Bang on target? (performance-related pay)

Human Resource Management International Digest

ISSN: 0967-0734

Article publication date: 18 July 2008




Rowley, D. (2008), "Bang on target? (performance-related pay)", Human Resource Management International Digest, Vol. 16 No. 5.



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

Bang on target? (performance-related pay)

Article Type: From: Human Resource Management International Digest, Volume 16, Issue 5

Rowley D. People Management (UK), 7 February 2008, Vol. 14 No. 3, Start page: 36, No. of pages: 3

Purpose – Points to the suspicion that many senior managers’ performance-related pay schemes are not based on accurate assessments of performance. Asks if the critics of performance-related pay are right or if these pay schemes can be based on sound calculations of performance. Design/methodology/approach – Quotes the criticisms that have been made of performance-related pay schemes and discusses why many schemes have not been able to accurately link pay to performance. Outlines the work being done by firms, such as PricewaterhouseCoopers to make performance-related pay schemes more transparent. Indicates some of the non-financial measures, such as measures of employee productivity and environmental targets, that are being developed to link executive pay to areas of performance that are important for the achievement of the firm’s business strategy. Findings – Acknowledges the difficulty of linking pay to performance but argues that key company performance indicators can be linked to pay. Originality/value – Considers the efficacy of performance-related pay. ISSN: 1358-6297 Reference: 37AF641

Keywords: Performance related pay, Organizational performance, Business strategy

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