n Journal of Emerging Trends in Economics and Management Sciences - Is pay for performance the best incentive for employees?

Volume 4, Issue 6
  • ISSN : 2141-7024
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One of the most concerning issues in today's organizations is to enhance the performance of workers at their workplace. Because of technological advancements, it is a must to know about how to encourage the employees to contribute to the firm according to their maximum capabilities and skills and to increase quality based output of products and/or services. This research is important because of the prevailing pay structures of salaries in various private and public sector organizations. The author has made efforts to highlight the benefits and demerits of pay for performance as incentive to employees. The potential impact of this work is that it provides an opportunity to the experts of Human Resources Managers as well as to public and private sector organizations to adopt fair appraisal systems for rewarding their employees based on their performance at work. The research focuses on Merit Pay which is an incentive received on the basis of performance of an employee. In the modern of world of today, where money is the most sought after material, workers may be initiated and motivated to improve their work performance if they expect an extra monetary reward for the same. When salary is attached to merit, every employee in the organization will focus on the improved quality and efficiency of work done. Many researchers favor this system but it needs fair appraisal system in an organization. This research will be instrumental in ensuring that performance based reward system will be used for improving the productivity of employees.

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