Paying or Giving Incentives or Bonuses Based on the Performance of Every Single Employee - Research Paper Example

INTRODUCTION In today fast moving world, every single organization is trying to work hard and to generate well-oriented outcomes, in order to be the best one and to generate huge profits. Every organization has its own set of beliefs and activities. They work according to their own principles and according to their own thoughts as well as rules and regulations. When an employee gets a job in any organization, his or her main aim or motive is to work hard, to work with full zeal and zest in order to generate well-oriented and fruitful outcomes. When any employee will work hard, with full cooperation, in the end he or she will be compensated with good pay. Being compensated is a high-class achievement, which shows how people work in an organization, how they work in order to make their particular organization the best one. Compensation is always done in an appropriate manner. What so every work any employee will do, he or she will be compensated according to that particular work. Compensation is therefore term as a delicate job for the HR people, as they should always compensate in an appropriate manner, and they should compensate those who really work well and who really generate well-oriented outcomes. There are many organizations, which compensate because of the capability of an employee. For instance if a person who is an employee of any XYZ organization, he or she will only be compensated according to his or her skills and capabilities. No other source will help them while being compensated. This is a correct as well as an ethical way with the help of which one can compensate the employees. By this, employees also get motivated and thus as a result they will work hard in order to generate outcomes that are more fruitful. Motivating employees is a difficult task but along with this, this is termed as an important task. Because with the help of this people can be motivated to work harder and harder in order to generate better results. BENEFITS OF PERFORMANCE RELATED PAY There are various kinds of benefits, which are related to the performance of employees. When the performance of any employee is up to the mark, he or she will be automatically compensated based on his or her performance, this performance related pay is very much important and has many benefits. Incentive pay on the other hand is also important, which is given for special kind of work or performance rather than the simple work. Performance based pay actually indicates towards various Incentives, which are there to motivate the employees so that they can work harder in order to generate good results. There are different kinds of incentives, which can be awarded to those employees who work hard and are able to get the incentives. In many organizations, people get incentives on yearly or monthly basis, but the main and important thing is to give incentives to those who are eligible for those incentives and who are actually capable of getting them. When incentives are given to every single employee, this generally de-motivate those employees who work hard and are getting only some share which is equal to those who worked nothing. This is not a correct way to give benefits and an organization should make this important thing very much clear in order to award employees according to their capabilities. (Emmet, pg 460, 2008) Paying or giving incentives or bonuses, based on the performance of every single employee is an appropriate way to judge the capabilities of every single employee. It is the foremost responsibility of an organization to pay according to the capabilities of an employee and to make him feel proud of what ever he or she is doing. If any employee is working hard in an organization, then he or she should be compensated, in order to get motivated and to increase the self-esteem. Boosting an employee is an important element and it should be done in order to generate well-oriented outcomes. This technique should be adopted by every organization in order to enhance the level of work and to enhance the capabilities of every single employee. Work should be done in an appropriate manner in order to generate well effective outcomes. (klein, pg 34, 1995) ADVANTAGES OF PERFORMANCE BASED PAY: There are numerous advantages of performance-based pay. Performance-based pay is termed as the legal way with the help of which an employee can gain maximum output. By working with full devotion and dedication, an employee can gain for what he or she has done. Working in right direction is necessary for every single employee and with the help of this, he or she can gain maximum output. Performance-based pay is actually a pay, which is the legal way, and it is awarded to those employees who work with full dedication and devotion. This is the main reason why most of the people follow various methods as well as techniques of doing work with full devotion in order to get a better compensation with the help of which they can earn more and more and can acquire as much benefits for themselves and for their families too. No doubt, paying or giving incentives is one of an element with the help of which most of the organizations do motivate their employees. DISADVANTAGES OF PERFORMANCE BASED PAY: There are numerous disadvantages too of these performance based pay system. When people are being compensated based on their performance, they get bore and they get somewhat de motivated by this fact of doing routine work and getting the same pay. This is actually the perception of the some people or