Book Report

Pay For Performance

[Name of student]

Pay For Performance

Literature review

In this modern era, to keep up with the pace of the gowning needs of the customers, organizations need to focus more and more on the performance of its employees. An increased performance of the employees always results in an increased outcome and thus the organizational growth is not compromised by the efforts of the employees. Pay for performance is a terminology which is implemented in success driven organizations all around the globe. This is actually paying the employees in return of their extra efforts, such as incentives, and is a compensation system in general (U.S. Merit Systems Protection Board, 2006, pp.3-21). Many scholars have focused the effectiveness and the dark sides of pay for performance in their work, when it comes to performance of employees. The literature that exists on this topic is vast and has been comprehensively done, in which issues are also highlighted along with the brighter side. In some of the cases, the pays of the employees are based on their performance. This is considered to be an effective way of dealing with the employees for getting maximum outputs, but not necessarily in every organizational setting. As a result of historical developments within the field (and the influence of the literatures of labor economics, sociology, and business policy), compensation is now viewed by work psychologists as a system within the organization rather than a set of techniques. The focus has shifted away from the psychometric properties of compensation techniques to the integration of the compensation system with other organizational systems in order to achieve organizational effectiveness. It is our belief that this more macro focus to the study of compensation is going to continue, especially in light of the ongoing globalization of business practices. The next big challenge to be faced by compensation researchers and practitioners alike is how to best pay people in a global business environment (Baker, 2003, pp.4-12).

A report by U.S. Merit Systems Protection Board, which was presented to the president of the United States, has analyzed the effectiveness of a well developed pay for performance compensation system. This report reviewed the important decisions which are taken while deigning an effective pay for [performance compensation system. The decisions are usually made by the top managements of the organizations and the corporate culture and the theme of the operations of the organization should be considered when the ...