The Pay for Performance Approach

Subject: Employee Management
Pages: 1
Words: 153
Reading time:
< 1 min
Study level: Undergraduate

The question of salary pay raise is quite multi-faceted. Employees might start considering other options if they discover that other companies could pay considerably more for executing the same responsibilities. Nevertheless, it is better to provide workers with pay increases after the evaluation of their performance. In this case, it is possible to apply the pay for performance (PFP) approach, which means that salaries depend on employees’ performance measured in terms of obtained results (Kuvaas, 2016). Thanks to PFP, employees are going to feel recognized and rewarded for their efforts. As for bonuses, different types of incentives should praise employees for particular cases of exceeding KPI requirements. Employees should not receive pay increases for simply doing the job they are hired to do. They might start to take a pay raise for granted and not feel motivated enough. The PFP approach can assist in encouraging employees to take initiatives and do their best.


Kuvaas, B., Buch, R., Gagné, M., Dysvik, A., Forest, J. (2016). Do you get what you pay for? Sales incentives and implications for motivation and changes in turnover intention and work effort. Motivation and Emotion, 40(5), 667–680.