Pay for Performance
August 4, 2013
An organization can measure the effectiveness of their pay-for-performance plans in a variety of ways. Some of those ways that have been researched through some companies and how they were implemented are as followed, one would be to have guidelines that are set forth and then actually put into motion by following through on them. This has been one of the problems that have dealt with pay-for-performance, it was found that those guidelines that were written and established were not followed through on and something like this program that was meant to be for the good and better was in turn a let down to the companies and CEO of them because of not following through (Zingheim, 2006). A good example of this would be how this company states that they use the pay – for – performance; “We do this by creating understanding and responsibility throughout the workforce by translating or cascading the goals of the organization into goals, objectives, skill needs, and behaviors our employees can influence. These are part of our total reward strategy. We use variable pay to focus on goal performance because results can vary from year to year. Also, we use base pay to pay for the increasing value employees are expected to add over their careers. Base pay is determined as a result of employees acquiring and applying critical skill and competency to their work (Zingheim, 2006)”. From an employee’s perspective however, there are some disadvantages of using a pay – for – performance plan. Some of those disadvantages are “they can create contention among employees, can cause employees to fear giving managers their input for changes, and employees are often resistant to company changes (Johnson).” Creating contention among employee’s leads to certain problems such as favoritism among others that they may feel is happening when really not (Johnson). This is common when you have a pay – for – performance program. Those that...
References: Johnson, R. (n.d.). What are the advantages & disadvantages of a pay-for-performance policy?. Retrieved from http://www.ehow.com/info_12013917_advantages-disadvantages-payforperformance-policy.html
Mayhew, R. (n.d.). Advantages & disadvantages of pay-for-performance policies. Retrieved from http://smallbusiness.chron.com/advantages-disadvantages-payforperformance-policies-44264.html
Zingheim, P. (2006, July 17). How to really pay for performance : something to show your ceo?. Retrieved from http://www.hr.com/SITEFORUM?&t=/Default/gateway&i=1116423256281&application=story&active=no&ParentID=1116442772712&StoryID=1152059179635&xref=http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=4&ved=0CEIQFjAD&url=http%3A%2F%2Fwww.hr.com%2Fhr%2Farticles%2Fhow_to_really_pay_for_performance_something_to_show_your_ceo__eng.html&ei=f_b-UbCzJY3I9QTavYD4BQ&usg=AFQjCNHaGulomBN9QykSzBqSir9iqosT-Q&bvm=bv.50165853,d.aWc
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