Advantages And Disadvantages Of Performance Related Pay

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Register to read the introduction… Illustrated by author, adapted from (Perkins 2008)
6.1 Expectancy
Expectancy is the individuals own assessment of whether performing in a particular way will lead to the desired performance objectives. If sales targets are perceivably achievable, then the employee expects they will achieve them therefore are motivated to do so, expecting remuneration. Conversely if the sales targets are too high the expectation of fulfilling them will be lower, resulting in declining motivation and, ultimately poor performance.
Next should take employee expectancy into consideration when setting their goals, if a sales objective is perceived as unreachable, the employees will instantly feel unable to achieve it. Economic factors such as the recession may result in Next having to reduce their sales targets making them more realistic, to ensure there is not a negative impact on expectancy.

6.2 Instrumentality
Instrumentality is the belief that achieving the desired performance will result in a reward. Cases of poor instrumentality occur when the employer fails to reward good performance, by putting policies and measured procedures into place Next can avoid low motivation. If employees feel that they have some control over the rewards process higher levels of trust will be
…show more content…
Available at: http://www.nextplc.co.uk/corporate-responsiblity/our-people.aspx (Accessed: 24 October 2011).

Personneltoday (2004) Pay and prospects still the essential motivators. Available at: http://www.personneltoday.com/articles/2004/11/02/26479/pay-and-prospects-still-the-essential-motivators.html (Accessed: 26 October 2011).

Sharp, R (2011) Performance-related pay: the 2011 XpertHR survey. Available at: Performance-related pay: the 2011 XpertHR survey (Accessed: 25 October 2011).

Stone, Raymond (2005) Human Resource Management. 5 London: Milton.

Thorpe, Richard (2000) Strategic Reward Systems: Financial Times/ Prentice Hall.

Unison (2001) Performance Related Pay. Available at: http://www.unison.org.uk/acrobat/B871.pdf (Accessed: 7 November 2011).

Welcometoecxellence (2007) Welcome Host - customer service training. Available at: http://www.welcometoexcellence.co.uk/trainingprogrammes/welcomehost.asp (Accessed: 15 November 2011).

Williams, N (2009) Performance-related pay hit during recession. Available at: http://www.personneltoday.com/articles/2009/10/28/52751/performance-related-pay-hit-during-recession.html (Accessed: 27 October

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