Performance related pay (PRP) can be defined as remuneration that is directly related to employee performance. This method of setting payment has gained popularity with many employers over the last couple of decades Feb 18, · As the term suggests Performance Related Pay or PRP is the pay offered according to the performance, it can be individual, group or company. PRP often leads to enhanced performance of the employee and reciprocate by improving the performance of the company. It provides extrinsic motivation through financial rewards to the individual employees, group, company performance Estimated Reading Time: 10 mins PRP is similar to profit-related bonuses, but the specific targets to which PRP applies usually relate to individuals and not to groups, let alone the organisation as a whole. And the focus is often on “big objectives ” or outputs rather than inputs such as skill and teamwork (Cannell and Wood, )
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We use cookies to enhance our website for you. Proceed if you agree to this policy or learn more about it. Type of paper: Essay. Topic: ManagementWorkplacethesis on performance related pay, PerformanceCompanyOrganizationEmploymentEmployeeHuman Resource Management.
As the term suggests Performance Related Pay or PRP is the pay offered according to the performance, it can be individual, group or company, thesis on performance related pay.
PRP often leads to enhanced performance of the employee and reciprocate by improving the performance of the company. It provides extrinsic motivation through financial rewards to the individual employees, group, company performance Corby, S.
et al, p. PRP aims to spread the wages equally, so that the objectives of the business can be fulfilled completely. PRP is also covers way to check the output by the employee and the behavior towards customers as well businesses like supermarkets and showrooms etc, thesis on performance related pay.
The employers want to thesis on performance related pay their companies' image and use it as a strategy to be put forward, as it is thesis on performance related pay way to achieve the desired goal. PRP has gained significant importance over a decade in the private sector.
What is PRP? Pay Related Performance is a kind of payment system which depends on the employees' performance, thesis on performance related pay. The financial incentive is usually given after completing the assignment, in a specified time Edwards and Wajcman, pp. The monetary compensation is connected to the output that the employee, group or organization has presented. Money is the main remuneration by thesis on performance related pay an employer can extract the best of his workers.
It can be appreciated as a way to motivate the workers and the managers alike. PRP started off from the private sector but now it has started to find its way into the public sector as well Marsden and Richardson, pp. Since the beginning of industrial development, the culture of favoritism and biasness was spreading across all fronts of the global market, thesis on performance related pay small shop owners to big-league organizations.
The PRP tends to reduce the effect of the hostile employees, making the business environment a better place to work. Since it is related to the hard work of the employees along with an opportunity to work extra hard to earn it Kessler, Purcell, pp. It helps the employees to have the will to work harder, in order to earn the incentive, and by doing so, improve their performance and develop the organization. The performance related pay improves the work on the workers' level and the organizational level.
As Pfefferpp. PRP planning is said to be such a process through which an organization layouts the rational framework of human capital programs, policies and practices in order to achieve a common target that is incorporated with the strategic plan of the organization. Implementing the strategic human capital plan is considered to be the most important step by the organization so as to create a highly efficient, performance based organization by acquiring, motivating, recruiting and rewarding those individuals or group of individuals who comes under the head of high performers and workforce of top quality.
This strategic human capital plan in transformed in to the roadmap so as to achieve continuous level of improvement in the output and also becomes the essential framework for the purpose of transforming corporate operations and culture of the organization in its best interest Boxall et al, pp. Even though the content of the strategic human capital plan along with its structure and format will vary from one organization to another organization, there are some core elements that are always included and should be included in the PRP strategic plan.
This plan should consist:. The Link between 'Performance' and 'Pay' In the schematics of PRP, the employee has to work hard to earn his incentive. The employer has to amplify the culture that the fiscal reward thesis on performance related pay present only on the basis of production thesis on performance related pay high quality work.
According to Kessler and Purcell pp. PRP has proved to be one of the most successful payment methods. It is beneficial for employees and employers both. With the help of PRP, the workers earn their pay by working hard.
The employees know that if they work hard, the result will be monetary reward and thesis on performance related pay from the employer, both Boxall et al, pp. It clearly shows where a worker stand in the hierarchy of the office. The employer can apply this payment method to ensure that the company's objectives are not evaded by the employees.
It can also be used to make sure that the overall performance of the company is not degrading. A successful company always moves towards good, better and best.
The employers can use PRP to attain the level of performance that will lead their company to triumph. The employer can visibly see the people who are hard working and can distinguish between them Marsden and Belfield, lse. The employer can decide, depending of the performance of the employees, which person is hard working and will be an asset to the company.
While the one who lets the team down, can be let-go-off. In this manner, thesis on performance related pay, the company can keep the image and performance going at the ever-competing rate of the corporate world. The employees are able to increase their pay by performing well in the company. The employers can increase their productivity thesis on performance related pay improving on the workers.
