Performance based pay_ppt
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Performance-based pay is a compensation method that pays employees based on work performed rather than salary or hourly wages. It provides financial rewards based on individual or group performance. There are various categories of pay systems including individual and group performance. Common performance measurement methods discussed in the document are graphic rating scales, management by objectives, and forced ranking. Both advantages and disadvantages of performance-based pay are outlined. The document also discusses the importance of performance-based pay in Nepal.
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Performance based pay_ppt
- 1. PERFORMANCE BASED PAY SUNITA SHRESTHA SHAILESH MAHARJAN
- 2. DEFINITION Performance-based pay is a method of compensation that involves paying employees for the work they do instead of paying with a salary or hourly wage. It provides financial compensation based on either focus on individual or group performance
- 3. WHY PERFORMANCE BASED PAY • People join a firm because of Pay• • People stay in a firm (or leave) because of Pay• • Employees more readily agree to develop job skills because of Pay• • Employees perform better on their jobs because of Pay
- 4. WHY PRACTICE PERFORMANCE BASED PLAN? Equity Theory by Adams (1963): When employees are not compensated for work, they will seek justice: • Decrease inputs: • slacking off • Quitting • slandering company • sabotaging co-worker’s
- 5. CATEGORIES OF PAY SYSTEM • Person • Age • Seniority?experience • Qualifications • Competence • Behaviour/traits • Attitudes • Knowledge • skills •Performance(individual) • Commission • Piecework • Individual performance- related pay/ merit pay • GROUP • Profit sharing • Gain sharing • Team bonuses
- 6. PERFORMANCE MEASUREMENT METHOD Graphic Rating Scales: Management by Objectives Forced Ranking
- 7. GRAPHIC RATING SCALES: •platform for supervisors and managers to measure employee performance. •determine whether employees are meeting the company's expectations •varies according to the work environment, type of business and, to some extent, the employee's occupation.
- 8. MANAGEMENT BY OBJECTIVES • useful for measuring the performance of employees in supervisory or managerial positions • start with identifying employee goals, • list the resources necessary to achieve those goals, • Sets the timelines for achieving each goal • The employee's performance is measured by how many set goals accomplished within the designated time frame.
- 9. FORCED RANKING • to measure the performance of an employee against the performance of his peers • identify its best and worst performers • nurture the highest achievers and improves or discards the least-effective workers. • leads to a very competitive work environment • lack of collaboration and teamwork between staff members.
- 10. THE PROS AND CONS OF PERFORMANCE PAY ARGUMENTS FOR: • Morale booster • Promotes team work • Motivational tool • Employee retention
- 11. THE PROS AND CONS OF PERFORMANCE PAY ARGUMENTS AGAINST: •Pay is not a motivator. •It demotivates staff who do not benefit. • It ruptures relationships and team work. •It discourages risk-taking.
- 12. RICHARD BRANSON Train people well enough so they can leave them, treat them well enough so they don’t want to.
- 13. WHY PFP IS IMPORTANT IN NEPAL? • According to the research done by trading economics,” GPD per capita income on Nepal was last recorded at 682.20 US Dollars in 2016.” • Pay is the main factor most of the employee changes their job/career. • Lack of Performance for pay make people to be more money minded and encourage for the corruption. Https://tradingeconomics.Com/nepal/gdp-per-capita
- 14. ABROAD COUNTRIES FOR HIGHER EDUCATION AND WORK THAT PAYS HIGH. • Nearly 15,000 Nepalese students were studying in the US in May 2017 – up 18% compared to the year before. • https://thepienews.com/news/usa-international-students-1-18-million-sevis-by-the-numbers- 2017/
- 15. WHAT CAN BE INCLUDED WHEN IT COMES TO PFP IN NEPAL • Increase in salary according to performance and capability of employee. • Available of training for employees to boost their confidence. • Labor Act, 2048 was prepared for provision for the rights interests, facilities and safety of workers and employees working in enterprises of various sectors.
- 16. MANAGEMENT BY OBJECTIVES • Many CEO and people holding higher position are lacking vision in Nepal. • After certain periods of time, evaluation about the performance can be done. • New Employee can be hired for better performance. • Helps in improving role clarity.
- 17. THANK YOU