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If any company management is willing to give proper compensation packages to the employees so that they can be motivated, then the involvement of performance management along with the compensation management is very important. It is fact that if any company management has no…
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Download file to see previous pages aware of different technological tools and techniques and they can use their knowledge and skills in their work (Creating a Successful Performance Compensation System for Educators, 2007). Therefore, we can say that the knowledge base of some of the potential employees is the actual factor to implement the performance based compensation. Because these employees can work better as com-pare to others just because of their capabilities (Creating a Successful Performance Compensation System for Educators, 2007).
The implementation of performance based pay or compensation packages is important in order to reward or appreciate the hard working employees and in order to punish the lazy employees too. It can be negative or positive reinforcement for the employees so that they can work hard in the future or at least they can try to maximize their efforts. Positive reinforcement can be in the form of prizes while the negative reinforcement can be in the form of punishments or highlighting the bad performance in the meetings. In other words we can say that in this knowledge worker type environment, the best and the most appreciated compensation style will be the evaluation based on the performance appraisal. Employees can get immediate feedback in the form of rewrads or punishments for their performances. This performance based compensation can also help to reduce the likelihood of nay priority or biasness towards any specific employee.
If we talk about the major forms of performance based pay styles then usually companies adopt these four major forms of these pay packages. That includes gain sharing, profit sharing, performance bonuses and the other is the skill based rewards (Jonathan, 2010). The details of all the three forms of performance based pay is given below;
These Performance based bonuses are very widespread, because they are almost basic type of performance-based pay. In order to award such bonuses to the employees, a company manager may assess the ...Download file to see next pagesRead More
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