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Performance Related Pay

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❶Nevertheless, the only single scheme impact is far behind that of combined application of two or more types.

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In other words, there is greater scope to understand how employees may require to be treated differently and to interpret why employees do not necessarily respond in a mechanical way to changes in, for example, the level of pay CIPD, According to the expectancy theory, money is a significant motivator for most people, and in order to get or secure a higher base salary or some form f bonus payment, we will normally change our behaviour and attitude, directing or increasing effort in a specific direction.

Tying pay to specific performance can ensure people are motivated to increase their efforts and performance and ensure performance outcomes are met Mikovich and Newman, Equity theorists claim that people seek balance between their inputs and the reward outcomes.

The predictions of equity theory are less often supported by research when people receive than their shares, as opposed to when they receive fewer Mowday, In other words, employees are more likely to do something in response to feeling under-rewarded than over-rewarded. Equity theory focuses on perceptions of fairness in the workplace, including distributive justice—that is, whether people believe they have received or will receive fair rewards; procedural justice—reflects whether people believe that the procedures used in an organization to allocate rewards are fair; interactional justice—refers to whether people believe they are treated in an appropriate manner by others at work, especially authority figures Arnold, Models In relation to the relationship between pay and performance, pay can be related to individual, the working group or orgnisation performance Brown and Heywood, It assumes that the differences between individuals are measurable so that retention of high quality employees who wish to enjoy high performance reward is increased Gerhart and Rynes, Also, employees are motivated to create more efficient methods to boost productivity.

However, individual PRP has negative impacts which may de-motivate employees. Team-based performance-related pay schemes include variable pay which depends on the performance of a team.

The aim is to consolidate the team through incentives, establishing a united, mutually supporting team with a high level of involvement Acas. Meanwhile, team-based pay motivates less effective employees and serves as an incentive for the whole team to improve.

There are also potential disadvantages of team-based PRP. In contrast to individual PRP, peer pressure is heavy and result in consistence instead of creativity. Team-based incentives of course aim to incentivize work teams.

Incentives play an important part in motivating employees to do a good job. When an employee feels like the organizations appreciate them rather it is with bonus pay, paid time off, recognition, family leave, or good health benefits that are more willing to go that extra mile to make sure quality service is provided.

Benefits and incentives pay also helps to motivate employees they call in sick less are healthier happier people all because they feel more appreciated!! Accessed September 14, We will write a custom essay sample on Pay for Performance specifically for you. Leave your email and we will send you an example after 24 hours If you contact us after hours, we'll get back to you in 24 hours or less. Pay for Performance Essay. How to cite this page Choose cite format: How about make it original?

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Pay for Performance Pay for Performance plans were developed in the early ’s as a way to control costs. “Pay-for-Performance is a reimbursement plan that links payment to quality and efficiency as an incentive to improve the quality of health care and to reduce costs” (Shi & Singh, , p. ).

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Pay-for-performance plans Variable pay (organizational focus) A team or group incentive plan that ties pay to some measure of the firm’s overall profitability.

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Reimbursement and Pay-for-Performance Essay Words | 6 Pages. been a pervasive issue in health care because of the Pay-for-Performance (P4P) Programs. Performance measures such as productivity or profit related to the performance of a group have been of less importance in determining pay increases. Though skills have been reflected in pay differentials, pay systems have been seldom geared to the encouragement of skills acquisition and application.

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(Billikopf) Performance pay has various names: merit pay, pay for performance, knowledge-and-skill- based pay, or individual or group incentive pay. (Delisio) Pay for performance systems have further been proven to have two advantages for organizations: attracting more high-quality employees and motivating employees to exert more effort at their jobs. In other words, it means that the employers can enjoy the benefits of improved performance of their business as well as the employees can feast on the increased compensation as a result of their hard work. (Zimbelman. K, ) Pay for performance creates a clear concept that enables employees to priorities their task.