Performance Related Pay

pitying resource steering is defined as the part of the management process that specializes in the management of people in start organization. It emphasizes that employees atomic number 18 the primary resource for gaining sustainable competitive advantages, that military man resources activities need to be integrated with the corporate strategy... (Bratton & Gold, 1994, p5) Human resource management has become an important tool in todays business environment, with organizations looking forward to enhancing productivity through trenchant employee management. In recent years there has been an increased strain on how businesses use reward and appraisal dodges in sanctify to achieve this. One area of a reward scheme is turn outment of employees and what method is used to achieve this.

Performances related pay (henceforth PRP), often termed individual performance related pay, is defined as a system in which an individuals increase in salary is only when or mainly dependent on his/her appraisal or merit rating (Kinnie .N&D. Lawe, 1990). PRP has grown in popularity since the 1980s as businesses hadmoved towards individualization.

In speculation PRP seems an attractive scheme. Employees are set targets by the company and are assessed on their achievement of them. The employees are assessed on their ability to check these targets and reward is thengiven in return in the form of payment. many an(prenominal) advantages sustain been attached to PRP.



For instance, it serves as a motivator and as a result that can enhance performance; in addition, it is seen as an effective way to attract and retain sufficient employees. Moreover, it aids in reinforcing or changing organizational agriculture and also highlights differences between high and low performers (Pinningtoo.A&T.Edwards, 2000).

There have been documented examples of PRP being successful in practice. Richer Sounds, a UK establish hi-fi retailer implemented a PRP system in which employees customer service performance resulted in payment as a...

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