Performance based pay and career advancement Flashcards
What is it?
Performance-related pay is a means of rewarding employees through monetary compensation when they perform their duties in a manner that equals or exceeds a set of pre-determined goals or criteria.
What are examples of performance related pay?
An employer can provide motivation with direct payments to employees, such as pay increases, bonuses and commissions, as well as other methods including share plans, profit sharing and gain sharing.
Advantages of performance related pay
Provides a financial reward to employees directly related to improved performance
Should improve productivity levels, consequently improving levels of engagement
Rewards are generally predictable and easily calculated
Weaknesses of performance related pay
*Other employees doing similar work may expect similar rewards, even if their performance is not has good, leading to jealously and conflict
*A business may not be able to afford performance based pay
*Not all employees will be motivated by pay
What is career advancement
Occurs when a person takes a on a job that carries greater responsibilities or increased opportunities to provide leadership. For most people in the workplace, the opportunity to advance to a better job is an important objective in their career plans. This can occur within a workplace, or by moving to a new workplace.
Advantages of career advancement
*Can be a means of retaining valuable employees
*Can be used to reward past performance and provides opportunity to increase the contribution of employees in the future
*Will satisfy employees who desire a sense of achievement
Weaknesses of career advancement
*Promotion positions can be hard to create as they need purpose
*Employees may have to compete for a career advancement as roles are limited, this could create rivalries
*Employees may be promoted beyond there capacity
