Pay, Reward and Performance

Pay, Reward and Performance

INTRODUCTION

The goal of any remuneration framework is to attract, inspire and hold great staff. Employees have many reasons to go to work each day, pay being one of the main reasons for their commitment (Tulgan, 2001). From a business' point of view, the key is to structure remuneration ideally to get the most efficiency from employees and enabling them to recognize who the capable workers and how they are to be compensated, kept motivated and retained (Datta , 2012). Pay for performance (PFP) is an imperative apparatus for a firm attempting to enhance worker execution. A properly designed PFP scheme can inspire the member of staff to work smarter, harder and be aligned strategically with the organization. It can likewise enhance retention and recruitment. If inadequately composed, the purpose can be impaired. This paper will examine PFP schemes, tangible and intangible rewards, the advantages and disadvantages of PFP. It also includes a critical review of the current literature, which is used to show key findings and recommendations on how to get the best of out of PFP schemes.

TYPES OF REWARDS

Intangible rewards are those that exist in the workplace. They can be an accomplishment, challenge, variety, responsibility, being independent and career development. They likewise integrate status, recognition from management and subordinates, personal fulfillment, and the feeling of being important (Aguinis, 2013). Workers are meant to be enticed to creating results that have high quality when they have pride in their work, and believe that what they are doing is critical to the success of the group, will gain them rewards (Özutku, 2012). An employee should expect things like a recognition from management to having their photo in the weekly work paper as employee of the week as this will promote the PFP scheme. Knowing that they will be recognized employees will be motivated to work harder to meet the assigned targets.

Tangible rewards are separate from the employment. It contains components such as pay, advantages, stability in the organization and a social environment. It can also include salary increases, bonuses based on merit and wages that are very competitive and it can include paid time off as compensation (Aguinis, 2013). To increase productivity by paying employees premium pay compensation that is more than the traditional wage bracket offered by different businesses for the same work. It can increase productivity by boosting employee's spirit, urging loyalty within staff to the organization's (Yoon, Sung & Choi, 2015). Employees can expect things like higher commissions, bonuses at the end of the financial year based on a rating in their performance evaluation to work lunches and paid days off.