Employee behaviour towards pay-for-performance in a collections environment of a financial institution

Abstract

Pay-for-performance or performance related pay is a system whereby compensation or rewards is linked to the achievement of targets and goals. The question that is asked: is pay-for-performance aiding in getting employees to perform at their peak? A review was done of literature looking specifically at pay-for-performance and organisations where this has been implemented as well as supporting themes: motivation, job satisfaction, psychological contract, team work and performance appraisal. A survey was conducted among employees in a collections environment in a financial institute in South Africa, where a pay-for-performance scheme was implemented in two departments performing similar functions. Employees in one department received incentive payments and employees in the other did not. A survey was conducted among these employees to measure their attitudes towards pay-for-performance and supporting themes. Difference in the attitudes of the subgroups within the study was also considered. Although both departments agreed that pay-forperformance was a good principle, the department that received the incentive payment more strongly agreed to the pay-for-performance measurements. Some other fascinating observations included general positive attitudes of temporary employees. The role of performance management also delivers some interesting observations. No obvious links could have been made between pay-for-performance and the specified themes. Copyright