Individual Performance Related Pay: A Critical Evaluation

This essay critically evaluates the concept of Individual Performance Related Pay (IPRP) and its impact on employee motivation and performance in organizations. It discusses the positive and negative aspects of IPRP, including its ability to increase productivity and motivation, as well as potential drawbacks such as short-term effects and individual differences. The essay also highlights the role of HR in implementing IPRP policies and creating a fair and inclusive work environment. The subject is BUS 3007 HR.

BUS 3007 HR

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Critically evaluation of the individual performance related pay to the extent under which it
leads to increase the performance level of the employees:.........................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
IPRP refers to the individual performance-related pay. This concept is the way of managing the
payroll in the organization by linking the salary of the individual or employees to their
performance. These standards have been set in order to increase the motivational aspects in the
employees. The salary is one of the vital element that drives the employees in the organization.
Changing in this aspect can motivate and demotivate the employees. The IPRP is the best way to
reward the employees with the financial reward. This leads to increase the productivity of the
employees in the organization. This essay will illustrate the concept of IPRP in organization. The
HR department in the organization is accountable for processing the payroll of the employees.
The HR department takes certain steps in order to increase the motivational element in
employees in context of IPRP. Along with this, the essay also describes the positive and negative
aspects of the IPRP in employees performance in the organizations.
MAIN BODY
Critically evaluation of the individual performance related pay to the extent under which it leads
to increase the performance level of the employees:
Individual performance related pay is usually introduced in order to measure the performance of
the individual in the organization. The concept of IPRP is just not limited to measuring the
performance of the employees it is a bigger concept that also involves increasing the productivity
of the individual in the organization. Earlier, the PRP was not linked up to the performance of
the employees in the organization. This concept has been recently introduced in the business
organizations. And the process of IPRP has proven efficient enough in adding glory to the
productivity of the employees in the organization. And this further result in increasing the over
all performance of the organization. (Shorin, 2017). The Human resource management team in
the organization is accountable for looking upon this process. This is not an easy task as the
needs of all the employees are needed to taken in account in order to increase their motivational
aspect. In an organization there are large number of employees are working and all of them have
different set of thinking and it is hard to understand each set of thinking in the employees.
Therefore, the human resource manager implements some policies in the organization that
impacts the employees in positive manner. IPRP is one of the policy from all the policy.

Understanding the circumstances in which IPRP tends to motivate the employees and leads
to increase in their performance:
The IPRP encourages the high level of performance by increasing the pay ration to the
employees. This process is just not limited to increasing the salary of the employees. The payroll
that has been increased under this is due to the effective performance of the employees. Inn an
organization when an individual works with hard work and gives their best efforts then the
process of IPRP has been considered as the best method to give the reward to the employees. The
salary is the important aspect in the life of the employees. Giving reward in terms of increasing
the salary leads to provide the satisfaction to the employees. And this enforces them to perform
better in desire of getting more financial reward. (Kaunitz and Egebark, 2017). This is the human
tendency that is present in all the humans. That they do desire more of the things that has been
achieved by them. The same thing goes with the employees working in the organization, when
they get one time reward then this leads to increase the desire of getting more financial rewards.
And for this they perform in more effective way. As a result, the productivity of the employees
increases along with increasing the productivity of the organization.
The -process of IPRP motivates the other employees as well to perform in effective
manner. When, the reward has been given to the individual in the organization then this creates
the desire of getting financial rewards in all employees. This works as a motivational element in
the organization. This leads to create the organizational culture that is embedded with the high
performance. The desire and wish of increasing the salary creates the inner motivation in the
employees and the employees works hard in order to provide the good result and for getting the
PRP. (Rusly and et.al., 2019). This results in shaping the individual performance in the
organization and when the performance of the individual in increases then it leads to adding in
the over all performance of the organization. The another benefit of this concept is that it ensures
the notion of equity & fairness in the organization. Under this process those employees has been
rewarded by the HR department who are capable in real. The payroll of the employees is
increased on the basis of their performance. All the hard work that has been done by them has
given the values and morals. This ensures the fair working in the organization and this further
ensures the effective environment in the company. Such environment always results in boosting
the employees to high level.

The employees feel motivated and feels the sense of belongingness in the organization
and this leads to attracting their trust and faith in the favour of the organization. The employees
give their full contribution in each task of the organization and this result in achieving the main
objectives of the company. PRP also creates the environment of accepting the challenges and
adopting the improvement. (Lutfullaeva, 2021). The IPRP has considered the tangible reward
that has been given to the employees in the terms of increasing their salary. This is that rewards
which creates the intangible aspect in the employees and that is motivation, confidence and
values. These aspects in the employees prepares them to accept the challenges and enforce them
to improve their performance in order to get the financial reward. The process of IPRP shapes
the character of the employees by providing them capability of accepting challenges. This results
in the improvement of the employee performance.
Negative circumstances of the IPRP:
IPRP might increase the productivity of the employee but it remains only for the short term
period. It does not remain in static manner. For an example if the organization give a good
amount of bonus to their employee along with the instant handful leave. As offering high pay is
only stated as a rapid fix but what if the employee source for the another job who offer them
much better expense. Nowadays it is more common that if the employee does not feel safe, or
feel pressured they immediately switch their job (Stogiannidis, 2019). As for some organization
if they do not implement a good leadership in work place it definitely affects the productivity of
the employee.
Human resource of any organization are tends to provide better training activities to the
employee, or to provide them a better environment so that it will enhance their efficiency in
handling the work. The things which impact on the motivation of the employee are as follows:
 If the goal set for the employee are too hard then it drives demotivation in them to
achieve the goals.
 Impact of IPRP on the employee motivation can be if the company do not provide the
sufficient bonus pay to their employee for their good work, then it also affect the work
efficiency of the employee.

