Discussion board 6

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Tiffany Ketter

One reason why pay-for-performance (P4P) plans have become more popular is because more workers are demanding it one way or another, and employers are realizing that as a result of P4P plans, employees are more productive. “Almost a third of American workers whose pay is not tied in some way to their performance believe they would be more productive if they had a greater interest in the companies that employ them through benefits such as profit sharing, according to a survey from temporary staffing and outsourcing firm Kelly Services.” (Miller, 2010, paragraph 1). Another reason P4P plans have become more popular is because it works very well to motivate employees to work hard and be more productive for the company, while at the same time enjoying added benefits for themselves. It’s a win-win for the organization and the employees alike. It also contributes to a work culture that fosters good teamwork, creativity, and high levels of motivation because employees will continue to work hard toward the goals of the company as they enjoy added benefits for their individual performances and their performance as a team. Another thing I thought about concerning P4P plans’ popularity is that top talent is being retained because of it and are gravitating towards organizations that offer it. Because organizations want top talent, and top talent finds P4P plans attractive, they offer it so top talent can be won over.

There are many elements necessary to make P4P plans successful. One element is understanding what the company’s overall business strategy is because the P4P plan should line up with it. Another element is to communicate objectives to employees as well as allow time for those employees and managers to align individual and team objectives with the company objectives. Also, an integrated set of financial and strategic objectives must be created. A range of financial and strategic performance levels and commensurate reward levels must be set, and payout opportunities that are consistent with the value of the performance must be provided and meaningful to employees. (CompensationGPS, 2017). It is very important to maintain good communication between all parties to ensure that all information is understood and that all goals are aligned in order for P4P plans to be successful.