These are base the principles, as the individual payment by results system, but are used when the individualistic approach is not wanted by the organisation. For example, in order to try to encourage team working or on take into account support workers who contribute to overall output, but whose contribution may be difficult to assess, some organisations introduce a system of group payment by results. The from of incentive or reward chosen should reinforce behaviour that results in effective teamwork and this also needs to fit with the culture and structure of the organisation. According to the BGC Code 2010, hierarchical structures are inappropriate for team working. It is difficult to team spirit if individuals are focusing on promotion.
The size of the group may vary from small teams or work units to the whole plant or enterprise. All types of reward or incentive can work with teams and the most usual include team pay or bonuses through to non-financial rewards such as recognition or increased responsability for the team.
Performance-related pay or merit rating Performance-related pay, which is sometimes referred to as merit rating is also a way of linking and individual´s pay progression to their level of performance or to a rating of competence. It is once again an individualistic approach which favours rewarding people differently according to level of performance or competence and it aims to motivate all employees and give clear indications of what the organisation expects from employees. Performance-related pay differs from payment by results as it does not relate just to the quantity of a product that is produced, and may apply to workers even where there is no end product to measure.
Initially performance-related pay was used as a motivational tool, increasingly some organisations have become aware of limitations as it did not always deliver the results expected or may have had unintended consequences as it encourages employees to focus on their own results rather than working as a team.
Performance-related pay, is often regarded as key feature of performance managements schemes do not opérate performance-related pay, most do use it. While the motivational theorists cast doubt on the value of money as a motivator , many managers instinctively feel that money will motivate employees. Some organisations even if they do not feel that it will have a strong motivational effect, introduce performance-related pay asa way of being fair and rewarding high performer past performance, and so argue that equity is the rationale for the introduction os such a scheme. The fact that performance is considered at all can also have positive effects,in that it helps to créate a culture in which performance is valued and recognition of good performance can be a reward in itself. If a performance-related pay system is to be perceived to be fair it is important to emphasise that performance-related pay needs to be base on what can be seen to be a fair and just system of allocation with clear objective criteria being used.
Our definitions of performance are now being use dan the focus is moving towards assessing an employee´s contribution or input to the organisation rather than just their output. This is much broader than measuring their performance simply in term of what they have achieved. Some of their achievement, or lack of achievement may be because of external factors outside their achievement or lack of achievement , may be because of external factors outside their control such as a change in the economy or a competitor going out of business, but their contribution to helping to achieve departmental and organisational objectives is under their control more.
- Salary increases within the normal salary scale
- Salary increases above the máximum point of the normal pay scale
- Each employee is paid on an individual fixed rate, with good performers getting something above the normal rate
- Bonus payments that are not included in salary
- Non-monetary awards
- Commendation
- Overseas travel
- Gifts
- Gift vouchers
- Green environmental rewards