Performance-related pay or pay for performance is a salary paid relating to how well one works. Car salesmen or production line workers, for example, may be paid in this way, or through commission.
2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
3. Performance Linked Compensation
• Performance-related pay
or pay for performance is
a salary paid relating to
how well one works. Car
salesmen or production
line workers, for
example, may be paid in
this way, or through
commission.
4. Performance Linked Compensation
• Pay-for-Performance ("PFP")
systems tie compensation directly
to specific business goals and
management objectives. To do
this, companies must deliver
competitive pay for competitive
levels of performance, pay above
market for exceptional
performance, and reduced pay
for poor performance. To achieve
this, companies must match
measurable and controllable
performance targets to company
objectives.
5. Performance Linked Compensation
• Many employers use this
standards-based system for
evaluating employees and for
setting salaries. Standards-based
methods have been in de facto
use for centuries among
commission-based sales staff:
they receive more pay for selling
more, and low performers do not
earn enough to make keeping the
job worthwhile even if they
manage to keep the job.
