This report discusses the role of strategic human resource management in improving employee performance and productivity. It focuses on the impact of individual performance related pay (IPRP) on employee motivation and performance. The report critically evaluates the extent to which IPRP can stimulate higher levels of performance from employees and explores the circumstances in which it tends to motivate employees and when it may not work well. The case study of Debenhams, a British multinational retailer, is used to illustrate these concepts.