论文部分内容阅读
Abstract： Performance-related pay is very important in the aspect of human resource in an organization. However， it also has some weaknesses. This article analyzes the performance-related pay （PRP） system from an overall point of view.
Keywords： performance-related pay， overall value
Since at least the late 1940s， the performance-related pay has been well created （Redman and Wilkinson 2009）. Nowadays， it is common for worldwide companies to take performance-related pay （PRP） systems. As White and Druker （2009） suggest that although the judgments applied to balance pay system have altered in different ages， the performance-related pay is rising and play a more and more influential role in human resource management. Why performance-related pay system is favored by managers？ It has its own strengths. White and Druker （2009） argue that paying according to performances is a comparatively simple method since it associates with results， namely， the amount of outcomes. However， the weaknesses of performance-related pay can not be neglected. In this essay， the definition of PRP and merit pay will be stated first； closely， different types of payments by results will be clarified. Second， both of strengths and weaknesses will be discussed， and each side is on a basis of employer and employee’s perspectives. Then， an overall evaluation of PRP will be estimated in the end.
Strengths
From Employers’ Perspective
Firstly， PRP measures can help organizations to retain excellent staff members. Meanwhile， Torrington et al. （2008） hold the same opinion that one of the attractions of PRP is to keep excellent staff members staying in the company. Outstanding staff members would like to continue to stay because their performances have been noticed， and their hard work is not wasted. Besides， the employee’s self-value will be realized by PRP. In that case， employees prefer to stay in this company. Then the company can avoid the outflow of the talent to a degree， which nearly solves one of the biggest problems that a company may encounter.
Secondly， PRP measures may offer employees motivation and stimulation to strengthen their skills. Torrington et al. （2008） support this opinion well. They indicate that one of the significant influences of PRP is improving motivation to perform better. Therefore， the company may have a higher efficiency and in a better situation. Dowling and Richardson （cited in Boselie et al 2001） also signified that PRP has a beneficial and effective impact on motivation. Employees work to live. Gaining more money means a richer life to them. Everyone would like to have better living conditions. So， money definitely becomes a motivation to reinforce their skills. Certainly， PRP can help employees receive the sense of identity and organizational status， which is also a motivation to urge them to reinforce their professional skills. Thirdly， according to Kalleberg and Moody（1994） （cited in Boselie et al. 2001） ， PRP can improve customer satisfaction and aspects of products， such as product quantity， sales of product. The PRP system enables employees have a positive attitude towards their work， which is advantageous to increase satisfaction from customers， especially in customer service posts. For aspects of products， most of employees would like to produce more products than others to gain rewards. In other words， rewards are their incentives. Hence， productivity is enhanced by application of PRP measures.
From Employees’ Perspective
To begin with， staff members’ job satisfaction and enjoyment will likely be reinforced. If a company utilizes PRP system， good performers in this company will earn more than other colleagues. Contrast of income among colleagues will to an extent determine the degree of satisfaction （Lawler cited in Armstrong and Stephens 2005）. If an employee’s pay is more than his or her colleagues， he or she may have a feeling of satisfaction. Porter and Lawler （cited in Armstrong and Stephens 2005） also point out that employees who earn more rewards are perhaps more satisfied than others. Besides， Heneman et al. （cited in Sweins and Kalmi 2008） argue that satisfaction is a way to improve effectiveness. If an employee feels satisfied with his or her job， he or she may work hard， and tries best to improve effectiveness.
Another advantage of PRP is that it can help to achieve fairness because PRP can prove employees’ ability and value. According to Armstrong and Stephens （2005）， rewards are equal to a staff member’s donation and worth. People who contribute more to the corporation gain more reward. It can promote fairness and guarantee the most excellent employee’s benefit not the worst. Try to consider that if there is no such a reward system to weigh employees’ performance， employees are aimless and do not know what is right and what is appraised. It can be seen that appraisal standard is very significant， and PRP is rightly a standard to support the company.
