Benefits Of Pay For Performance

1357 Words6 Pages
Today more than ever businesses are fighting to retain and attract top tier talent. Organization are looking for ways to make their wages and other compensatory factors more competitive and attractive . They want options that keep people happy and motivated to perform at their best in the workplace. Beyond a standard wage workers generally want a reward for their hard efforts, something that makes them feel valued and makes their work accomplish a goal. A popular form of compensation is merit pay , paying extra for accomplishing a specific goal for the company. Money is one of the major forms of motivation out there so what better way to put a fire in people than giving them a slice of the profits their hard work helps to generate. Merit…show more content…
Here will be a look into these sectors and the issues that arise within them. Employees have been reported to enjoy the concept the Merit Pay systems but feel that it is not adequately implemented in their workplace. A study was conducted on an organization who had just created a new merit pay system for their employees. The employee 's salary was now broken up into two seperate factors. One factor was their standard base salary while the second factor was an incentive bonus. The incentive bonus was designed to be distributed to employees based on their performance. Their performance was determined by supervisory ratings of the success to which employees achieved their preset goals. Prior to the implementation of this new pay plan, employee evaluations incorporated a combination of merit and seniority that allowed employees to advance through job classifications and pay grade raises based on traditional end of the year annual performance reviews. 4,788 employees who were covered under the newly implemented pay for performance plan in the organization were asked three open ended questions to state how they felt about their plan. Employees 76 percent of them approved of the idea but disagreed with the execution of their organization’s merit pay system. Employees appreciated the opportunity to be judged on merit, the money offered by the plan, and
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