Question: You have announced pay for performance system, however, your budget is not large enough to truly differentiate between your top performers and your marginal performers.

You have announced pay for performance system, however, your budget is not large enough to truly differentiate between your top performers and your marginal performers. What is a possible outcome?

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You may end up with high turnover among your marginal performers because of perceived inequity

All employees will be more motivated to achieve the new performance goals.

Employees will be motivated to work together in teams to increase the likelihood of rewards.

Your top performers will perceive the plan as inequitable and may leave the company

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