The Case for and against Pay-for-Performance Systems



The Case for and against Pay-for-Performance Systems

Introduction

It is often very difficult for overstating the extent to which majority of the managers and people advising them actually believes in the redemptive reward power. In addition, the majority of the U.S Corporation uses various types of programs that tend to motivate the employees in trying to compensate to one index of the performance for others. However, majority of the striking is examined rarely that people will perform well if they are promised some kind of incentives (Werner & Dudley, 2009). Through this practices and assumptions linked with it are persistent, however a growing collection of evidence support an opposite view. In this case it has been observed that pay scale incentive might not lead to assure that employee will perform well. As highlighted by Kohn that argues, PFP incentives do not motivate employees to improve their performance. However, there is a mixed review on this issue, as Charles claims that PFP system not really direct effect the firm's objective.

Case Objective

Is Performance for Pay system (PFP) a very successful tool in an organization and can it led to attain a competitive advantage through loyal and motivated workers?

Discussion and Analysis

It is a fact that Incentive pay is usually set to reward specific performance results rather than simply for time to work. While incentives are not an answer to all challenges of management, may have a great influence on improving worker performance. One of the biggest challenges for companies is to manage human resources in new work patterns. Indeed, various economic and technological reasons why, increasingly, a "work" is associated with the notions of competence, project and compensation rather than traditional notions of place, task, hierarchical position or salary (Rosenthal, 2005). This trend can be seen concretely in the use of tele working, outsourcing activities, the use of temporary or simply flexible and irregular hours. The incentive system exists in almost every enterprise. However, with the help of many companies fail to achieve the desired objectives: to increase productivity, interest in the performance of ordinary employees, etc.

The Pros and Cons of Pay for Payment

With all the criticism made on Pay for Payment system, it is believed that Performance based pay increases the result for straight forwards manual tasks. Basically, Pay for Performance (or output) is a form of incentive that seeks not only the quantity but the quality of services provided. Moreover, the growing body for evidence from the social psychology and behavioral economic lead to indicate that the reward would actually undermine motivation and it worsen the performance on complex cognitive task more specifically when motivation is high to begin with (Nicholson & Berger 2008).

Despite of these still it is believed that Pay for performance system are really helpful for motivating employees to work not just individually but also in a team to reach the goal more efficiently. From the case, one evaluates the prospective of Charles, as under such type of bonus system, ...