With companies increasingly using pay-for-performance (PFP) plans to drive competitive advantage a study of the US travel industry examined the relative effects of three commonly used PFP plans (merit pay, individual bonuses, and long term incentives) on employee performance and employee turnover. The findings of the study indicate that, in an environment where all three types of PFP plans are operating simultaneously, merit pay has a greater effect on both performance and turnover than bonuses and long term incentives.
Key Topics: Pay for performance; Merit pay; Bonus; Long term incentives; Turnover
In modern business, developing a rapidly changing and knowledgable workforce to meet business pressures is crucial for company success, and central to this employee development is workplace learning. A study of the Spanish wine industry examined the types of rewards linked to employee training in the workplace, and the how these rewards differed by job categories and job functions. The findings indicated that multiple types of reward are used by companies in incentivising training, with financial rewards being less common than non-financial rewards. The study also found that training related rewards did not differ based on job type.
Key Topics: Training; Rewards; Learning culture
One of the cornerstones of modern performance management is the concept of pay based on the achievement of goals, but the role of performance expectations is less well defined. A study examining the effect of performance expectations on the total compensation of professional US football coaches found that compensation increases when performance expectations are exceeded. While on-field as well as off’-field performance measures were found to affect total compensation of coaches.
Key Topics: Performance expectations; Coaching; Executive compensation
Salespeople are often painted as being only interested in making money. A study of US salespeople looked at the impact on employee performance of three organizational reward types frequently used by companies to motivate and engage employees, namely financial incentives, recognition, and feedback. Examining sales employees in the retail sector, the results indicated that all three reward types increased employee performance, and that financial incentives and recognition were substitutes, with feedback being independent of the other incentive types.
Key Topics: Monetary incentives; Feedback; Recognition; Sales performance
Performance-based incentive systems are becoming increasingly prevalent for academics in universities globally. A Korean study assessed the success of such a system over a nine-year period and found that increased financial rewards led to increases in both the quality and quantity of work by university academics.
Key Topics: Pay for performance; Incentives; Academics
Effectively managing new product development is critical to many businesses. A recent study examined the Spanish manufacturing sector for the combined effects of process based rewards and process controls on new product performance and job satisfaction. Results found that both process-based rewards and process controls can have either positive or negative effects depending on the performance considered. Process-based rewards were found to have a positive effect on adherence to budget, adherence to schedule, and team’s job satisfaction, while having a negative effect on new product quality.
Key Topics: New product development; Process-based rewards; Job satisfaction |
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