American Express has taken steps to provide employees with objectives that reward the employees with exemplarily service records. This type of compensation known as “pay for performance, ties incentives to customer satisfaction surveys” (Colquitt, LePine & Wesson, 2013). In terms of pay for performance, is this technique really any different than an annual performance review? Does compensation given at more frequent intervals promote higher motivation levels compared to an annual compensation? Many theories surrounding motivational behavior suggest that employee engagement defines the level of commitment and motivation of employees.
Pay for Performance
Employees can be rewarded in many ways for exceptional performance. Most organizations capture these results in annual performance appraisals. These appraisals are based on expected performance standards; standards of which an employer wants an employee to accomplish to meet the company 's expectations. American Express has taken a different approach and introduced pay for performance incentives, which rewards employees every few weeks. This technique has advantages as it keeps performance expectations in the forefront and allows employees to continually focus on their objectives. When compared to annual reviews, where objectives may be overlooked until just before the due date, these more frequent rewards offer continual reinforcement of desired behavior. The textbook states, this strategy has “given the company’s customer service agents more control and purpose in their jobs” (Colquitt, et al., 2013).
Whereas some experts argue that this type of program only serves to objectify the employees. Author Allan coincides and states, “A key shortc...
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... first be satisfied in order to provide the framework for further motivation and empowerment. The pay for performance strategy used by American Express encompasses many of the motivational theories represented above. Most importantly, the expectancy theory, as this theory recognizes that employee behavior is directed toward a goal that is both desirable and achievable.
Pay for Performance is a masterful technique used by employers that realize rewarding employees for desirable behavior is the best way to achieve results. Since employees are compensated based on performance, they may be more likely to work harder and longer in order to reach income goals. Used in the right environment, this strategy improves performance for both the employee and the company by aligning rewards with employee performance creating a stronger, more productive workforce.
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