Individual Related Pay

London

London school of Business and Management

Strategic Human Resource Management

(HRM 3007)

Individual Performance Related Pay and its links to motivation

Pitshou Nkenge 16401494

Module tutor: Raja Khan

Submission: 28 January 2016

Introduction:

Successful business depends on strategies implemented by organisation to gain competitive advantages. Critical Success Factors depend on employees’ performances, commitment and mostly motivation toward organisation; those outcomes depend on rewards schemes implemented within organisation to keep employees satisfied. Human Resources Management has increased its interest in both public and private sectors regarding how to motivate employees and create reward scheme that will enable business and employees to perform in efficient and effective manner to enjoy blue ocean. Therefore, performance related pay is one of the methods by which employer can reward individual depends on employees’ performance. Performance Related Pay remunerates workers with monetary incentive, after carrying out job evaluation from overall performance and particular accomplishment related to goals. It was initially introduced in the United Kingdom within the 1980 and many businesses experienced more anticipation which PRP might create cultural alter and encourage more employees as well as organisational performance (Kessler and Purcell, 1992).

Recently PRP forms a vital element of numerous organisations’ reward methods; the most typical type associated with performance related pay is actually commission, piecework. Mostly in financial sectors (Brokers), sales person, manufacturing line employees and footballers might receive pay under this technique.

PRP reward system brings a lot discussion amongst HRM reward professionals, organisational psychologists as well as academics since early introduction whether PRP is an efficient motivational device. Some potential benefits that PRP tend to provide an immediate inspiration,...