, studies have shown that individual incentives are more effective than group incentives. While incentives are not the answer to all personnel challenges, they can do much to increase worker performance. Some kind of incentive pay is an important part of any compensation plan. Incentive pay shows appreciation and creates a sense of participation in the company's well-being that straight salary dollars, though sizeable, don't...

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