Why Pay for Performance Only Works in Theory

Why can paying only for performance only play a theoretical reason Why in this short sentence is the reason why the introduction of "Personal performance compensation helps improve corporate (financial) performance" is not effective for me explain. Before we contemplate the statement, there will be two questions to be discussed as an introduction to "What is Performance Payment?" And, "Why performance pay is regarded as a system that can contribute to the company's performance?" What is performance fee?

The basic theoretical foundation of performance-linked remuneration is the motivation theory. Content theory such as Maslow (1943, 1987) and Herzberg (1959) content theory attracts attention as one of many sources of human needs. Motivation can be enhanced by meeting this need, but the relative importance of compensation as incentive varies from individual to individual. More concrete performance-related fees are fair process theory (Adams, 1965) and expectation theory (Porter and Lawler, 1958; Lawler, 1973; Vroom, 1964) and understand these theories It helps. This forms the basis of the next part of the literature review, which focuses on the motivation of employees.

Payment performance is certainly an important factor for motivation ... for organizations as well as for individuals. It is widely believed that UNFAIR caused low morale and negative feelings against poor remuneration (like the home depot scenario), as they observed in a conversation with some employees in the store. Visible performance is most obvious in the sports world - individual or team sports. If we think that Sprinter's star performance is completely attributed to him or her, we will be very wrong. Strength coaches, technical coaches, nutrition coaches etc. all contribute to athlete performance. The same applies to team sports - Steve Nash or Michael Jordan went well when other members of the team and the coach contributed to their efforts

According to the theory of Porter-Lawler, work satisfaction does not lead to improved performance, but the work outcome (production and sales increase) leads to job satisfaction. The theory argues that the effort to fulfill the work is influenced not only by the results of performance and compensation, but also by the ability to carry out work and understand the work. If one feels that he can complete the task, he expects to receive a reward (inside or outside). Comparing the expected reward with the actual reward, if he is satisfied with the reward, his satisfaction will improve and he will have better performance in the future, but he is satisfied with the reward Otherwise, his satisfaction will decline. In return for the future will be reduced and the motivation for future performance improvement will be reduced.