Furthermore P4P creates contention among employees Since the process it relies

Furthermore p4p creates contention among employees

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Furthermore, P4P creates contention among employees. Since the process it relies much on the quality of the judgment made by a manager, an employee might sometimes as though the manager is showing favoritism to certain workers to help them get incentives and pay rises (Solmon & Podgursky, 2000). In such a case, a worker who is not getting higher pay rises and other incentives might show jealousy towards fellow workmates thus creating a hostile work environment which in the long run reduces employee productivity. Merit pay is one of the best ways an employer can use to reward employees that he or she wants to keep. This confirms that the employer values his employees. However, despite offering these benefits to the employer, performance-related pay also has its limitations. According to Hays (1999), an employer cannot 100 percent differentiate the performance of different employees to determine who is performing better than who to deserve the merit pay. The reason for this is that some of the most desirable contributions are difficult to measure. In this case, the supervisor’s opinion remains constant that organizations use to decide who to get a pay rise. Therefore by using items that are easy to quantify, the employer might not be considering the most desirable aspects of an employee’s job. Solmon & Podgursky (2000), also affirms that unless the performance standards of the program are entirely objective, it becomes difficult for the manager to measure the performance of employees. It is because of these reasons that employees often complain that pay raises are based on office politics and how well the manager likes a particular employee and not applied consistently. For a pay-for-performance to be effective, it must be prepared beforehand. The preparation process takes a lot of time and money. For instance, the employer and the
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PAY-FOR-PERFORMANCE PLANS 7 employees must first agree on the criteria of assessment, which in most cases is time- consuming. Organizations invest a lot of energy and time in coming up with an effective pay- for-performance since the process involves the development of baselines, measurements, and competencies (Weibel et al., 2010). The time spent on the development of this program could be invested in other areas of the business for instance in delivering quality services to the customers (Gillam et al., 2012). In this sense, spending a lot of time to generate documents hundreds of pages that define what merit means is not a good use of company time. For these reasons, implementing a pay-for-performance in an organization is inconvenient from an employer’s perspective. With the implementation of performance-related pay (PRP), team spirit and co- operation can be hindered. Workers tend to be more individualistic and are less willing to work in teams with the presence of a PRP plan in place (Gillam et al., 2012). For instance, an employee might be hesitant to offer assistance to a co-worker who is struggling to complete a task because of the view that the individual might outperform them. Similarly, an employee
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