Research Paper on "Controversial Pay Performance"

Research Paper 4 pages (1218 words) Sources: 4

[EXCERPT] . . . .

Although common knowledge shows that employees will always earn better in a pay-for-performance system, the reality of making it to earn the much is difficult. Arguably, employers will in attach little pay per unit of work in order to make them work more. Given a chance to determine their pay, employees will always put in extra effort to determine their pay. This reality can only happen if the employer is willing to allow them earn that way (Glewwe, Ilias & Kremer, 2004). Cost minimization from the employer will still be seen. Therefore, it will be a pipe dream for the employee to depend on this payment system to make satisfactory earnings. This payment system also has the disadvantage of bringing in the element of unhealthy competition in the company. Employees will strive to outdo each other in terms of earnings. They will therefore resort to unorthodox means of securing the extra work from the employer. Those who cannot play along will suffer adversely.

From an employer perspective

Employers can end up having less work done at some instances in a pay-for performance system. Since payment is pegged on performance, if an employee does not need a lot of money, he or she will simply refuse to work more. This will be hurting to the economy of the company. Employees' performance will vary according to their need for pay, a phenomenon that is not healthy for business.

Another disadvantage with the pay-for -- performance system is that it results in extra pay that would have been avoided if the payment mode were not this way. Employers will end up having to contend with very ambitious employees who can work extra hard to make supernormal earnings. The problem with this is that not all the times will the work done by the employees translate to earnings to the company. In the same vein, it can be difficult to align the many employees to specific tasks given that many of them will be looking for every opportunity to work. In this regard, there can result cases where the employees will be fighting for the slots and chances for the extra work, which might not be sufficient for all (Glewwe, Ilias & Kremer, 2004). In the quest to intervene in this problem, the exercise might end up raising eyebrows in the work place. Accusations of favoritism in the manner in which work is allocated will arise. There can be also being cases where some employees will bribe their way to have more work given to them. The whole reaction and alignment to work will result to imperfection in the manner in which work is allocated. The result of this will be a tainted reputation for the company and the employer. Good corporate practices advocates for no discrimination in the work place.

The employer will also face the challenge of having to contend with the difficulty that comes with measuring performance. Performance measurement is needed in order to have a pay determined. In the process of doing so, no known method can accurately measure the input of every employee to the overall work done. Nearly all the methods discussed above are subjective in nature and that they lead to bias. Employers will also need to outsource the services of experts or employ better technology in order to have work done measured accurately. All these efforts will lead to increased costs, which is against the profit-making motive of any business.

References

Glewwe, P., Ilias, N., & Kremer, M. (2004). Teacher incentives. Mimeograph.… READ MORE

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