Question

A noted HR trend is that “compensation entitlements are going out the window” fixed or secure pay is becoming less popular. What impact do you think this will have on employee’s motivation? What are the negative and positive aspects of this trend? Explain

Answer 1

Today the business and performance linked payouts are beginning to replace the fixed or secure pay, which means all key performance indices indicate how much aperson should be paid.

Today all employers have structured their employees in this manner where their KPIs are linked to organizations growth.

Positives:

Employees will be motivated to achieve better performance for the organization.

There will be more performing employees and less free riders.

Incentivising the performance is easy, and sales are directly related to revenue. Work of HR becomes easy.

All other employee benefits are cut down, and expenses get reduced.

Negatives:

Only measurable work will be done, all other parallel work will be ignored.

Work will be one dimentional and cross functional works will always suffer, as shared responsibility would not be entertained.

There will be less collaboration and indivdualistic approach will be present.