The article “Pay for performance: Show me the money” by Wentworth describes the use of managerial incentives. It states that high-performance pay is primarily used by high-performing firms to encourage and reward their skilled personnel (Wentworth, 2019). In contrast, low-performing companies are often more likely to note they utilize compensation strategies to accomplish corporate goals. High-performing firms are also more inclined to provide their top performers with greater bonuses and merit raises. Companies want to pay for a performance approach that is tailored to their specific staff and bonus program requirements (Wentworth, 2019). Whatever combination of individual, group, and organizational goals is established, it must promote behaviors that favorably affect performance and lead to organizational achieving objectives (Wentworth, 2019). Developing a winning strategy for the firm, one that recognizes highly valued individuals while also encouraging the majority to stay focused on the company’s goals, is essential.
The article addresses the key recommendations made in the chapter reading. Namely, similarly to the University of Minnesota (2016), the author has outlined the principles of transparency, equal opportunity, contrastive rewards, and specificity of the objectives defining the bonus. However, Wentworth (2019) did not describe the necessity to change the goals and update the rewards system. Yet, the article illustrates the concept identified in the chapter well.
In conclusion, I believe that high-performance pay is a valuable tool in human resource management. However, it has its drawbacks that are quickly revealed when people designing the reward system have little experience in it. For example, an appreciated worker might have a sensitive personality that would oppose such competitive measures. Thus, pay for performance should be introduced only in suitable environments and align with the firm’s ethics and corporate philosophy.
References
University of Minnesota. (2016). Chapter 6: Compensation and benefits – human resource management. Pressbooks.
Wentworth, D. (2019). Pay for performance: Show me the money. American Management Association.