The Principles of Pay Performance

The principles of pay performance do not hold in a normal work environment because the performance of most organizations depends squarely on teamwork. For this matter, the overall performance of an organization is equated to the aggregate of the individual performances within the organization. Considering that it will not be possible to determine the individual performance in this case, the company is under an obligation to pay employees based on the performance of their respective departments despite the fact that individual output vary from one employee to another within the same department. This type of generalization which is deeply embedded in the collective success, hinder some employees from reaching their full potentials since some of them rely on the work of others for a better pay which they do not deserve. The reverse is also true, the excellent work of some hardworking employees are not adequately rewarded because of the few underperformers in their respective teams.

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Considering that it is not always possible to assess individual performance-though it might work well- because all evaluations of individual performances are subjective. In some cases where individuals do not contribute in direct production of measurable outputs and their performance depends upon the work of others (or worse still team work), Behn is categorical that it would then not make it possible to determine their actual performance necessary for the rightful compensation.  Other aspects of performance such as quality of the product e.g. density of steel rod cannot be readily established. Nevertheless, in these abstract elements of performance are neglected and not factored in on the final pay, the productivity levels of the company will be compromised to a larger scale.

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Despite all the successes of systems of pay for performance in the motivation of employees towards increasing their productivity, they normally have intended and unintended consequences. It is common phenomenon in many companies that employee focus much of their time and energy on particular tasks that are emphasized that have direct impact on the pay they receive at the end of it all. At the same time, the same employees often pay less attention to those tasks that are equally important but do not count directly towards the final pay. This poses a serious weakness of the pay system as illustrated by Behn.

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Based on the empirical evidence given by Robert Behn in his journal, Performance, People and Pay, it is most apparent that the system of paying for performance is actually detrimental to the overall performance of an organization. The system put a lot of weight on the quantitative measurable aspects of production but grossly neglects the qualitative parameters which are equally useful in the accurate determination of pay an individual employee is rightfully entitled to get. The pay for performance affects the motivation of individual employees.

In its current form, pay for performance demoralizes employees given that employees are rewarded depending on their corporate performance rather than at individual level. The spirits of high performers often get duped by the underperforming counterparts. As a result, the performance (productivity and efficiency) of the company remains at lower levels due to the major weakness of the pay system and a motivational tool.

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