Weakness
From Employers’ Perspective
In the first place， PRP measures may lead employees to concentrate on short-term goals. Kohn （1993） gave an indication by using a metaphor： “Promising a reward to some who appears unmotivated is a bit like offering salt water to someone who is thirsty”. This metaphor is very lively. Although it can help to relieve thirst temporarily， it is never a sustainable and beneficial way. A slow development or even worse results may occur since employees focus on speed not the quality to attain short-term goals. Marsden and French （1998） （cited in Chamberlin et al 2002） indicate that approximate a half civil service and hospital line managers maintain that PRP helps to enhance the productivity， however， quality may decline. In the second place， teamwork perhaps can be frustrated by using PRP. Due to individual nature， there usually are conflicts of interest among colleagues （Torrington et al 2008）. Excessive rivalries can undermine the development of a company. Moreover， it would create an uncomfortable atmosphere in companies. Marsden and French （cited in Chamberlin et al 2002） pointed that in a study of the Employment Service， there were 52 percent of people to indicate that they actually do not prefer to support their colleagues， and 78 percent of people revealed jealousies among colleagues. It abundantly weakens the cohesive power of a team. Serious results may occur， such less competitive power in the whole market.
In the third place， targets which are not paid will be disregarded. Chamberlin et al （2002） signify that one of the main flaws of PRP is that employee would like to concentrate on weighable tasks， and the tasks which are not be paid but important will encounter ignorance. It extremely undermines the improvement of a company. Examples are sufficient to be found. Teachers may aim to improve their students’ scores to reach the required standard， nevertheless， they ignore the students which are already satisfied enough or those are still needed to spend considerable time to develop （Chamberlin et al 2002）. Similarly， Torrington et al （2008） completely agree with this opinion. They state that employees paid by PRP incline to focus tasks paid by money， and ignore other tasks that not paid by money.
From Employees’ Perspective
To start with， PRP is likely to be considered to result in improper use by managers. Plentiful performance evaluations about the employees are closely connected with managers’ opinion， and bias may not be avoided （Ivancevich 2010）. If that happens， employees will suffer unfairness. And their working passion will be frustrated. According to Armstrong and Stephens （2005）， in the bank of Lloyds TSB， Line managers are empowered to be in charge of the pay of their subordinates in the range of pay budgets held locally. This system provides ample power to line managers. It seems that subordinates’ fates are determined by line managers since all the performances， contributions， abilities and talents are weighed by line managers. Similarly， Paauwe and Richardson （2001） signify that line managers are the fragile junction in the PRP systems.
Moreover， PRP systems incline to restrain employees’ innovative ideas. Torrington et al （2008） describe that employees may not attempt to challenge the existing standards or problems due to PRP systems. Indeed， PRP systems lead employees， to an extent， to become utilitarianism. They leave less time to consider and analyze things， even when they find problems， they abandon their possible solutions. Additionally， the flaw cited above may generate conflicts between employees and employers. Two situations are likely to happen. One is the direct conflict between line managers and subordinates. Another is the indirect conflict between employee s and the company. The stable and harmonious environment of the company will be threatened by both of those two situations. If internal conflicts are fierce， employees’ working passion will undoubtedly decrease to a large extent. The cohesive power of the company will be weakened， which may lead this company to a less competitive status in the whole market.
Overall Value
In the PRP system， there is apparent relationship between performance and profit. Employees’ performances are better， then they gain more rewards. Though it seems that money and prize are the outside stimulation， the PRP system has its own advantages. If the performance has the appropriate connection with rewards， it can activate employees’ working passion and improve the company’s efficiency. However， if the relationship between performance and pay， such as excessive attention to rewards， internal stimulation will weaken. Besides， balanced relationship between performances and rewards should be explored in public service. For example， there is an investigation in the NHS workers and it shows that only one-third workers consented to strengthen their motivator by PRP， and 12 percent workers admitted to make more efforts （Chamberlin et al 2002）.
