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Pay-for-Performance - Coggle Diagram
Pay-for-Performance
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Definition
It refers to a financial incentive to motivate employees, with a payment structure that builds on their base pay, when they meet or exceed measurable performance metrics.
Models
Merit-based pay: salaried/houred pay structure which high performance can consistently earn merit increases
Performance-based pay - a bonus on top of employees' base pay for meeting/exceeding set performance goals
Variable pay - a bonus on top of base pay but paid in a less predictive manner
e.g., discretionary bonuses for present performances & non-discretionary bonuses based on long and short-term goals
Incentive-based pay - receives rewards for hitting specific performance goals (does not have to be monetary)
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Types of Incentives
Examples
Bonuses - regular reward monetary incentives to show appreciation, included in employees' pay checks (rewarded during important event as a retention incentive)
Public recognition- non-monetary incentive that motivates employees to keep up their good work and encourages their peers to work harder
Definition
To encourage performance and productivity, awarded to those who have met/exceeded the standards of an ideal performance (financial & non-financial)
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