Edexcel Business A Level Revision

Performance-related pay - is a scheme where wages or salaries are linked to performance in the workplace. There are many different schemes... KEY FEATURES An appraisal (review of performance) is conducted by senior managers Payment may be based on specific targets Goals and/or targets are set for the next appraisal ADVANTAGES Senior managers can easily monitor and assess individual employee performance during appraisal process Setting of targets for employees can ensure they are all closely focused to company objectives DISADVANTAGES Discourages a team based approach - can create unhealthy rivalry between managers Can be difficult to accurately measure performance of some workers e.g. in service sector firms Incentives may not be large enough to motivate employees Employees may disagree with the appraiser

Bonus - designed to motivate employees by rewarding them for achieving particular targets or standards set by the employer. KEY FEATURES  Can help to recruit, motivate and retain staff Can increase employee commitment to the business ADVANTAGES A bonus payment to an employee can be used as an incentive, especially in a field where employees must make sales or meet specific goals. Bonus payments do not have to be awarded on a holiday, at the end of the year or as an incentive. A bonus payment can also be used as a means of appreciation for an employee’s hard work throughout the year or in a specified amount of time in the year. Receiving a bonus payment will not only show the employee he was appreciated for his hard work, but it will motivate him to continue to work hard for further rewards. DISADVANTAGES Not all jobs show a clear link between performance and productivity or profit Employees may neglect other goals to concentrate on bonus targets. Because bonus...