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Performance Pay

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Is performance based pay effective? There are evidences shows that pay incentives increase employee productivity. Many companies have implemented the salary that rewarded superior performance. In the ideal world, it may be true that if selection and placement decisions are made effectively, performance gap among members of an organization should be comparatively narrow. It is may be true through an ideal selection and placement process, an organization may fielded a talented team of nearly equal in ability and performance at the beginning. However over the course of time, the level of performance among the team members will drift apart. There is plethora of factors that create performance gap among employees. Some of the factors are as follow:

Dissatisfaction due to competition and lack of adequate advancement/compensation

Conflicts of interests and /or personalities

Tedium due to repetitive tasks and/or situations

Changes in health and/or personal life conditions

Changes of motivation over time

Thus, in order to maintain the performance effectiveness requires an organization to sustain an endless performance enhancement initiative. To think performance based pay isn't needed and may even be disruptive, if the selection and placement decisions are made effectively. While companies are striving to strengthen their selection process to hire high performers, this process alone is not enough to maintain the vitality of an organization. In order to maintain the vitality, an organization must continuing transforming and renewing itself through a process similar to that of Kaizen (continuous improvement). For many companies, the bottom line impact of the Employee Performance Gap is huge. Picking a winning team is not enough. It is only the beginning.

Solution Preview

I agree that all sorts of factors are prevalent when it comes to performance based pay. Most employees want paid more but that does not always occur because of not getting into management or other factors. The factors that are listed, thought, are quite important. When a person is dissatisfied with their company, they are ...

Solution Summary

This solution provided an opinion if performance based pay is effective.