 Some organization only provides the training for enhancing the productivity of the
employee, in short they only focus on the professional development of the employee they
do not care about the personal aspect of employee which tends the staff to feel pressured.
 If the leader of the organization do not provide positive feedback or appreciation over the
employee performance, this factor will discourage their work stamina.
 It is important to provide the better work culture if the pay process for the employees are
not equal then it affects their productivity. It is always seemed in some organization that
the payroll system is made on the basis of gender, as women are less paid as compared to
men. This is the major issue which affect the work culture that demotivate the employee
and distract them from their work.
 Organisational culture is too competitive in nature then it directly impact as to lower the
morale of the employees (Grasser, Newman and Xiong, 2021).
It is the duty of the HR team to ensure that employee is safe and motivated under the
company's work culture, if not then employee also focus on developing their growth they always
aim to come for their benefit and do not care about the company's goals and objectives.
Therefore, it affects the productivity of business, for that it is important to provide fair treatment
to all employee or to provide them better training sessions so that they think about the company's
goals.
Type of occupation:
As for the employee perception it is important for them to find a relevant profession for
them which satisfy their needs to live happily in their life. But what if they are working with the
company who only focuses on their work and always impose the work pressure over the
employee it discourage them to work for the company for longer. It is seen in some organization
as HR team only provide the description about their work but do not provide the development
training to their employees which directly impact the work productivity of the employee.
Standard income value of the country:
Every country has their different set data for average income for the employee which
organisation of the country must need to follow. But what if the Company are only limited to the

average income criteria and do not proceed to increase it. In such employee fell discourage and
also think as they are cheated if the company are not paying them good amount for their hard
work then why would they work for them. In such situation employee also look forward to
change their occupation if their company do not consider their work efforts (Ahmad, Bae, 2021).
Individual differences:
It is the major issue can be seen in IPRP which the organization need to consider, as if the
employee are not communicating to each other, it will ultimately impact their performance. For
an example if the employee having an issue and due to the lack of communication they do not
ask for the help to other employee. In such situation employee feel burden over them which
impact their performance. Therefore it is important for the leader of the organisation to
implement the supportive culture in the work place so that employee feel motivated and carry out
their task effectively. In some organisation it is seen that due to the lack of cultural awareness
create a negative environment which reflect in the work productivity of the employee. Also if the
employee is not compensated well accordingly to their work it will make decrease their morale.
It is the major responsibility of the Human resource team to provide the better and inclusive
environment to the employee, or to also focus on the personal growth of the employee so that
they will feel motivated towards their work and carry out the task effectively (Reilly and Brown,
2021).
Therefore, these are the challenges which can impact the motivation of employee and
resist them to work longer for the organization. The following IPRM consequences can impact
the work performance of the employee.
CONCLUSION
From the above report it is concluded that it is the foremost important for the organisation
to focus on the employee motivation. As this essay provides the information related to the IPRP
which is the best aspect to provide the reward to the employee for their better work performance.
This report illustrated about the IPRP related issues and benefits which involves the factors
which provide the benefit in employee motivation. It also describe as the other circumstances
which tends to demotivate the employee, and affect their productivity, which involves the
occupation type, individual differences factor which negatively impact on employee motivation

process.

REFERENCES
Books and Journals
Ahmad, M.H., Advantages and drawbacks of an increase in the number of employers adopting
flexible working practices.
Bae, K.B., 2021. The differing effects of individual-and group-based pay for performance on
employee satisfaction: the role of the perceived fairness of performance evaluations. Public
Management Review, pp.1-19.
Grasser, R., Newman, A.H. and Xiong, G., 2021. Does pay transparency help or hurt? Evidence
on employee motivation. Evidence on employee motivation (March 11, 2021).
Kaunitz, N. and Egebark, J., 2017. The Impact of Payroll Taxes on Firm Performance.
Lutfullaeva, N., 2021. Critical Evaluation of the Individual Performance Related Pay
(IPRP). SCIENTISTs, p.79.
Reilly, P. and Brown, D., 2021. How Fair Is Equal Pay? The Need for a More Balanced
Perspective. In Debating Equal Pay for All (pp. 149-165). Palgrave Macmillan, Cham.
Rusly and et.al., 2019. Global perspective on payroll system patent and research: A bibliometric
performance. International Journal of Recent Technology and Engineering. 8(2S2).
pp.148-157.
Shorin, G., 2017. Team Payroll Versus Performance in Professional Sports: Is Increased
Spending Associated with Greater Success?. Dukespace. lib. duke. Edu.
Stogiannidis, M., 2019. Value-based executive remuneration systems: A discussion about the
design possibilities of value-based remuneration systems, legal framework conditions and
settings from the field of value-based management. Proceedings of The 14th IAC 2019,
p.231.