Benefits And Disadvantages Of Performance Related Pay

Question 15: Discuss the advantages and disadvantages of performance related pay. To what extent should it be a model of remuneration for employees across all pay scales? OUTLINE I. Introduction 1. General information 2. Thesis: Addressing two main parts II. Body 1. Advantages and disadvantages of performance related pay a. Advantages - Working as a motivator (e.g. sales personnel) - Improve workforce productivity - Attract and keep employees, especially high-quality workers (E.g. executives) - Increase competitive advantage for organisations b. Disadvantages - Difficult to evaluate - Ineffective in some jobs entailing with team working and multitasking E.g. Teachers 2. A remuneration model across all pay scales - Only apply PRP for top and bottom-level employees - Not apply for middle-level employees III. Conclusion 1. Summary 2. Conclusion ESSAY Performance-related pay (PRP) or merit pay has been a common model used in companies for many years. Basically, it is a payment method which links the individual’s given salary and their performance’s evaluation. The model is usually measured by comparing with stated objectives. For many years, performance-related pay has been a controversial topic because of its merits and drawbacks, which will be discussed in this paper. It also address about whether a remuneration model will be applied for all pay structure or not. Performance-related pay has been an important part of human resource management for many years. It isShow MoreRelatedTraditional Bases For Pay Practices991 Words   |  4 PagesTraditional bases for pay refers to longevity, seniority pay practices, performance appraisal methods, merit pay, and performance appraisal methods. Organizations award their employees raises based on their job performance or their seniority. Many companies only award their employees raises based on their job performance and not their seniority. 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