Impact of Individual Performance Related Pay on Workforce Performance

STRATEGIC HUMAN
RESOURCE MANAGMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Individual Performance Related Pay Impact on Performance of Workforce..................................3
Rewards and Awards in Terms of Money...................................................................................3
Individual Incentive Plans:..........................................................................................................4
Merit Pay Plans............................................................................................................................4
Circumstances of IPRP tends for motivation: -...............................................................................5
IPRP tends to motivate employee: -................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Individual performance related pay refer to a system in which organization provide wages
according to quality, efficiency and productivity of employees. Essay highlight importance of
performance related pay in the organization and way in which this can be processed. It also
describes IPRP impact on performance of workforce in the organization. IPRP depends on
various factors such as type of occupation, standard of income and values in a country and
individual differences. There are numbers of benefits of Individual performance related pay as
motivate employees in various circumstance to remain motivate and hence increase output of the
organization. However, this factor cannot work well in some situation as described in the essay.
MAIN BODY
Individual Performance Related Pay Impact on Performance of Workforce
Performance related pay motivate employees for achieving for higher goals for example
if employee pay extra by the organization for good performance then it motivate him to continue
do so and encourage others too. There are many ways in which IPRP perform in the organization
such as Rewards and awards in terms of money, Individual Incentive Plans, Merit Pay Plans, and
Group Incentive plans.
Rewards and Awards in Terms of Money
Employee’s yearly, monthly, quarterly and half yearly performance recorded by Human
Resource Department in the organization. This performance depends on various parameters such
as quality of work, quantity and efficiency and according to data is analyse by HR (Bano, 2018).
This recorded data is compare with different workers and an average work performance is set
and above that performance of employee is include in separate list. This list is letter send to
seniors for awards, rewards and recognition. There are multiple tools, from which this
performance is tally such as KPI, 360 Degree feedback etc and hence this enables HRM to select
deserving candidate. According awards and rewards in terms of money distributed by seniors to
employees. It impact on personal growth of the employees and hence increases their financial
capacity of the employee. Build a strong relationship between employee and organization as they
are rightly appraised and decrease chances of migration of skilled and talented workforce from
the organization. It also increases loyalty, efficiency, quality and productivity of the employees.
It also impact on performance of other employees as it encourage them to work harder to get
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