Additionally， the quality of the product deserves to be noticed. PRP system can bring conflicts between long-term goal and short-term goal. Employees aim to obtain rewards by achieving the task hastily， therefore， the quality of the product is likely to decrease. From this perspective， it undermines the long-run development of an organization， and several weaknesses will emerge. Those weaknesses can not be ignored， and some of them even result in bankrupt. For instance， there are several Chinese milk companies to encounter bankruptcies due to ignorance of the quality of milk. These companies put a chemical addictive （named melamine） into the milk to improve percentages of protein. It seems nothing happened in the short term， however， it brings an extremely damage to people’s health and the company itself. This shocking news spread in China these years， and Chinese are in a great fear while choosing milk products.
Finally， conflicts between a team and individual members should be weighed. Everyone in the team would like to obtain appraisal and reward， which may cause that nobody wants to share resources and ideas with others， or do not prefer to help other colleagues. Hence， the team benefit and the individual benefit should be found a better way to balance， and create a common goal between a team and individual. Besides， conflicts may emerge due to unfair and subjective judgment. According to Torrington et al （2008）， even managers with rich experience believe that it is not easy to make an impartial judgment of their subordinates. Managers may favour a particular subordinate or do not appreciate a subordinate. Employees will feel that it is unfair， and the working passion will be undermined. To conclude， this essay has discussed the strengths and weaknesses of performance-related pay （PRP） systems from employers and employees’ perspectives. Besides， an overall value of PRP has been examined. Among the discussion， some practical cases and examples are referred， such as an investigation in NHS， the Lloyds TSB reward system and bankruptcies of Chinese milk companies. Since performance-related pay has both of advantages and disadvantages， managers should use it effectively. Merits should be strengthened， and on the other side， drawbacks should be avoided and mended to a large extent. Brown and Armstrong （cited in Torrington 2008） state that although PRP has its own problems， it still has potential to carry out satisfyingly. Furthermore， they also signify that when implementing PRP， other reward methods should be regarded with it. In that case， PRP system will tend to be more scientific and reasonable.
References
[1]Armstrong， M. and Stephens， T. （2005） A Handbook of Employee Reward Management and Practice London： Kogan Page Limited
[2]Boselie， P. et al. （2001） “Human resource management and performance： lessons from the Netherlands” Int.J.of Human Resource Management 12：7 November2001 1107-1125
[3]Brown， D. and Armstrong， M. （1999） Paying for Contribution： Real Performance-related Pay Strategies London： Kogan Page Limited
[4]Chamberlin， R. et al （2002） “Performance-related Pay and the Teaching Profession： A Review of the Literature” Research Papers in Education 17（1） 2002， pp. 31-49
[5]Ivancevich， J. M. （2010） Human Resource Management（11th edition） New York： McGraw-Hill/Irwin
[6]Kessler， I. （2001） `Reward system choices`， in J. Storey （ed.） Human Resource Management： A Critical Text （2nd） London： Routledge
[7]Kohn， A. （1993） Why incentive plans cannot work. Harvard Business Review （September-October）： 54-63.
