$2$:$53$

Performance$-$related Pay

Setting goals for an employee with a clear reward at the end for achieving those goals should, in theory, motivate employees more to strive harder toward reaching them. There are a wide variety of methods used including share schemes, profit$-$related pay and straightforward bonuses, but all schemes assume the promise of pay will provide an incentive to greater performance. Salary can be set on the basis of employee performance evaluation. Targets can vary depending on the type and level of work that the individual employee does. Performance$-$related pay can also be a useful means for improving employee engagement and retention.

Performance$-$related pay may not encourage performance.

Performance$-$related pay is pay for performance, and the better performance you turn in and the harder you work the more you will get to take home. However, academics are now suggesting that more often than not the opposite may be the case. New research shows that, far from encouraging people to strive to reach the heights, performancerelated pay often does the opposite and encourages people to work less hard. An analysis of several separate experimental studies of financial incentives in employment relations found what the academics carrying out the study described as "overwhelming evidence" that these incentives could reduce an$\_$emolovee's natural inclination to completea

Which article suggests that some performance$-$related pay schemes are less than effective?

The first article only

The second article only

Both articles

Neither article