The advantages and disadvantages of performance based remuneration.
The advantages and disadvantages of performance based remuneration.
Some may applaud its ability to align employees with strategic objectives and key focus areas of the business, whereas others feel that it serves more to censure their performance and affect their pay.
The truth of this is that it works as reward system like a gold star in first grade as it reinforces the effort and etiquette that you want to see more often and increases the probability that employees will strive to achieve. As they are now aware of the rewards. Those of course who don’t receive the rewards may feel motivated to work harder in order to receive the benefits. Rewards make a difference in the attitude, performance and productivity of employees.
The Pros of Performance based Remuneration:
The Cons of Performance based Remuneration:
Performance based Remuneration has its benefits and its limitations. However, it is the best opportunity to ensure that outstanding employees are retained and continue to make their astonishing contributions.
The other side to note is that nothing demotivates a high performer faster than the realisation that those that contribute much less in the organisation still receive an equal pay.
Implementing this system into your organisation may cause issues related to:
Duration vs Performance:
Those that have worked there longer have been performing longer, but not necessarily better.
Teamwork vs Recognition:
We can’t argue how unfair it is to have the lowest performing team member share in the glory of your individual hard work.
Just to name a few, but there is a cloud-based software designed to make processes such as these easy, simple and efficient. While ensuring its effectiveness and benefits not only assist the organisation but the individual employees as well.