[8]Paauwe， J. and Richardson， R. （2001） “Editorial introduction： HRM and performance： confronting theory and reality” Int.J. of Human Resource Management 12：7 November 2001 1085-1091
[9]Redman， T. and Wilkinson， A. （2009） Contemporary Human Resource Management： Text and Cases （3rd edition） Harlow： Pearson Education Limited
[10]Sweins， C. and Kalmi， P. （2008） “Pay knowledge， pay satisfaction and employee commitment： evidence from Finnish profit-sharing schemes” Human Resource Management Journal Vol 18， no 4， 2008， pages 366-385
[11]Torrington， D. et al （2008） Human Resource Management （7th edition） Harlow： Pearson Education Limited
[12]White， G. and Druker， J. （2009） Reward Management： a critical text （2nd ed） Abingdon： Routledge
Keywords： performance-related pay， overall value
Since at least the late 1940s， the performance-related pay has been well created （Redman and Wilkinson 2009）. Nowadays， it is common for worldwide companies to take performance-related pay （PRP） systems. As White and Druker （2009） suggest that although the judgments applied to balance pay system have altered in different ages， the performance-related pay is rising and play a more and more influential role in human resource management. Why performance-related pay system is favored by managers？ It has its own strengths. White and Druker （2009） argue that paying according to performances is a comparatively simple method since it associates with results， namely， the amount of outcomes. However， the weaknesses of performance-related pay can not be neglected. In this essay， the definition of PRP and merit pay will be stated first； closely， different types of payments by results will be clarified. Second， both of strengths and weaknesses will be discussed， and each side is on a basis of employer and employee’s perspectives. Then， an overall evaluation of PRP will be estimated in the end.
Strengths
From Employers’ Perspective
Firstly， PRP measures can help organizations to retain excellent staff members. Meanwhile， Torrington et al. （2008） hold the same opinion that one of the attractions of PRP is to keep excellent staff members staying in the company. Outstanding staff members would like to continue to stay because their performances have been noticed， and their hard work is not wasted. Besides， the employee’s self-value will be realized by PRP. In that case， employees prefer to stay in this company. Then the company can avoid the outflow of the talent to a degree， which nearly solves one of the biggest problems that a company may encounter.
Secondly， PRP measures may offer employees motivation and stimulation to strengthen their skills. Torrington et al. （2008） support this opinion well. They indicate that one of the significant influences of PRP is improving motivation to perform better. Therefore， the company may have a higher efficiency and in a better situation. Dowling and Richardson （cited in Boselie et al 2001） also signified that PRP has a beneficial and effective impact on motivation. Employees work to live. Gaining more money means a richer life to them. Everyone would like to have better living conditions. So， money definitely becomes a motivation to reinforce their skills. Certainly， PRP can help employees receive the sense of identity and organizational status， which is also a motivation to urge them to reinforce their professional skills. Thirdly， according to Kalleberg and Moody（1994） （cited in Boselie et al. 2001） ， PRP can improve customer satisfaction and aspects of products， such as product quantity， sales of product. The PRP system enables employees have a positive attitude towards their work， which is advantageous to increase satisfaction from customers， especially in customer service posts. For aspects of products， most of employees would like to produce more products than others to gain rewards. In other words， rewards are their incentives. Hence， productivity is enhanced by application of PRP measures.
From Employees’ Perspective
To begin with， staff members’ job satisfaction and enjoyment will likely be reinforced. If a company utilizes PRP system， good performers in this company will earn more than other colleagues. Contrast of income among colleagues will to an extent determine the degree of satisfaction （Lawler cited in Armstrong and Stephens 2005）. If an employee’s pay is more than his or her colleagues， he or she may have a feeling of satisfaction. Porter and Lawler （cited in Armstrong and Stephens 2005） also point out that employees who earn more rewards are perhaps more satisfied than others. Besides， Heneman et al. （cited in Sweins and Kalmi 2008） argue that satisfaction is a way to improve effectiveness. If an employee feels satisfied with his or her job， he or she may work hard， and tries best to improve effectiveness.
Another advantage of PRP is that it can help to achieve fairness because PRP can prove employees’ ability and value. According to Armstrong and Stephens （2005）， rewards are equal to a staff member’s donation and worth. People who contribute more to the corporation gain more reward. It can promote fairness and guarantee the most excellent employee’s benefit not the worst. Try to consider that if there is no such a reward system to weigh employees’ performance， employees are aimless and do not know what is right and what is appraised. It can be seen that appraisal standard is very significant， and PRP is rightly a standard to support the company.