firms. There are some firms as well as some employees who want to do work in a different manner and in return they want to gain the outcomes in different manner too. Apart from these disadvantages, performance based pay is a system with the help of which one can ensure better work and can also ensure the better outcomes. RESPONSIBILITY OF HR PEOPLE IN GIVING PERFORMANCE BASED PAY: HR people are the one who works hard in an organization to generate better and better outcomes. People of HR are always in hurry and in such a situation where they can recruit the best people who can for sure work well and can work whole-heartedly in order to generate well effective outcomes. Compensation is also the main responsibility of the HR people. They should know and should measure that how to recruit and in the end how to compensate their recruited people. They should be well aware from this main as well as an important fact that how and by what methods they can compensate people so that their employees can work with full dedication and with full devotion. Compensation is also of different kinds. There are different methods of compensation. Compensating in small business and compensating in large business. Actually, compensation in small business is easier as compare to compensation in large business. In large business, HR people usually follow different kinds of techniques with the help of which they tend to motivate their employees, and in the end, they work with full devotion and generate well-oriented outcomes. Compensation based on their performance is a well-accepted technique, which is usually followed by most of the organizations or firms. in an organization or firm, when a person get a job, he or she is now require to work hard, to work with full dedication as well as with full devotion, in order to generate well-oriented outcomes. While working, one should always kept this main as well as an important thing in mind that doing right and effective work is needed by an organization and if you will perform in a right and effective way then you will get compensation on high rates and on the other hand, you will also get better and better benefits. Motivating is not a wrong thing, but motivating in a right direction for right and meaningful results is an important element. One should always try to keep this thing in mind that if you are motivating your employees, then you should motivate them for right and meaningful purposes and after motivating, them do compensate them with right methods. In this way, employees will for sure work hard, will also generate better and better outcomes, and will never loose any kind of work, which is directly or indirectly related to their organization. (Milkovich, pg 210, 1991) If we look at the above-mentioned quote, we can say that this is related to the ethical issue of an organization. One main as well as an important question, which arises here is that, what kind of pay is for what kind of performance?. This is an important question which should be answered in order to let all the managers know that how to give pay to their employees and on what basis. Paying them by their performance and everyone benefits is a management-based statement, which shows that there is some misguidance in the pay policy in an organization. People should actually get pay according to their work. They should be compensated based on their work and performance not by decreasing others benefits. If in an organization, employees are being compensated according to their performances, according to their work and their skills, then this is termed as an adequate pay policy, which means every one is being treated according to his or her work, which is being done. if this policy is adopted in every single organization, then the outcomes will be for sure in a positive way because when you are compensating your employees according to their performances, then it means those employees will for sure try to work hard, will work with full zeal and zest in order to generate well effective outcomes. This is a better way to motivate your employees and in this way they will give you better work and you will give them better pay. No one is neglected in this procedure and every one will get the equal share. This method should be followed by every single organization in order to generate well-oriented outcomes and to make every single organization the best one. (Friend, pg 278, 2006) The pay policy is an important element for each and every single organization, with the help of which one can get the equal as well as desired level of pay. One of the most important as well as an important policy based decisions which most of the employers make in order to develop their compensation program is actually from which point to start targeting their pay levels, competing with other organizations. Along with this, the pay-level policy also gives employers a better as well as an enhanced standard in order to assess their working and competitiveness. That particular assessment, therefore provides the basic source in order to set or to adjust the salary ranges and also to set the salary based guidelines that can positively affect the organizations ability in order to attract and also to retain employees and along with this to control the operating costs. (Dudley, pg 28, 2006) MEASURING FROM ORGANZIATION PERSPECTIVE An organizations pay policy always reflects the strategic business as well as the needs and the demands of the human resource of any organization. Unfortunately, there are many different organization pay policies, which also affect the future practices of other employers. The