500 words. Maximizing Human Capital through Performance Management
Traditional pay plans do not have a link with today’s measured performance management systems. Instead, pay and other rewards are allocated based on position and seniority. By contrast, contingent pay plans, also called pay for performance plans, allocate rewards wholly or partly based on job performance. When rewards given in the context of contingent pay plans are not added to an employee’s base pay, they are called variable pay.
Analyze the benefits and disadvantages of traditional pay plans versus contingency pay plans.
Create a contingency pay plan for an organization that uses the traditional pay plan. Determine two factors in that contingency pay plan that would enhance human capital and directly impact performance management systems in a positive way. Predict the changes that will take place in an organization six months and twelve months after the implementation of the contingency pay plan.