The pay for performance schemes are implemented in various organizations in different ways. All schemes and models of employee payments which are linked to the quality and quantity of work fall under the pay for performance category. People are motivated to work harder and provide the best possible output to ensure they are paid high bonuses with respect to quantity and quality of work done. Vroom explained that motivation depends on a person’s ability to see the link between performance and rewards.
This indicates the very same phenomenon of motivation through performance or pay for performance plans. The behavioral theories of motivation also indicate that people will continue behavior that is rewarded and discontinue behavior that is punished. Most common pay for performance schemes applied in companies include variable pay plans and gain sharing pay plans, merit pays, spot awards and skill-based pay. Pay for performance does indeed motivate employees in going the extra mile for the company and applying extra effort to accomplish higher levels of productivity through efficiency. People would work productively and increase the quantity and quality of their work to gain benefit from the extra rewards attached with better performance and will continue following this behavior as it is rewarded (Sims, 2002).
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