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Essay text:
Its key aim is to motivate employees and improve firm performance and productivity.
Reasons for using performance-related pay (PRP)?
• Improve productivity and firm performance
• Improve motivation
• PRP give great power to managers and reduce trade union influence.
• A way to distinguish the good performer from the bad and to reward them accordingly.
• Attracting and retaining good performers
However, those benefits of PRP seems difficult to achieve and idealistic. There are some problems related to PRP:
1) There is much doubt about whether performance-related pay actually does anything to do with performance...
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