Pay For Performance Flashcards, test questions and answers
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What is Pay For Performance?
Pay for performance is an increasingly popular approach to employee compensation, wherein the amount of money an employee receives is directly linked to his or her job performance. This type of compensation system has become popular as organizations look for new ways to incentivize employees and increase productivity in the workplace.The primary benefit of pay-for-performance systems is that they can be used to reward and reinforce positive behavior. The employee who works hard and performs well will receive a larger salary than someone who does not put in the same effort or produce similar results. It also encourages employees to strive for excellence, as there are financial rewards associated with achieving high levels of performance. In addition, it reduces wage disparities between employees performing similar tasks since those who perform better will be paid more than those who do not perform equally well.However, there are potential drawbacks to pay-for-performance systems that should be considered before implementing them in any organization. For instance, this system may create a sense of competition among coworkers that could lead to decreased morale and productivity if not managed properly. Additionally, basing salaries solely on performance can put undue pressure on employees which can lead to burnout or resentment if expectations are too high or unrealistic. Furthermore, it may create unfair advantages for those with higher skill levels or privileged backgrounds as they may be more likely to achieve higher levels of success within the organization than their less fortunate peers.Ultimately, pay-for-performance systems can have positive outcomes when used correctly but must be thoughtfully implemented within any organization in order to reap these benefits while avoiding potential pitfalls.