Bachelor Thesis from the year 2011 in the subject Business economics -
Business Management, Corporate Governance, grade: B, University of
Cambridge, language: English, abstract: Pay for performance, is a
motivational aspect in human resource management in that the hired
workers receive increased benefits for their work output if the team
they belong to, department or group reaches certain set targets by the
organization they are affiliated with. According to Conyon and Murphy,
(2000) and Bebchuk and Fried, (2006), pay depends on performance of an
employee in relation to the threshold set as measurement. Pay for
performance has different categories and they include the following:
Competence based payment rewards and training links directly with
competency platforms, measured upon on the employee demonstrating
specified qualifications like: identifying, analyzing and solving
problems, taking responsibility and making critical decisions concerning
job description, leadership qualities traits that are relevant to the
job, customer satisfaction i.e. good interpersonal skills, dealing with
conflicting views and means of resolving them or having certain
qualifications. Profits resulting to payments of bonuses or being given
shares according to organization performance in their set financial
years; this is common and well embraced in the private sector, in which
share options as a means of reward are offered to senior managers or top
performers based upon organization criteria. Profit related pay has lost
its value and appreciation from the time government stepped in and did
away with tax exemption on Performance for Pay schemes. The main
criteria followed in PFP are: setting goals, results analysis and
connecting the streams of accomplishments to rewards which is in form of
payments. The objective and main purpose of pay for performance is to
benchmark clear goals and materialize employees with the firm's reasons
for existence; to inspire workers through exten
