What is the performance -based compensation?

performance -based compensation is the type of compensation or payment made to employees within the company based on their performance and achieve specific goals. This type of compensation can be used for employees at any level, from newly hired employees to established management and can be more reliable than other systems of compensation for inspiration for hard work of employees. Remuneration for results and efforts, rather than by simply allocating a payment based on seniority or time, employees are recommended to achieve the results and benefit companies. Power -based compensation can be used in almost any kind of business, from retail stores to legal companies, and it has been shown to be successful in many environments. Some companies use a model that rewards employees only for loyalty to the company and provides Compensation in the form of a yearly salary increase. Although it can help ensure employee loyalty, it can also discourage employees to exceed the obligation because not to teachIni real reward. This type of compensation can also create a working environment in which someone who has worked in the company for a relatively long time earns much more than someone else who does the same job that he simply did not work in the company.

A new employee who can do the same job as someone who has been doing it for 10 years can therefore become more valuable for the company. On the other hand, the compensation based strategy provides financial rewards to those who meet sales objectives or otherwise meet the real goals for the company. The value of employees in this type of business is determined by work and success rather than merely through seniority. Using a Compe based on performance, employees are invited to try hard and meet the goals to gain not only praise but also real compensation.

Another advantage of strategy of compensation based on work on workThe oviště is that it can be applied to almost any type of business. For example, in a law firm, bonuses can be paid to employees or partners who acquire new clients and who can show that their total billing hours were higher than other partners. In a retail store, similar bonuses or salary increases could be awarded to dealers who regularly achieved sales goals and demonstrate the actual improvement of performance. This type of system may be quite simple and by setting specific goals, the compensation based on performance can ignore concern about subjective managerial views or potential conflicts of employees.