pay policy should be designed in such a manner with the help of which one can compensate their employees with full dedication and devotion and can make their employees feel comfortable. The pay policies are set according to the pay policies, which many other organizations set in order to generate well effective outcomes. It is the main as well as an important responsibility of an organization to decide a better as well as a motivating kind of pay policy, which can generate better outcomes. Pay policies are always design in relation to the work, which is done by the employees. If employees are working well, they will get good or handsome salary and if they are not working well, then they will not get the better pay. This is a correct way to judge or to measure the work, which is being done by the employees in an organization. (Hopkins, pg 163, 1992) There are many organizations who usually decide a basic pay plan and every employee is getting pay according to that particular pay plan. This is not a correct way to judge any employee. Because by this those who work and those who did nothing will get the equal pay and this is termed as a de-motivating factor for those who are working hard day and night with full dedication and devotion and are getting the equal share. (Heneman, pg 64, 1984) The best way to compensate is to first analyze that what work is done by whom, then the organization should see, whether he or she is capable of getting that particular pay and then in the end the firm or organization should compensate him or her. This is a correct way and by this way, people will get an equal level based on the work, which they have done. In this way, employees will work hard and will always try to work in order to generate well effective outcomes. (Gonring, pg 172, 2007) Compensation as mentioned above is a tough job and it should be done in an appropriate manner in order to generate well effective outcomes. Paying for their performance is a right way and every single organization should try to work hard in order to get the pay according to the level of work, which has been done by them. If in this world, every organization follow this policy then the results will be in a positive direction and employees will also get motivated and will try to work harder and harder in order to generate more and more. There are numerous factors, which can affect the working of an organization, and due to these measures, employees get de-motivated and thus generate less outcomes. If in any case this kind of situation arises, then an organization should try to decrease the pay because if employees are not working well then why can they get the good pay. Pay should always be in accordance with the work, which has been done by every single employee. (Hall, pg 33, 1998) CONCLUSION Many different programs are there which are related to increasing the performance of the employees with the help of which they can work hard and can generate well-oriented outcomes. Different programs are designed in order to make every single organization the best one. (Block, pg 264, 1996) Those employees who get the maximum amount of pay in return of the work, which they have done in order to increase the level of work of an organization are always working in a right direction in order to generate well effective work. People usually work in order to get the pay, but apart from this, there are people who work because they love to do work. Their motive is not to get the pay; their motive is to increase their knowledge. These people are the one who can really increase the level of an organization and can generate better outcomes. They should be in the end compensated with a good amount of pay so that their self-esteem can be increased and they can work in an effective manner. Therefore, measuring performances and then paying is an interesting way with the help of which one can get the maximum amount of pay, which he or she is requiring and for which they are capable too. It is also the main responsibility of the organizations to keep an eye on all their employees to check that what they are dong so that they can be compensated accordingly. (Hubbard, pg 27, 1994) REFERENCES George T. Milkovich, (1991), Pay for performance: evaluating performance appraisal and merit pay, National Academies Press, page 200-210. Jesse M. Fried, (2006), Pay Without Performance: The Unfulfilled Promise of Executive Compensation, Harvard University Press, page 270-278. R. Adams Dudley, (2006), Pay for performance: a decision guide for purchasers : final contract report, Agency for Healthcare Research and Quality, U.S. Dept. of Health and Human Services, page 20-28. Bill L. Hopkins, (1992), Pay for performance: history, controversy, and evidence, Haworth Press, page 160-163. Robert L. Heneman, (1984), Pay for performance: exploring the merit system, Pergamon Press, page 60-64. Phil Gonring, (2007), Pay-for-performance teacher compensation: an inside view of Denvers ProComp plan, Harvard Education Press, page 170-172. Brian J. Hall, (1998), The pay to performance incentives of executive stock options, National Bureau of Economic Research, page 30-33. Martin Emmert, (2008), Pay for Performance(P4P), BoD – Books on Demand, page 400-460. Marc-Andreas Klein, (1995), Top executive pay for performance: a research report, Conference Board, page 30-34. Peter Block, (1996), Stewardship: choosing service over self interest, Berrett-Koehler Publishers, page 260-264. R. Glenn Hubbard, (1994), Executive pay and performance: evidence from the U.S. banking industry, National Bureau of Economic Research, page 20-27. Read More