Performance-Related Pay

Performance-linked remuneration (PRP) has been increasing in many organizations over the past two decades (Cadsby, Song & Tapon, 2007). The concept of remuneration related to performance is designed to encourage employees to motivate and to encourage ways to do what they want, as individual motives, motivations, and initiatives are different. The organization must take this into account and clarify the overall goals of the individual. This also meets the organization's goal to ensure that incentive programs function effectively.

In recent years, performance-linked remuneration (PRP) has been widely used as part of organization's personnel policy. Both the organization and its employees can benefit from performance-based compensation. "Whitfield and Poole (1997) is often introduced at the same time as other personnel practices as part of a series of measures to increase worker input (quantitative and qualitative) to the production process. The benefits of performance-linked remuneration are beneficial for employees and the organization itself: Performance-linked remuneration is not related to achieving good results but related to the performance of individuals performing tasks in the workplace and the results at the workplace If it is bad, it may cost the organization.

Performance-linked remuneration is a payment system that links wages and salaries to employee performance. It includes bonuses and performance fees. Performance-linked remuneration is also called variable remuneration. As mentioned above, the variable compensation plans are customized in this order, and the actual results of the employees represent their income. It does not depend on his / her name in the organization. These programs are designed to motivate individuals and groups that effectively contribute to distinguish between performers and non-performers.

Management of performance-linked remuneration may be the most difficult task that the human resources department must address (Wright, Hay Management Consultants). According to Swabe (1989), performance-related remuneration (PRP) is defined as "a system in which personal wage growth depends entirely or largely on its evaluation or performance evaluation". The increase in the use of the performance-linked remuneration system is undoubtedly due to the emergence of fairness. Unlike other compensation systems, regardless of their contribution, equal compensation for everyone of the same grade, PRP seems to be consistent with widely supported concept of distribution justice.