Purchase Solution

Performance based compensation

Not what you're looking for?

Ask Custom Question

Can you comment on below? Are you agree or disagree?

"I hold this as a rule of life: Too much of anything is bad." (Terence) I believe that this can be true in the debate about performance-based pay. Hypothetically, an employee works for an organization where his/her pay is based 50% on performance. She is leader of 1 of approximately 20, 4-6 person teams, fighting for accounts at a large marketing firm. If her team gets an account, they receive a 30% bonus. If they don't they will be earning much less that expected with the possibility of termination. Now this is an extreme situation but there are many negatives here. The work environment would have to be extremely cutthroat and hostile. Ideas wouldn't be shared decreasing creativity as a part of the company culture. Though the company would be highly productive, at what cost. The high turn-over rate would increase HR costs and the company reputation would make it even more difficult to rehire.

Purchase this Solution
Solution Summary

The solution is is 227 words. This response does not agree with the rule in this situation and explains why.

Solution Preview

I don't think this is a good example of the rule of life, that too much of anything is bad (although I agree with the rule).

The key here I believe is the comment: fighting for accounts. If teams believe that if they "get one" it means another team "didn't get one" you will have teams hiding information and ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Motivation

This tests some key elements of major motivation theories.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • Compensation at Wal-Mart

    salaries base, performance-based system, performance appraisal approach, executive compensation strategy, and compensation practice effectiveness.

  • Pros & Cons of Performance-Based Pay

    Retrieved on June 28, 2013 from http://www.andrewjensen.net/understanding-performance-based-pay/. Richter, Gena (2002). Compensation and Benefits: Performance-Based Compensation.

  • Discuss issues related to performance-based pay for executiv

    Basically, the executive's pay is based on performance, with the intent that superior performance is heavily rewarded. The main problem is that executives have found ways to take advantage (i.e. cheat) the compensation structure.

  • Developing a Career Development Plan - Compensation

    The major benefit of my performance based compensation plan will be that it will not only motivate the employees to enhance their performance levels for earning performance based bonuses, but will also benefit the organization as each employee will strive

  • Compensation plan:Factors affecting effective incentive plan

    The two factors that would critically influence the compensation plan are: 1. Whether the plan should be based on group or individual employee performance 2.

  • Ethics and Performance Measures for Compensation

    Companies can appoint external consultants to implement effective compensation system based on performance measures.

  • Explain the role of compensation and its influence on employee behavior

    Some of the pay plans are merit based pay plan, performance based pay pal as per the feedback and recognition of employees those affect the performance of the employees in the organizations.

  • Executive Performance and Executive Compensation

    Another very interesting reason that there is a weak link between executive performance and executive compensation, is due to the fact that some of the largest organizations based their compensation offerings to executives upon the compensation packages

  • Performance Measure - Profitability

    If a manager's compensation is based on 75% of profits, what is his compensation for the current year?

  • Compensation Package

    The plan should be based on individual employee performance and that the incentive pay should replace or compliment the traditional pay because it is the most effective reward and compensation systems, which aligns with objective, outcome-based evaluations

View More Related Solutions