Benefits Of Pay For Performance Plans Essays

1033 Words Dec 14th, 2016 5 Pages
In this paper, I will address the pros and cons of using pay for performance plans in today’s business world. I will review the advantages of pay for performance plans in order to define what the expectations are of these plans and how each affect employee pay. I will further explore the consequences when expectations are not clear or well defined, which results in businesses often struggling to achieve organizational success as they do not have buy in from their team; a critical element in Pay for Performance Plan. In addition, I will detail various methods businesses have utilized in pay for performance plans and how they employ key performance metrics to determine individual effectiveness and achievements towards pay for performance plans. Last, I will detail the disadvantages of pay for performance plans and why some companies are choosing to stick with more traditional compensation plans as they claim that pay for performance programs are fraught with subjective, arbitrary and sometimes unattainable goals.
Keywords: Performance, Incentive, Compensation Pay for Performance
Pay or performance can be a motivating compensation strategy as it can be beneficial to both company and employee alike. Providing a compensation program that rewards employees for above standard performance can provide companies another level of cost control while also encouraging job satisfaction and company moral. That is not to say that pay for performance compensation structures don’t…

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