Pay for performance (human resources)
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It has been suggested that this article or section be merged into Performance-related pay. (Discuss) Proposed since February 2010. |
Pay for performance, sometimes abbreviated "P4P", is a motivation concept in human resources, in which employees receive increased compensation for their work if their team, department or company reaches certain targets. As of 2005[update], 75 percent of all U.S. companies connect at least part of an employee's pay to measures of performance.
Research shows that pay for performance increases performance when the task at hand is more repetitive, and reduces performance when the task at hand requires more creative thinking.[1]
Research also shows that there is very little correlation between performance pay of CEO's and the success of the companies they manage. [2]
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Harvard Business School Working Knowledge: Pay-for-Performance Doesn’t Always Pay Off (Retrieved 2007-03-19)
