Measuring the performance of employees, from executive directors down to office staff or shop floor workers, can be difficult and controversial, particularly when it is linked to pay and rewards. Directors of a large business may have their performance assessed by examining changes in market share, shareholder value, dividend yield, rate of return on capital employed, like-for-like sales or operating profit. Commission linked to the value of sales may be used to reward sales staff. Production workers may be paid according to output per worker per hour worked, or percentage of defective products.
Linking pay to performance is not always popular, because performance can be affected by many external factors that employees can do nothing about. For example, a drop in productivity may result from a strike by suppliers of components. Unforeseen changes in the global economy, as occurred in 2008, can have devastating effects on well-run, efficient and productive businesses.
Your organisation does not have access to this article.
Sign up today to give your students the edge they need to achieve their best grades with subject expertise
Subscribe
