Performance Management Systems and Strategies

BENEFITS OF PERFORMANCE-BASED COMPENSATION

From compensation management point of view, performance management systems help in achieving following critical goals:

• It helps in recognizing the efforts and contributions of employees objectively and thereby facilitates in effective job pricing, both through cost optimization and rewarding of talented performers.
• It facilitates in suitable compensation design, rewarding employees based on the performance linkage.
• It supports employee motivation (which leads to increased performance), helping employees to receive their performance feedback, understanding their strengths and weaknesses. Employees can develop themselves through self-introspection and thereby feel intrinsically motivated. So also performance-based ...