Review the following article:
Why Performance Related Pay (PRP) Doesn't Work http://www.arrod.co.uk/archive/concept_PRP_doesnt_work.php
The VP of operations asks you the following questions:
* Does pay motivate employees? Why or why not?
* How could you measure the motivating effects of your organization's compensation programs?
Does pay motivate employees? Why or why not?
I think for the most part, everyone is motivated by money to some degree. However, some would argue that money doesn't change behavior in the workplace, and it takes a great manager to keep employees motivated. Nevertheless, management can play a significant role in keeping employees motivated to do their jobs well. Just saying a kind word like "thank you" can go a long way. But, money can ...
This solution provides an explanation about pay and whether or not it motivates employees. It also discusses how motivating effects of an organization compensation program can be measured.