The Harding Trust Essay

1805 Words8 Pages
Case Study: Contingent pay at The Harding Trust
Introduction
In this essay, I shall make my evaluation on whether Performance Related Pay (PRP) should be introduced to The Harding Trust (THT). The theoretical ideology of PRP will be looked at, as well as the practical implications of the scheme. Factors of great importance, that may well determine the impact of PRP on THT, will also be examined. Through my evaluation, I shall place a significant focus on advantages and disadvantages of PRP as well as how they could affect THT. I will pay special attention to the impact that PRP could make on employee performance and the overall organization. All arguments and facts will be presented from organizational point of view as well as from
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A study conducted by ICP [1998] however claims that the majority of employees(74%) are likely to improve performance as a result of PRP (reference 7)
Impact on Morale & Job Satisfaction
PRP might be considered as a scheme contributing to the creation of a challenging work environment and allowing for career development where individuals are fairly recognized. The term ‘’fair’’ relates to the idea of each employee being rewarded in accordance with the individual efforts made .As such, the system is likely to have a rather positive impact on morale & job satisfaction. However a number of studies have shown signs of negativity towards PRP, mainly based on the way in which the scheme is perceived by employees. Michelle Brown and John S. investigate the problem and make an argument that employee’s perception of PRP is often associated with the common opinion that the scheme is unfair, gives way to ‘’favoritism’’ and is often based on unrealistic goals (reference 8). Formulating an opinion around these arguments, one would suggest that if PRP is perceived by THT employees as being unfair, the introduction of the scheme would lead to decline in morale and job satisfaction. It should be noted here that THT’s current reward system does not bear similar risks as it’s solely based on
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