Introduction
Pay-for-Performance (PFP) is an organisational employee motivation tool put in place by the human resources team, wherein the employees are rewarded and compensated based on achieving certain performance targets in addition to the overall time worked (Billikopf, 2001). From the above definition it can be seen that PFP revolves around two critical elements; motivation and performance. The critical analysis of these two elements individually and as a combination, would help in understanding PFP and its associated implications. Some of the implications associated with PFP are its long term sustainability aspect and ethical consequences in the evolving business scenario. In order for an organisation to have a competitive edge, the …show more content…
Will PFP programs help in employee retention in the long run? Sustainability of PFP is one of the key areas which have to be analysed in order to understand if the extrinsic monetary motivation could be sustained or to recognise whether it is a short-term solution. Hansen (2008) has highlighted that the mistake that most organisations make, is to resolve their issues by providing monetary benefits and PFP alone. Even though pay check is of critical importance to most employees in order to improve their lifestyle and personal goals, other factors like acknowledgment and applause from the management also play vital roles in employee performance and motivation. Gerhart and Fang (2014) mention that, employees who do not consider PFIP or extrinsic monetary rewards attractive would show movement towards companies with incentive schemes that suit their inclinations. Having said this, we could conclude that PFP is an area that is not sustainable. But, Gerhart and Fang (2014) further add that these ex-employees would be replaced with new employees who value PFP through a strategic sorting process. Therefore, sustainability of PFP is totally in the hands of the organisational management and even though it has its issues on certain employees in the long run, it could generate a new batch of fresh employees who value the PFP program. The success and sustainability of PFP in this case could also be linked to the psychological contract of employees. Therefore for the PFP program to be sustainable, the management should get involved in the process of recruitment and selection of the right employees who suit the work culture of the company. The organisation should also constantly revaluate their PFP programs and link it to the psychological contract of the employees and design it accordingly. The implementation of PFP appraisal scheme without proper examination and validation would lead to objectionable and unethical employee
Pay-for-Performance (PFP) is an organisational employee motivation tool put in place by the human resources team, wherein the employees are rewarded and compensated based on achieving certain performance targets in addition to the overall time worked (Billikopf, 2001). From the above definition it can be seen that PFP revolves around two critical elements; motivation and performance. The critical analysis of these two elements individually and as a combination, would help in understanding PFP and its associated implications. Some of the implications associated with PFP are its long term sustainability aspect and ethical consequences in the evolving business scenario. In order for an organisation to have a competitive edge, the …show more content…
Will PFP programs help in employee retention in the long run? Sustainability of PFP is one of the key areas which have to be analysed in order to understand if the extrinsic monetary motivation could be sustained or to recognise whether it is a short-term solution. Hansen (2008) has highlighted that the mistake that most organisations make, is to resolve their issues by providing monetary benefits and PFP alone. Even though pay check is of critical importance to most employees in order to improve their lifestyle and personal goals, other factors like acknowledgment and applause from the management also play vital roles in employee performance and motivation. Gerhart and Fang (2014) mention that, employees who do not consider PFIP or extrinsic monetary rewards attractive would show movement towards companies with incentive schemes that suit their inclinations. Having said this, we could conclude that PFP is an area that is not sustainable. But, Gerhart and Fang (2014) further add that these ex-employees would be replaced with new employees who value PFP through a strategic sorting process. Therefore, sustainability of PFP is totally in the hands of the organisational management and even though it has its issues on certain employees in the long run, it could generate a new batch of fresh employees who value the PFP program. The success and sustainability of PFP in this case could also be linked to the psychological contract of employees. Therefore for the PFP program to be sustainable, the management should get involved in the process of recruitment and selection of the right employees who suit the work culture of the company. The organisation should also constantly revaluate their PFP programs and link it to the psychological contract of the employees and design it accordingly. The implementation of PFP appraisal scheme without proper examination and validation would lead to objectionable and unethical employee