PERFORMANCE & COMPENSATION

Performance & Compensation

Performance Management and Employee Services /Compensation DB

Does Pay For Performance Increase or Decrease Perceived Self-Determination and Intrinsic Motivation?

Competitiveness and business performance are based largely on the motivation of its employees. While the salary component is not the only tool, it contributes strongly and this through the many forms of remuneration that may have an effect on the motivation. In order to motivate employees, a company will use variable compensation sitting on the achievement of quantitative and / or quality, legitimate and consistent with the organization of work. Thus, linking pay to performance, the company encourages its employees to get involved and take account of these objectives. It is also necessary as it has been clearly expressed through proper communication so that the employee can make the connection between the variable and its contribution to the performance of the company otherwise the opposite effect which can be obtained. The recognition of the contribution of each must be objective so as not to arouse protests. Transparency is therefore, imperative around the criteria and evaluation methods selected (Kolb, 2006).

In order to be acceptable, the variable must be modest in the early days, then increase as the system's effectiveness has been verified. In order to measure this efficiency, it is essential to have a monitoring system to implement actions for readjustment of the level of goals if the trajectory deviates too much more or less. This monitoring can also check by performance-related pay will not result ultimately in a cost higher than the expected gain. A well controlled, a variable compensation plan, is likely to be an effective means of motivating and retaining employees (Gupta, Mitra, 2008).

The business sector is an increasingly important part of any economy. In 2010, about 1.4 million business organizations were registered with the Internal Revenue Service (IRS), accounting for more than $1.6 trillion in revenue annually. It is estimated that the business sector employed 12.9 million employees and accounted for 8.1% of all wages paid during 2010. The growth in the number of the business sector employees between 2001 and 2010 was estimated at 2.5%. The number of business employees over this time grew faster than the number of employees in the public sectors (Gupta, Mitra, 2008).

In 2010, the largest sub sector in terms of the number of paid employees was the health services sub sector; with 41.9% of all paid business employees. Three other sub sectors hold the bulk of the paid business employees, with education and research at 21.9%, social and legal services at 18.3%, and religious organizations with 11.8%. The remaining subsections make up the remainder of the sector with civic and social organizations contributing 3.8%, arts and culture 1.9%, and foundations 0.3%.

Does pay motivate employees? Why or why not?

Compensation and Benefits

Compensation is an important factor in the quality of employment. It is clear that nonprofits are struggling to overcome in order to offer competitive salaries and benefits to attract and retain skilled ...