That people are motivated, passionate about their jobs and focused on achieving organizational objectives, are challenges that companies face. The pay-performance relationship seems to be a source of highly motivated workers
It is difficult to define which are the key elements when seeking the maximum motivation of human talent in a company. Some think that money can do everything, others believe that it is better to emphasize organizational culture and values, which one works best? Each organization defends its system.
There are many companies that base part of their compensation systems on the salary incentive as a way to achieve greater performance and efficiency on the part of the employees. These companies, in addition to the "basic" salaries and social benefits, add variable components to the remuneration The latter are tied to the results in a certain specific area or to the general performance of the organization.
Cash 'rewards' seem to be a factor that actually drives productivity gains, a study by The Economist Intelligence Unit (EIU), 'Motivating and Rewarding Managers', on the ways in which companies motivate and compensate their managers shows results in this direction. Leading organizations that seek to grow through innovation and cutting-edge management practices pay close attention to the motivation of their human talent and the way in which they can be compensated for the work carried out, making this area a key factor for generate high performances.
These companies are focusing their efforts on the satisfaction of their staff more than on strategic or other issues, which is why they develop compensation models that encourage employees to give better performance.
The act of adopting a variable payment system tied to performance is not a question of whether it is useful or not, rather it is a question of when its implementation is necessary
But beyond knowing whether it is good or not, tying compensation to the performance of the firm is a matter of culture. It is clear that this compensation system is beneficial for the company because it causes higher levels of efficiency and performance, what is not very clear is whether the people who work in the company are willing to give up traditional payment systems to benefit from it. to a variable compensation model in which if you don't get results you don't win.
In addition, there is a questioning of the incentive systems in money. Is a climate of motivation being created or is it leading to the creation of mercenaries who would do everything for money? Here the questioning is rather moral and the same EIU study shows that using money as the sole motivator is not a 100% reliable solution to the problem of motivating human talent.
The reward does not motivate individuals to work better, it simply acts as a channel for people's behavior, it is a matter of conditioning, to a certain extent very similar to that performed by a circus with his animals in which if the animal performs its Act correctly you will be rewarded with a good meal.
Money only motivates individuals who are already motivated
Another item of discussion focuses on how measurable variable compensation can be, how much performance-enhancing power can be attributed to this system when its implementation is typically accompanied by a series of policy changes, and company strategies. For example, one of the premises of Value-Based Management (GVB) is to tie compensation to performance, but along with this measure are a series of new approaches that, when introduced, could skew any measurement that you want to make in terms of to the performance-compensation system relationship.
One element in favor of this type of compensation is the significant reduction in labor costs incurred by companies, most likely all firms and labor schemes of the nations turn towards this form of payment, otherwise the payment of future pensions It will be traumatic, in addition, these savings can be invested in activities that generate higher returns, both for the firm and for the employee.
Finally, the salary reward, whether in the form of bonuses, bonuses, stocks, cars, studies, etc., for achieving specific or general objectives, must be accompanied by other stimuli such as greater participation in decision-making, greater autonomy, more open information, etc., so that they allow the individual to achieve high levels of satisfaction and feel an integral part of the company and its results.
