Performance-related pay is a financial reward to employees whose work is considered to have reached a required standard, and/or above average.
Performance related pay is generally used where employee performance cannot be appropriately measured in terms of output produced or sales achieved.
Whilst the detail of real performance-related schemes varies from business to business, there are several common features:
Performance-related pay has grown widely in recent years – particularly in the public sector. This is part of a movement towards rewarding individual performance which reflects individual circumstances.
There are several problems with performance-related pay:
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