Importance of Individual Performance Related Pay in Enhancing Employee Performance

STRATEGIC HUMAN
RESOURCE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
INDIVIDUAL PERFORMANCE REALTED PAY (IPRP)...........................................................3
Extent to which IPRP enhances the Employees' Performance....................................................3
Circumstances in which IPRP works well and in which it does not, in order to enhance the
employees' motivation.................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Strategies are basically the concepts which goes beyond the traditional concepts in order
to gain a competitive advantage by setting particular direction. Strategic Human Resource
Management mainly focuses on developing and implementing the strategies keeping in mind the
fulfilment of needs of employees and the goals of the organization.
It mainly lays emphasis on all the aspects which affects the employees in any way whether it is
hiring and firing, benefits, training, payment etc. SHRM links the HRM with the strategies and
objectives in order to improve the organizational performance and productivity (Bano, 2018).
Many organizations have improved their HRM department and analyses the external business
obstacles to improve the employees' performance.
The essay underneath will evaluate the ways in which Individual Performance Related Pay
(IPRP) can be proved beneficial in stimulating higher level of performance from the employees.
It will also discuss the situations in which the IPRP helps in motivating the employees and the
circumstances in which it does not go well regarding the employees' performance.
INDIVIDUAL PERFORMANCE REALTED PAY (IPRP)
Extent to which IPRP enhances the Employees' Performance
IPRP is basically a system adapted by some organizations where the employees are paid
according to the quality of the work. It mainly benefits the employers as it becomes easy for
them to measure the employees' marginal product and pay according to the same. For
example, if the employees are given a task to sell 100 accessories and will be paid £50 for
completing the task, then it becomes easy for the employers to provide the payment as if they
have sold 50 accessories then they will be paid just half of the amount (Ogbonnaya, Daniels and
Nielsen, 2017).
IPRP mainly provides the financial rewards to the individual employees by assessing their
performance in completing the tasks such as reaching the targets, financial profit sharing,
targeted sales and many more. It is appreciable for some employees whereas the others don't
accept it. Some think that it can motivate the employees to achieve the organizational goals
believing that they will get financial incentives for reaching targets. Others may feel that this
system will create pressure among the employees making the management poor with a money-
driven organizational culture.