What are the main steps in creating performance related pay systems?
• setting objectives • appraising results • linking achievements to pay (and deciding how much to pay and where the money comes from) Where output cannot be measured, the sensible solution seems not to pay any bonus. However just because some jobs are difficult to measure, doesn’t mean that good performance shouldn’t be rewarded. This problem has generally been tackled by providing a lieu bonus based on average bonus earnings to those employees – very often skilled maintenance staff and supervisors – whose work is difficult to measure. In most systems for manual workers the pay packet is in fact made up of a number of components, usually including a fixed basic payment, a variable bonus paid on output of acceptable quality and a fall back provision. Bonus payments are usually paid weekly or monthly. In IPRP systems for white-collar workers the pay packet includes a fixed salary element, where progress through a range may be according to performance, and/or a variable bonus paid out for
