Organizations are increasingly devising performance linked compensation systems to induce employee’s performance and productivity which is essential for creating and sustaining competitive advantage. There is generally agreement on the need for rewards and recognition to form part of any effective performance management system. Employee’s knowledge...

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Approaches to Rewarding Performance: Performance management is a way to motivate the employees on both individual performance and on group performance. Performance management is increasingly becoming popular due to the realization of importance of keeping competent and dedicated personnel instead of to the realization of importance of keeping compe...

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Performance Appraisal system must be well-defined, corporately supported and monitored. It must be widely communicated and focused towards achieving corporate objectives. In essence, a performance appraisal system must be integrated achieving corporate objectives. In essence, performance appraisal system must be integrated as part of a performance ...

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What are the Sources of Performance Appraisal: Combination of group and Individual appraisal: Performance appraisal evaluates employees who frequently aspire to improve their performance rather than their service. To avoid this situation, teamwork is necessary. In some cases, individual appraisal is needed and in others, group appraisal is needed. ...

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Compensation is need for survival and human satisfaction. Pay dissatisfaction can lead to a number of individual and organization problems as discussed below: High Turnover: If employees are not paid according to the position they hold, their skills, competencies and performance, then employees will become dissatisfied with compensation and search ...

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Theories of Job Satisfaction: These theories are related to job satisfaction and then explore the linkage of compensation and employee satisfaction. Comparison Theory: This theory specifics that employees compare what their jobs should provide (e.g. promotions and compensation)to what they currently receive from their jobs.  However simple need com...

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Compensation has long been considered one of the most important organizational rewards because it allows employees to obtain other rewards. Compensation management entails a mechanism that connects employee efforts, performance and outcomes with organizational goals and objectives. Since a large number of employees work in the organization, therefo...

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The work itself is a major determinant of whether to pay for time or output. The work characteristics to consider include: Measurability of output. The relationship between effort and output. The degree of standardization. Requirements for quality as well as quantity. Competitive conditions, which make it imperative that unit labour costs be defini...

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Compensation Planning:The planning stages of compensation management are depicted by the following figure captioned as Compensation Planning: Compensation has long been considered one of the most important organizational rewards because it allows employees to obtain other rewards. Compensation management entails a mechanism that connects employee e...

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Heneman and Schwab (1979) defines pay system as follows: Pay system is the method the organization uses to determine pay raise for individuals which can be computed in terms of the amount of time the employee spends on the job(time-based systems) or his performance or efficiency (performance-based systems). Performance-based systems include individ...

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