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Should a company reward its top performers on a performance pay basis?

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A: Pay for performance is where the compensation market is going, and is an excellent option for employers during a sluggish economy. Rather than providing marginal pay increases (across the board merit increases) to all employees, some firms give raises or bonuses to the best performers to retain them and send a clear message to poor performers. Performers can be paid on an individual or team basis, and paid on measurable results, goal achievement or profitability. Paying for performance does more than deliver the best financial reward to the best workers, but creates an environment that keeps employees focused on the companys bottom line. Added by:- Admin