Pay for Performance

Measuring the effectiveness of any plan or program involving the process of evaluating that whether or not that plan or program has been able to achieve the goals and targets, which it was intended to achieve. In most cases, companies implement pay for performance systems because they want to improve the baseline profitability and financial situation of the company (Gerhart Rynes, 2003). However, the same does not take place directly but pay for performance have a direct relationship with employee motivation, employee satisfaction and their on job performance which later goes on to translate into financial results. Therefore, effectiveness of pay for performance can be measured with surveys aims at findings about employee satisfaction and motivation levels (Gomez-Mejia, 2010).