In order to do it properly, results of various studies will be analyzed.In the end recommendation on the choice of appropriate pay scheme will be offered and overall conclusions will be drawn to finally answer the initial question.
Reward is a motivating factor when it is directly connected with the results of the work performed.
Employees must be convinced of the strong association between receiving financial reward and productivity of their work.
There are different variants, on which payment can be based, such as performance of the whole organization, its division, team or individual results.
Usually PRP involves the following three stages: development of the criteria, with the help of which employee’s performance will be assessed, defining whether employees meet the set criteria and link the achievements of employees to the payment structure.
There are a lot of studies (Heywood S; Lazear, E; Miceli M. Almost all studies have confirmed the correctness of this theory.
It argues: those who work better than others, expect to see a direct relationship between how they perform the work and rewards for which they expect.
The most widespread types of PRP are the following (Mc Nabb and Whitfield, 2007): Individual schemes of performance-related incentives are usually aimed at facilitation of better performance of each employee, as it is considered that people perform better if the understand how their actions contribute to the actual sum of money they receive.
Group schemes are usually directed at promotion of collective work for objectives achievement.
In addition, they have a clear understanding of exactly how the work must be done, and the sense that they do it well.
Accordingly, studies in which the expectations theory used to predict how people choose their work, have shown that people prefer to go for interviews and choose the work that corresponds with their expected rewards.