Pay for Performance: The Challenges

Most workers believe that those who work harder and produce more should be rewarded accordingly. If employees see that pay is not distributed on the basis of merit, they are more likely to lack commitment to the organization, decrease their level of effort, and look for employment opportunities elsewhere.4

Pay-for-performance systems , also called incentive systems, reward employee performance on the basis of three assumptions:5

Get Managing Human Resources, Eight Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.