Question

Do you think utilization management will affect Pay-for-performance (P4P)? Why?

Answer 1

Answer:

Yes, we do think that utilization management will affect Pay-for-performance (P4P) approach because of the following key reasons as below Utilization management approach will call for larger utilization of the employee irrespective of their performance. Here the need is of employee utilization rather than performance. Thus it will impact the management to pay to the employees who have higher utilization, so that employee morale and motivation will be high and he will be able to support for future projects if needed for larger utilization. Thus here the pay for performance will be missing and such employee will not get good pay as compared to the lower performing employee but larger utilization of the employee. The larger utilization does not call that the performance is good. A poor performer can be utilized for longer duration; hence a poor performer will get better pay than a good performer because of the utilization approach by the management.

The pay for performance approach will be highly impacted the thought process of the manager and the manager will try to pay high for the employee who have supported for larger time i.e. who have larger utilization than the performance of the employee. So we can say that utilization management approach will have high adverse impact on the approach of pay for performance in the organization. O we need to be very clear in exploring utilization management with pay for performance approach, as both have inverse impact on each other. We need to develop plan for balanced use of both the approaches in the organization.