To achieve consistency and efficiency, companies need to make use of all the available resources. As far as the human resources are concerned, the key factor is to maintain the motivation. Companies concentrate on many methods of maintaining the motivation of their employees. Paying extra amounts of money for the employees for their additional contributions is an act that is being practiced by most of the high performing companies. ‘Performance pay goes hand in hand with delegating human resources management’ (OECD.org 2005). Along with all the controversies and debates among the human resource managers this concept can be successful for those who will conduct it accordingly with required qualities.
First and foremost, it is important for the companies to improve the production to gain the expected profits. ‘The most important motivator of workers is salary and wages’ (Taylor 1911). Therefore they encourage the workers to increase the production level while maintaining the quality by paying them more for the extra hours they work or the extra units they produce. It is understandable that employees’ major expectation is a high salary. Therefore they work hard to earn the extra amount of money which will help the company to increase the productivity levels. Which means employers and employees both will mutually able to achieve their respective expectations.
On the other hand, ‘From the human resources perspective, they want to hire loyal employees because they can add more value to the organization of the duration of their stay’ (personal branding 2008). providing extra money will help to build the loyalty among the employees. It makes them realize that they are a part of the company. The authorities have to pass the message to the employees that the salary they get is not just a payment for their work but a certain portion of the company’s profit. They can make the salary structure accordingly where the employees will get an extra amount when the company is earning profits. This will motivate the employees to work hard and make sure the company achieves the short term and long term targets. More importantly, having loyal employees will be helpful to create a fraud free environment in the work place, which will be a humongous achievement by the company, considering the modern day situations. When the employees get a flat income rate, there are certain chances that some employees will be tempted to commit in certain fraud which will harm the company’s performance as well as the goodwill. Therefore, to prevent such activities companies should overlook those traditional payment methods and practice modern salary plans according to the business and the duty they are involved in. Moreover, it will help to decrease all the anti-authority activities which will harm the organizations such as picketing. Considering the modern reasons for such activities, it is important that for the employers to maintain a pleasant financial relationship with the employees to make sure the company does not fall for any unexpected troubles.
Furthermore, retaining the existing employees is very important to the companies as well as recruiting new talented employees. “It appears that PRP can also act as a recruitment incentive” (OECD.org 2005). But workers will always be searching for a job with a higher salary. If they lose these existing workers who are trained and used to their respective duties, company will have to have an extra cost on recruiting and training new employees. Still they might not be as effective as the experienced workers. When the existing employees get extra payments, they will not be seeking for the other job opportunities. This will help the companies to retain their experienced and loyal staff in order to maintain the efficiency as well as the productivity.
However, ‘Monitoring and measuring performance – especially the conduct of staff performance appraisals – is a difficult process’ (OECD.org 2005). Therefore, they have to make sure that the workers get paid accordingly to make sure the salary methods are relevant and similar to all the employees. If the authorities fail to evaluate the work by the workers or calculate the exact amounts, it will lead to miss understandings between the employees and employers. Therefore, the companies will have an extra cost on evaluating and calculating as well. Meanwhile, when the employees have extra amounts of cash in hand, they might get committed to the activities which will harm them as well as the company. Getting addicted to liquor can be spelt out as an example, which will eventually affect their duties by loosing focus and getting physical difficulties.
Considering all above, it is understandable that it is up to the authorities to identify the relevant payment methods and make sure the company gains benefits. At the same time, the companies should understand that performance payment method is not the only way to motivate the employees. Providing the needed facilities in the work place and keeping them without a stress is equally important to maintain the expected motivation level among the workers at the work place. It is understandable that despite the additional costs, providing extra money for the employees’ exceptional contributions is beneficial to the companies as long as the authorities maintain the qualities of salary methods and do it fairly where the amounts and percentages are equal to every worker in the work place. Motivation and the loyalty of the employees is the most important aspect for a company to achieve their respective goals.
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2. Oecd. (2005). Paying for Performance: Policies for Government Employees. Available: http://www.oecd.org/dataoecd/13/51/34910926.pdf. Last accessed 14th oct 2010.
3. taylor. (2010). How Managers can Motivate their Employees. Available: http://www.scitopics.com/How_Managers_can_Motivate_their_Employees.html. Last accessed 14th oct 2010.