ASSIGNMENT | Pay for Performance Systems

Topic: Pay for Performance Systems

You read about various methods used to reward employees for their individual performance and incentive plans to motivate employees. Based on your reading, answer the questions below in this Discussion.

Describe some of the most significant benefits of a pay for performance system.
Pay for performance also has its list of challenges. Discuss the main areas of concern with the implementation of a pay for performance system. How can organizations address the negative aspects of this type of system?
How can the organization’s manner of creating and carrying out an incentive plan improve the effectiveness of the plan?
Support your response with information from the textbook or other academic source.

SAMPLE SOLUTION

Pay for Performance Systems

Advantages Pay for performance system is an umbrella term that is used to refer to a model where an organization links an employee’s performance to their compensation. The system is always measured against the set goals of the organization. A Pay For Performance System has several advantages such as; enhancing the desire to reward high performers; helps in eliminating the low achievers within an organization; and assists in attracting and retaining talent as well improving the competitiveness of the labor market (Shields et al.,2015). Moreover, the system…