The Importance Of The Pay For Performance Program For Improving Business Performance Essay

The findings of two main studies was obtained from the Academy of Management Journal. The consists of two different cultural regions of the world. The studies were conducted in Hong Kong and China. The topics that were covered within this study was retaining and motivating employees and how the compensation preferences differed between regions. According to our course studies, rewarding for performance such as pay and other intrinsic or extrinsic rewards can have a positive impact on serval things within an organization. Some positive impact may include: attraction of employees, retention of employees, and job satisfaction of employees. This article describes findings from a study in which people have different motivations in the

carefully planned out and considered, the total closure or failure of the organization could be at hand in the near future. In our modern age, employers know that salary is not the only factor that should be considered and that salary alone will not lead to better or more highly profitable workers alone. This is why compensation planning is important and why pay should have some connection between performance and compensation. This is why the human resources department should consider many monetary and non-monetary factors when considering how to properly compensate and motivate employees (Dessler, 2013).

3. Total Rewards Strategy – This structure is very complex, yet comes with a lot of flexibility to allow for growth and internal satisfaction. The pitfalls with this structure come with the implementation, which could be treacherous and difficult to convey to our employees.

The Fair Work Commission (FWC) in Australia along modern awards and employment contracts, has the power to control employee wages and conditions. Wages are the price paid to the labour force for its contributions in the production process. The FWC regulates if the National Employment Standards and enterprise agreements are met under the Fair Work Act (2009). Modern awards and employment contracts are arranged for the remaining individuals in order to determine their wages and conditions. Wages are also determined through the government implementation of price floors and also the supply and demand. Consequences are implemented by the FWC if Australia companies are found to have contravened the Fair Work Act (2009), one recent Australian company that was found to have infringed this legislation was Coles.

Fair Work Australia (FWA) was established by the Fair Work Act 2009 (the Act) and will commence operations on 1 July 2009. Fair Work Australia is one of two institutions established to administer the provisions of the Act and to provide a framework for cooperative and productive workplace relations that promote economic prosperity and social inclusion. The Act also establishes the office of the Fair Work Ombudsman to undertake compliance, education and advice functions. Fair Work Australia and the Fair Work Ombudsman will develop cooperative and seamless approaches to the delivery of services to employees, employers and organisations.

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

The company’s compensation programs are result oriented market focused and flexible. Pay for Performance is one of the key compensation program, which includes various pay, benefits and special programs offered by the company.

The Fair Work Commission is Australia’s national workplace relations tribunal. They are responsible in maintaining the minimum wages/salaries and working conditions. They also deal with a range of other work related and employment problems and disputes.

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. (Gordon, Kaswin) This paper will show the positive benefits of performance pay as

O’Neil (1998) suggests six minimal criteria for the design of a performance based pay system. The first of these criteria is that the reward system should be self-funding, that is, the performance increases should as a minimum offset the cost of the rewards provided. The second criterion is that the distribution of the rewards must be consistent, fair and justifiable. In addition reward plans must be transparent and clearly communicated. The third criterion

Although research generally confirms that pay-for-performance plans can influence greater outcomes, it is unclear how effective different pay plans are relative to each other (Park, 2012). Like most things in business, compensation is something that requires evaluation, study, assessment, strategy, modeling and integration.  Achieving a pay for performance culture does not happen without paying attention to the behaviors, activities, rewards and motivations that have to be linked and reinforced through a well engineered and successfully executed process.  Actually if that process does not tie rewards to shareholder financial objectives, employ the proper mix of compensation elements, result in meaningful dollars, embrace performance that employees can impact and are effectively communicated and reinforced, then the results it produces will likely fall short (Vision Link Advisory Group, 2013).

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

Keeping employees motivated in addition to creating incentives and/or additional ways for employees to receive more compensation will create better performance overall within an organization. Contrary if company B gives their employees incentives to perform, without any motivational tactics they probably will not have as many top performances as company A, in addition the company may only seek short term rewards verses have long term success. Lack of motivation for employees within an organization, can cause long term damage for the company’s success. Different things motivate everyone; therefore there should be a system in place to keep employees motivated for the long term success of the company. In the MBM textbook under the concept of incentives, compensation, and motivation, there are a couple of different views of how it should be applied within an organization. We will discuss The Social Role of Profit, Personal Profit and Losses, and the way Market-Based Management view how incentives, compensation, and motivation should be applied and the things that effectively drive employees’ actions while at work.

Pay for performance is to link employees’ salary or salary increase to his or her performance. It seems to be a reasonable or attractive idea but it often does not work well in organizations. Please use at least 4 motivation theories or models to explain why pay for performance may not work as expected—particularly in government and nonprofit organizations.

An incentive pay program can reward employees who continue to produce superior work or encourage employees who already produce good work to best. Sometimes, use an incentive system when employees are lack of enthusiasm of getting down to work and improving things. If everyone in the same job classification gets the same pay, there is no real incentive to do an outstanding job (French, 1990). Various incentive plans used to motivate all employees such as production staff, sales staff, administrative staff and managerial and professional staff on an individual basis. To be improved employee work performance, the incentive pay programs need to be fairly matched with the employees’ expectation. Properly designed and maintained incentive pay program has the potential to increase employees’ productivity and work performance.