The PRP encourages the labor to work hard, increase productivity of the company and to take the company to the next level. PRP induces the employees with the sense of belonging in the company. The objectives, the goals and aims of the company are revised and brought forward in a different light every time the company seeks to pay the employees as per their performance.
The reigning culture of favoritism leads to a hostile environment in the office. The layout of PRP allows the employers to have a non-biased perspective of their employees. On the other hand, the workers feel that they are not being ignored or distinguished from the hand-picked few of the employer Pfeffer, thesis on performance related pay. All the employees who work hard are ensured that they will get the due encouragement and reward for their efforts.
The managers also are at peace with the concept of people working for the company, not for the sake of work thesis on performance related pay. Biasness is diminished by PRP and workplace environment grows to be better, resulting in better results and increased efforts. The PRP is the best method to look into the employers' mind.
The employers send out a clear message that the employees have to attain a certain level of efficiency and proficiency in their fieldin order to survive in the company Edwards and Wajcman, chap, thesis on performance related pay. The criteria is set by the employers so that the quality of the products can be maintained and to work on them. The employees then keep a clear mind in order to achieve those goals, knowing that they have to strive for the best for keeping a position in the organization.
The employees and the employers both start to focus at the task at hand. The driving force of the employees is the monetary gain and the employers their image in the corporate world. The employers have to work to retain their image while the employees have to work to retain their positions thesis on performance related pay the company. The employers need to re-assess the objectives and work on the weaker aspect of their organization Corby et al, pp.
PRP reminds the employers to review their efforts in the fragile parts of their organization and take it as a whole. The employees tend to work thesis on performance related pay, monitoring their own performance and propelling their careers forward.
The employees who work hard have a great career before them and they have a sense of achievement when their work proves their word. PRP has shown its significance in the commercial world, but it has flaws which need to be overcome. Thesis on performance related pay the Work of the Managers Twofold PRP does have advantages but one of the most negative effects of it is that the managers, supervisors or company owners have to work double in order to keep the regulation of PRP in control Boxall et al.
The managers are overburdened and most of them feel that it is another obligation that they have to take care of. The employees, who are competing with each other, feel animosity against each other and the environment can lead to hostility. It is observed that the workers keep angst on behalf of the other employees and it leads to devastating effects on the workplace. The thought behind PRP does not need any effort but implementation of the program needs efforts, physical, manual and financial also Marsden and Belfield, lse.
The program has needs which a manager or the employer has to work hard to get. The implication of PRP can be very positive but the implementation takes toll on time and effort both. Some of the employees have observed that their efforts are not accounted for, only the results are appraised Pfeffer. This is another drawback of the performance related pay. The workers need to be appreciated, not only for their production and performance, but for their efforts as well. Every organization has to suffer, and should always keep in mind, thesis on performance related pay, recession.
If PRP is implemented in any company and the recession takes toll on the employer, the owner may not be able to give the workers their due share.
It can result in resignation of the staff, thesis on performance related pay. Leaving a position, is not only detrimental to the employee, but to the employer also. It is suggested that PRP leads to a stressful working environment. The employees have to be on their toes all the time.
Every day they have to strive for the very best. The employees perceive it as constant work. They no longer can work at the median level. The ever-present doubt of getting sacked remains in the heart of the worker. PRP is a great tool for the individual's performance assessment. But it is detrimental to the concept of teamwork. PRP, as the term indicates, the reward on the basis of performance.
Teamwork is neglected in the PRP and individual is given more attention. The essence of team work is neglected in the run for individual efforts and performance. This drawback of PRP is one of the most influential in the organization. Although the culture of favoritism is pushed aside by PRP but the biasness may remain there. The managers are the judges of the performance of an employee. If a manager has a grudge against any employee, then it results in the judge being too subjective, or finding unnecessary flaws.
Every staff needs a boost of moral and motivation.
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PRP is similar to profit-related bonuses, but the specific targets to which PRP applies usually relate to individuals and not to groups, let alone the organisation as a whole. And the focus is often on “big objectives ” or outputs rather than inputs such as skill and teamwork (Cannell and Wood, ) Feb 18, · As the term suggests Performance Related Pay or PRP is the pay offered according to the performance, it can be individual, group or company. PRP often leads to enhanced performance of the employee and reciprocate by improving the performance of the company. It provides extrinsic motivation through financial rewards to the individual employees, group, company performance Estimated Reading Time: 10 mins Performance related pay (PRP) can be defined as remuneration that is directly related to employee performance. This method of setting payment has gained popularity with many employers over the last couple of decades
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