Question

Design a Pay for Performance Plan based on efficiency, equity, and compliance. Explore four major goals that are Pay for Performance Based. This should be at least 1200 words

Answer 1

GOALS  FOR PAY FOR PERFORMANCE

1. Increase in retention rate
2. Increase in employee performance
3. Increase in organizational performance
4. Improving equity (fairness / justice ) in pay structure

“pay-for-performance compensation” means performance-based pay programs where an employee is incentivized and rewarded for achieving goals or objectives.

the broad design of pay for performance plan is as follows :

The total pay structure shall be 80% fixed and 20% variable across the board . However , beyond this a discretionary bonus of a (maxixmum )upto 50 % of the total basic pay is payable in case of exceptional performers.

1. Merit pay increases : based annually these will increase the base pay ; this will be a minimum increase of 5% , going up to a maximum of 30% of the highest performers . people who do not meet the minimum performance criteria will not be paid any merit increase .

2. Variable pay : as described above 20% of the total pay based on reaching various performance crtiteria (goal based )

variable pay	target achievement
0-10%	upto 70%
10-15%	70- 90%
20%	90% and above

The above plan attemts to design Pay for Performance Plan based on efficiency, equity, and compliance.

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