Article 5.1. Evaluating form and functionality of pay-for-performance plans: the relative incentive and sorting of merit pay, bonusses, and long-term incentives (Park & Sturman, 2016)

Question 1

PFP =

+ forms + effects

Answer 1

Pay-for-performance. 
Forms: 
- Performance metric. 
- Type of award. 
Most common: merit pays, individual-based bonusses, and long-term incentives. 

Effects:

• Incentive effects: influence on motivation.
• Sorting effects: influence on workforce (attracting, retaining, and leaving employees).