History, Relevance in Todays Market Essay Example | Topics and Well Written Essays - 750 words

History, Relevance in Todays Market - Essay ExampleIn this regard the most famous and widely used method is of proceeding Related Pay (Brown & Armstrong, 1999). In order to better understand the concept of Performance Related Pay, it will be beneficial to first comprehend the meat of the performance. Performance means the output or end result given by any party or person. In the reference to the performance of the employees, it is perceive to be the fulfilment of the task or job responsibility which is measured on the basis of standards set for different factors like accuracy, time, cost etc. murder RELATED PAY Performance Related Pay (PRP) is the method used by the organisations in order to directly relate the kick in or pay off with the performance of the employees. It is strongly believed that the increased or additional pay increase the motivation level of the employees and they strive to give high performance. In this method several(prenominal) bonuses and pay levels be d irectly linked with the appraisal or assessment of the performance of the employees in comparison to the objectives and standards. ... It can be further divided into true piecework and differential piecework. 2. Merit pay it is further divided into fixed incremental scales, merit bars, percentage increases, merit bonuses, and cafeteria benefits. 3. Profit Sharing profits sharing or sharing incentives plans are provided to very limited and loyal employees of the organisation in order to retain them and motivate them to give high performance. In this system the employees are awarded with some shares of the organisation in response to their outstanding performance and output. 4. Commission in this system the employees are provided with a certain percentage of commission in relation with the amount of work done or sales made. Usually commission is used to increase the motivation level and performance of the sales team. relevance OF PERFORMANCE RELATED PAY IN TODAYS MARKET It is import ant for the organisations to include and consider the prevalent economic condition in the process of designing the pay system or scheme. Most of the analysts are of the ken that the concept of the Performance Related Pay is no more effective and relevant for the organisations in view of the recent economic downturn and crisis. On the other hand, according to another school of thought organisations have become more concerned about the general cost and setup of the pay structure and compensation. In order to justify the cost of the pay and compensation structure, organisations are striving to linking this cost with the benefits derived. As a result, these organisations are widely using the method of Performance Related Pay (Brown & Armstrong, 1999). Apart from the economic crisis, increasing globalisation and free trade across the economies of the introduction have