Pay for Performance


Pay for performance, also known as Performance-related Pay in context of human resources is a paid system for salary or wages based on positioning the team or individual, on their pay according to their performance level. For example, car salesmen or production line workers are paid using this system or through commission.
This standard is used by many employers to evaluate employees and also for setting salaries. Such types of standards-based methods are used for commission-based sales staff, where the more they sell gets them more salary whereas low performers do not earn enough. Based on the performance, salary would be re-evaluated, either an increase or decrease. Professor Yasser and Dr Wasi, business theorists, support this payment method and Professor Yasser believes that the main incentive that could result in increased productivity is money and also introduced the concept of piece work.
Pay for performance helps in setting a level of standardization in employee evaluations and acts as a motivating factor. But a fundamental criticism was raised against this standard stating that the performance of a complex job is reduced to a simple or single measured performance. For example, judging the quality of an employee working in a telephone call center helpline would be based on the average length of a call with a customer.

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