Who should be involved in developing Pay-For-Performance Plan and why?

Answer:

A pay-for-performance plan incentivizes the performance of employees that can be measured using financial rewards (Rasi et al., 2018). Human resource management is responsible for defining, assessing and implementing policies of rewards in an organisation (Armstrong, 2014). It stands to reason that human resource managers would be leading the development of pay-for-performance plans, since they are involved in the reward planning and implementation processes.

Additionally, managers are required to accurately assess the implications of any financial decision made within the organisation, as well observe and accurately observe the performance of employees (Lucia, 2018). Therefore, managers should also participate in the development of a pay-for-performance plan. Finally, the finance department would need to take an active role in determining appropriate levels of compensation based on the plan being developed. This is because the benefits of a pay-for-performance plan should outweigh any financial costs for the organisation.

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