increase in revenues stock value cash flows and profits whereas soft dollars

Increase in revenues stock value cash flows and

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increase in revenues, stock value, cash flows and profits whereas soft dollars include turnover rate, employee motivation and productivity. Therefore, if a P4P plan increases productivity, employee motivation and profits then it is effective. Moreover, a successful pay program should have clear, promote equity and transparency and measure key results and competencies. Another way to see if the pay-for-performance plan is effective is to look at its simplicity and also see if it allows team members to be involved in establishing the metrics. Even though the performance-related pay is a means of determining employee pay raises and promotions it also offers some challenges to employees. Given the difficulty in measuring employee’s performance, PRP causes feelings of inequity at the place of work. Another disadvantage of a pay-for-performance plan is that it can hinder employees from moving up quicker in leadership positions or getting regular pay rises. P4P also offers disadvantages from an employer’s viewpoint in the sense that organizations invest a lot of energy and time in coming up with an effective, it hinders team-spirit and cooperation, reduces staff motivation and causes deterioration in the quality of the goods or services offered by employees. It is therefore important for managers to follow strictly the rules given by the performance-related plan to benefit from it.
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PAY-FOR-PERFORMANCE PLANS 10 References Gillam, S. J., Siriwardena, A. N., & Steel, N. (2012). Pay-for-performance in the United Kingdom: impact of the quality and outcomes framework—a systematic review. The Annals of Family Medicine , 10 (5), 461-468. Hays, S. (1999). Pros & Cons of Pay for Performance. Workforce (10928332), 78(2), 68. Lavy, V. (2007). Using performance-based pay to improve the quality of teachers. The future of children , 87-109. McDonald, R., & Roland, M. (2009). Pay for performance in primary care in England and California: comparison of unintended consequences. The Annals of Family Medicine , 7 (2), 121-127. Solmon, L. C., & Podgursky, M. (2000). The Pros and Cons of Performance-Based Compensation. Weibel, A., Rost, K., & Osterloh, M. (2010). Pay for Performance in the Public Sector— Benefits and (Hidden) Costs. Journal of Public Administration Research & Theory , 20(2), 387-412. doi:10.1093/jopart/mup009
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