Weakness
From Employers’ Perspective
In the first place， PRP measures may lead employees to concentrate on short-term goals. Kohn （1993） gave an indication by using a metaphor： “Promising a reward to some who appears unmotivated is a bit like offering salt water to someone who is thirsty”. This metaphor is very lively. Although it can help to relieve thirst temporarily， it is never a sustainable and beneficial way. A slow development or even worse results may occur since employees focus on speed not the quality to attain short-term goals. Marsden and French （1998） （cited in Chamberlin et al 2002） indicate that approximate a half civil service and hospital line managers maintain that PRP helps to enhance the productivity， however， quality may decline. In the second place， teamwork perhaps can be frustrated by using PRP. Due to individual nature， there usually are conflicts of interest among colleagues （Torrington et al 2008）. Excessive rivalries can undermine the development of a company. Moreover， it would create an uncomfortable atmosphere in companies. Marsden and French （cited in Chamberlin et al 2002） pointed that in a study of the Employment Service， there were 52 percent of people to indicate that they actually do not prefer to support their colleagues， and 78 percent of people revealed jealousies among colleagues. It abundantly weakens the cohesive power of a team. Serious results may occur， such less competitive power in the whole market.
In the third place， targets which are not paid will be disregarded. Chamberlin et al （2002） signify that one of the main flaws of PRP is that employee would like to concentrate on weighable tasks， and the tasks which are not be paid but important will encounter ignorance. It extremely undermines the improvement of a company. Examples are sufficient to be found. Teachers may aim to improve their students’ scores to reach the required standard， nevertheless， they ignore the students which are already satisfied enough or those are still needed to spend considerable time to develop （Chamberlin et al 2002）. Similarly， Torrington et al （2008） completely agree with this opinion. They state that employees paid by PRP incline to focus tasks paid by money， and ignore other tasks that not paid by money.
From Employees’ Perspective
To start with， PRP is likely to be considered to result in improper use by managers. Plentiful performance evaluations about the employees are closely connected with managers’ opinion， and bias may not be avoided （Ivancevich 2010）. If that happens， employees will suffer unfairness. And their working passion will be frustrated. According to Armstrong and Stephens （2005）， in the bank of Lloyds TSB， Line managers are empowered to be in charge of the pay of their subordinates in the range of pay budgets held locally. This system provides ample power to line managers. It seems that subordinates’ fates are determined by line managers since all the performances， contributions， abilities and talents are weighed by line managers. Similarly， Paauwe and Richardson （2001） signify that line managers are the fragile junction in the PRP systems.
Moreover， PRP systems incline to restrain employees’ innovative ideas. Torrington et al （2008） describe that employees may not attempt to challenge the existing standards or problems due to PRP systems. Indeed， PRP systems lead employees， to an extent， to become utilitarianism. They leave less time to consider and analyze things， even when they find problems， they abandon their possible solutions. Additionally， the flaw cited above may generate conflicts between employees and employers. Two situations are likely to happen. One is the direct conflict between line managers and subordinates. Another is the indirect conflict between employee s and the company. The stable and harmonious environment of the company will be threatened by both of those two situations. If internal conflicts are fierce， employees’ working passion will undoubtedly decrease to a large extent. The cohesive power of the company will be weakened， which may lead this company to a less competitive status in the whole market.
Overall Value
In the PRP system， there is apparent relationship between performance and profit. Employees’ performances are better， then they gain more rewards. Though it seems that money and prize are the outside stimulation， the PRP system has its own advantages. If the performance has the appropriate connection with rewards， it can activate employees’ working passion and improve the company’s efficiency. However， if the relationship between performance and pay， such as excessive attention to rewards， internal stimulation will weaken. Besides， balanced relationship between performances and rewards should be explored in public service. For example， there is an investigation in the NHS workers and it shows that only one-third workers consented to strengthen their motivator by PRP， and 12 percent workers admitted to make more efforts （Chamberlin et al 2002）.
