Pay-for-performance (PFP) continues to be a topic of debate. In America’s public school and health care systems, PFP is controversial issue. In some cases, such as law enforcement and the military, there is a belief such a system would not work at all.
Although the process has made inroads in business and is a means to help determine promotions, pay, and retention, pay for performance has not been consistently well received despite the successes experienced.
You have been asked by the organization’s senior leadership to explore the practicality of implementing a pay for performance program for your organization (i.e., merit pay, variable pay, discretionary bonuses, and non-discretionary bonuses) or one you are interested in working with. Before providing your summary and recommendations, you will want to include the following points:
- A brief background of the organization and industry.
- Identify and discuss which, if not all, PFP plans you will be considering.
- How the organization measure the effectiveness of the plan.
- Employees’ perspective – advantages and disadvantages of PFP.
- Employer’s perspective – advantages and disadvantages of PFP
- Include any additional information that will support your position and recommendation; do not limit yourself to these points.