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The Compensation Handbook, Sixth Edition: A State-of-the-Art Guide to Compensation Strategy and Design, 6th Edition by Dorothy Berger, Lance Berger

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36

New Developments and Issues in Pay for Performance

MARK D. CANNON

Peabody College, Vanderbilt University

Intense competitive pressures and the need for continual improvement have increasingly led organizations to turn to financial incentives to boost employee performance. As a result, the use of various types of pay-for-performance programs and the interest in understanding how to make these programs most effective are at a record high. Pay-for-performance programs are designed to accurately measure employee performance while aligning pay such that it rises and falls in accordance with variations in performance. More corporations have adopted pay-for-performance programs now than at any other time in history, and these plans involve a greater ...

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