Individual Perfomance Related To Pay
Individual Perfomance Related To Pay
Individual Perfomance Related To Pay
Performance related pay (PRP) were first introduced in the United Kingdom in the
1980s. It was hoped that many organizational performance salaries would make a
difference in the organization. (Kessler I, Purcell J , 1992). As Armstrong (1999)
noted, there was a great deal of anticipation since performance-related payroll
reports were first created. But the proposals did not yield the expected results at
the time. (Pual Suff et al, 2007). Various scientists have argued about PRP and its
motivational tools. The advantages of PRP are that it provides a tactile means of
identifying individuals' achievements, direct encouragement, and flexibility to retain
key staff. They have also argued that the criteria for paying for performance in this
way means that it can be discriminatory, eliminating a large number of high-
performing employees and preventing a sense of equality. (Pual Suff et al, 2007).
PRP is built on a foundation on which reward can nurture correct behavior. It is also
a powerful incentive for the financial institution to influence the efforts of
employees on behalf of the organization. However, some theories state that money
can act as a goal in itself and that employees can value external status and internal
acceptance as a symbol. One of its theories, Maslow and Herzberg’s theories of
'needs', focus on the innate aspects of the job and argue that people can get the
most out of work, such as responsibility, success, and acceptance. Other critics of
the PRP also point out that such pay proposals are coercive and may encourage
misconduct. For example, teams focus on a single effort at the expense of work.
(Pual Suff et al, 2007)
One thing that needs to be talked about specifically in this thesis is when it comes
to employee self-motivation. There (Gerhart & Fang, 2014) argues that they are
looking for what needs to be implemented as soon as possible to have a higher
relationship with wages. Thus, the required job can be executed quickly. (Fang,
2014). Further confirming this, (Pupato, 2017) noted that the company's employees
provide increase growth for the members of the organization to achieve work goals.
It can, in the end, take employee acceptance to the surface with certain
consequences that lead to the psychological well-being of employees.
In general, with the achievements of the staff of any company, the individual must
ensure that the payment method and benefits are compensated. It is noted that it
currently represents skills, experience and knowledge capital, taking into account
that it leads to enhanced activities. Therefore, this motivation helps the
management of any company to formulate action plans for their staff and to create
work ethic for each staff through effective work ethic. Furthermore, in doing this, it
is important to understand that differences in staff performance and skills will be
individually identified and a proper payment system will be provided. This is
because, on the one hand, the manager must adhere to their specific pay scale for
each employee performance measurement to ensure that the input and payment
system is balanced. ( DeWitt and Hamel, 2002)
According to (Pual Suff et al, 2007) , they see IPRP as an advantage that provides
direct encouragement. It is also used as a tangible means of recognizing victory. It
is also believed that ‘performance’ generates a culture. Moreover, IPRP helps to
improve target setting as an advantage. They say that it improves personal
performance, productivity, quality of work, and so on. Focus employees on
improvement. Rewards the best actors, aids corporate change, recognizes poor
performance, and flexibility helps retain a valuable staff.
3. IPRP in Different context
According to (Peter and Reilly, 2005), the efficiency of the public sector is
determined by performance-related salaries. For example, they point out that
payments related to individual performance in France and Madsen are limited to a
minority of the public sector. It also means that only one tenth of the employees
receive it. However, research has shown that some people find satisfaction, relief,
and the inherent reward of a job rather than pay. For example, they point out in
the 2002 Public Service Productivity Report that public service is rarely referred to
as a salary motivation.
However, bonus schemes are designed to ensure that only a very small number of
employees receive no pay and note that there was no empirical link between wage
fairness and workplace behavior. Analyzing this further, the manager has
encountered minor positive changes due to the introduction of performance pay,
and in the context, multiple studies confirm the political and operational difficulties
of successfully introducing any major program of pay reform in the public service.In
the private sector, individual performance pay is seen as a very good means of
communication. They see it as an economic necessity. In a competitive economy,
wages can be adjusted based on individual circumstances. However, it is used as a
key staff retention tool in the private sector. (Peter and Reilly, 2005)
According to Brown and Haywood (2002), PRP is a stress factor for employees,
and many line managers are of the opinion that staff tend to put more pressure on
them. They also achieve motivation and goals through the rewards and incentives
offered for each performance. However, it is not uncommon for employees to feel
pressured as their promotions and evaluations are highly tied to a performance-
based approach. This causes workers to feel more stressed and can even lead to
the collapse of a staff member. (UKEssays., 2018)
Goal setting theory, however, implies that the primary criterion for effort is the
achievement of personal goals. (B .Corgnet et al, 2018). According to (Mu’izzuddin,
et al., 2017) it can be seen that personal goals stimulate an increase in the effort
generated by incentives. Challenging goals lead to better goals than easy ones
because people have to put in more effort to achieve them.
Conclusion
The purpose of this long essay on individual performance-related pay is to examine
the pros, cons, and contextual differences in drawing its perspectives. In summary,
individual performance-related wages are a recent development in the human
resource management literature that began in the UK in the 1980s. Although these
payments are said to be one option for different pay scales, such as merit-based
pay, seniority-based pay, and peace-based pay, they are widely used by
performance-based payroll companies that are relatively highly competitive.
Previous research by service-oriented organizations such as finance, auditing, and
IT confirms that there is not only a positive aspect, but also a negative outlook on
individual performance-related pay. Finally, based on previous literature findings, it
is suggested that the payroll system associated with each performance, such as the
number of employees, the performance appraisal system, market competitiveness,
corporate profitability, and corporate culture, is highly influential.
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