PRP does not work
Role of reward
"Reward is an exciting area of HRM that is changing rapidly."(Redman T., et al, p.126) In terms of business management, reward plays a major factor. (Becker. G et al, 1998) There are five types of reward systems: time rate based, performance related pay, total reward, pay and share ownership, and flexible reward system.
IPRP definition
There are mainly two different forms of PRP. One form is fixed basic salary plus performance bonus. For instance, call center or factory work. The payment is determined by salary grade, experience, and work performance. Another is totally Performance-related rewards such as salesmen. Since it only can be used to limit areas, such as sports management, the details will focus on IPRP in the following.
Individual performance related pay is defined by ACAS as: “a method of payment where an individual employee receives increases in pay based wholly or partly on the regular and systematic assessment of job performance” (ACAS 1990, p.2). And it has been much supporter by governments as a means of promoting labour market flexibility and generating higher productivity. Compared with other ways of payment and reward, Individual Performance Related Pay (IPRP) is increasingly widely used. Alicson and Jeff mentioned that, “performance-related means of promoting labour market flexibility and generating higher productivity.” (Alicson and Jeff, 1997) It has been widely adopted in UK, USA and Australia. It is an individualized pay system measuring the payment and reward through the assessment of job performance. And the performance is measured against specific targets.
advantage/Benefits
Performance-related pay may have the following benefits for employer or workers. Firstly, paying according to the performance is a way to encourage employers to improve their productivity and thus improve the performance of the corporation. Secondly, good performing workers can easily gain more benefits in PRP system, which may let them
"Reward is an exciting area of HRM that is changing rapidly."(Redman T., et al, p.126) In terms of business management, reward plays a major factor. (Becker. G et al, 1998) There are five types of reward systems: time rate based, performance related pay, total reward, pay and share ownership, and flexible reward system.
IPRP definition
There are mainly two different forms of PRP. One form is fixed basic salary plus performance bonus. For instance, call center or factory work. The payment is determined by salary grade, experience, and work performance. Another is totally Performance-related rewards such as salesmen. Since it only can be used to limit areas, such as sports management, the details will focus on IPRP in the following.
Individual performance related pay is defined by ACAS as: “a method of payment where an individual employee receives increases in pay based wholly or partly on the regular and systematic assessment of job performance” (ACAS 1990, p.2). And it has been much supporter by governments as a means of promoting labour market flexibility and generating higher productivity. Compared with other ways of payment and reward, Individual Performance Related Pay (IPRP) is increasingly widely used. Alicson and Jeff mentioned that, “performance-related means of promoting labour market flexibility and generating higher productivity.” (Alicson and Jeff, 1997) It has been widely adopted in UK, USA and Australia. It is an individualized pay system measuring the payment and reward through the assessment of job performance. And the performance is measured against specific targets.
advantage/Benefits
Performance-related pay may have the following benefits for employer or workers. Firstly, paying according to the performance is a way to encourage employers to improve their productivity and thus improve the performance of the corporation. Secondly, good performing workers can easily gain more benefits in PRP system, which may let them