factors that can reduce the effect of performance related pay?

Question

hey..can anyone tell me some possible factors that can reduce the effect of performance related pay from being a good thing?

Answer 1

Unacheiveable targets for one thing, if the pay is performance related according to targets and they are unreasonable, then the pay will be ineffective!

Answer 2

1. If the work in a sector was to dry up - this could happen in practically any sector - from sales through to admin. Even the hardest workers would suffer if there was no work to do.
2. Staff may find it more difficult to get mortgages, as often basic salaries will only be taken into consideration. Or at the very least it would dramatically reduce the number of possible lenders.
3. Certain staff members may get stressed and crack under the pressure of having to get so much done to earn a decent wage.

Answer 3

Performance related pay is obviously based upon paying people for what they produce.
The first thing to remember is that everyone is different and have different earning potential and requirements.
There needs to be a quantifiable and achievable minimum requirement and a quantifiable maximum possibility. So that someone can actually achieve an earning potential and what can humanly be achievable.
If performance related pay is not perceived as being achievable, then employees will not attempt to achieve it.
If a person is required to break the law, taboos, their morality or conscience to achieve the targets of the performance related pay, these will also reduce the performance eg... for practising Christians to work on Sundays or say trying to sell Beef to Hindus.
If performance related pay is linked to a team effort where it is perceived that a member of a team is not performing
If you have to kill yourself just to earn sufficient to pay for your transport to work... it has to be perceived as a beneficial to achieve
Where performance outweighs quality and sales potential

Answer 4

Personality clash between employee and their manager

Nepotism/favouritism

Long term absence - depending on the measures used, it could weigh against you. For example, you could perform fantastically for 9 months of the year, get injured in a car accident & be off for the remaining 3 months of the year, and because you're off for 3 months, you've hit the trigger for performance management for absence, and don't get the PRP element.

Answer 5

you might have poor performance due to lazyness or other peoples fault, if its in sales maybe interest in the product drops off?