A Consideration of the Perspectives of the Employer and Employee

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Pay for Performance Compensation System
Introduction
Pay for performance system of compensating employees is a formal approach of incentivizing the members of a workforce based on the output realized. According to Hellgren, Eriksson, and Sverke (5), the pay for performance (henceforth PFP) approach of incentivizing employees is highly effective in instances where the underlying objective is to measure the desired performances either qualitatively or quantitatively. On the other hand, Shields et al (3) reveal that application of PFP through the adoption of a result based approach in organizational settings increases the ability of stakeholders to attain strong motivational effects. Kuvaas, Buch and Dysvik (9) explain that money is one of the most effective incentives in fostering the attainment of instrumental value in organizational settings. As a consequence, the main explanation of the positive relationship that exists between positive performance and the adoption of PFP as a method of capitation is the conventionally perceived strong relationship between pay and performance. Rouziès, Onyemah, and Iacobucci (198) demystify that the effort of a worker is increased in instances where performance is directly related to the capitation approach embraced by an organization. Theories of motivation such as the expectancy model posit that reinforcements need to be extrinsic in nature based on the fact that employees get the zeal of performing their tasks if there is a positive consequence in the form of a reward tied to such acts. Therefore, the current study seeks to undertake a critical analysis of pay for performance (PFP) as a fair and equitable system of rewarding employees.
A Consideration of the Perspectives of the Employer and Employee
Effective attainment of Organizational Behavior Modification (OBM) in institutional settings calls for a proper application of the ideologies of human resource management. According to Kuvaas, Buch and Dysvik (10), the motivation theory contends that the behavior depicted by an individual leads to the emergence of consequences that may take the form of punishments or reinforcements. On the other hand, Hellgren, Eriksson, and Sverke (6) explain that employers adopt feedback and incentives as the most effective ways of reinforcing their employees. However, the OBM theory reveals that the reward systems put in place by an institution only reinforce the behavior under consideration in instances where they impose an increase in the possibilities of occurrence of the desired traits. As a consequence, employers consider pay as one of the most effective ways of instilling motivation on their workers; an aspect that instills direct linkage between pay and the performance of the sought after organizational behaviors.
Rouziès, Onyemah, and Iacobucci (199) explain that an organization must embrace a performance appraisal system that depicts the attributes of comprehensiveness, effective communication and standardization before initiating the systems aimed at fostering linkages between performance and pay. On the other hand Shields et al (3) advice on the need for institutional managers to adopt proper measures of ensuring ...