Additionally， the quality of the product deserves to be noticed. PRP system can bring conflicts between long-term goal and short-term goal. Employees aim to obtain rewards by achieving the task hastily， therefore， the quality of the product is likely to decrease. From this perspective， it undermines the long-run development of an organization， and several weaknesses will emerge. Those weaknesses can not be ignored， and some of them even result in bankrupt. For instance， there are several Chinese milk companies to encounter bankruptcies due to ignorance of the quality of milk. These companies put a chemical addictive （named melamine） into the milk to improve percentages of protein. It seems nothing happened in the short term， however， it brings an extremely damage to people’s health and the company itself. This shocking news spread in China these years， and Chinese are in a great fear while choosing milk products.
Finally， conflicts between a team and individual members should be weighed. Everyone in the team would like to obtain appraisal and reward， which may cause that nobody wants to share resources and ideas with others， or do not prefer to help other colleagues. Hence， the team benefit and the individual benefit should be found a better way to balance， and create a common goal between a team and individual. Besides， conflicts may emerge due to unfair and subjective judgment. According to Torrington et al （2008）， even managers with rich experience believe that it is not easy to make an impartial judgment of their subordinates. Managers may favour a particular subordinate or do not appreciate a subordinate. Employees will feel that it is unfair， and the working passion will be undermined. To conclude， this essay has discussed the strengths and weaknesses of performance-related pay （PRP） systems from employers and employees’ perspectives. Besides， an overall value of PRP has been examined. Among the discussion， some practical cases and examples are referred， such as an investigation in NHS， the Lloyds TSB reward system and bankruptcies of Chinese milk companies. Since performance-related pay has both of advantages and disadvantages， managers should use it effectively. Merits should be strengthened， and on the other side， drawbacks should be avoided and mended to a large extent. Brown and Armstrong （cited in Torrington 2008） state that although PRP has its own problems， it still has potential to carry out satisfyingly. Furthermore， they also signify that when implementing PRP， other reward methods should be regarded with it. In that case， PRP system will tend to be more scientific and reasonable.
References
[1]Armstrong， M. and Stephens， T. （2005） A Handbook of Employee Reward Management and Practice London： Kogan Page Limited
[2]Boselie， P. et al. （2001） “Human resource management and performance： lessons from the Netherlands” Int.J.of Human Resource Management 12：7 November2001 1107-1125
[3]Brown， D. and Armstrong， M. （1999） Paying for Contribution： Real Performance-related Pay Strategies London： Kogan Page Limited
[4]Chamberlin， R. et al （2002） “Performance-related Pay and the Teaching Profession： A Review of the Literature” Research Papers in Education 17（1） 2002， pp. 31-49
[5]Ivancevich， J. M. （2010） Human Resource Management（11th edition） New York： McGraw-Hill/Irwin
[6]Kessler， I. （2001） `Reward system choices`， in J. Storey （ed.） Human Resource Management： A Critical Text （2nd） London： Routledge
[7]Kohn， A. （1993） Why incentive plans cannot work. Harvard Business Review （September-October）： 54-63.
[8]Paauwe， J. and Richardson， R. （2001） “Editorial introduction： HRM and performance： confronting theory and reality” Int.J. of Human Resource Management 12：7 November 2001 1085-1091
[9]Redman， T. and Wilkinson， A. （2009） Contemporary Human Resource Management： Text and Cases （3rd edition） Harlow： Pearson Education Limited
[10]Sweins， C. and Kalmi， P. （2008） “Pay knowledge， pay satisfaction and employee commitment： evidence from Finnish profit-sharing schemes” Human Resource Management Journal Vol 18， no 4， 2008， pages 366-385
[11]Torrington， D. et al （2008） Human Resource Management （7th edition） Harlow： Pearson Education Limited
[12]White， G. and Druker， J. （2009） Reward Management： a critical text （2nd ed） Abingdon： Routledge