ABSTRACT
Generally, pay-for-performance is an intricate part of the industrial revolution wherein workers' wages were linked explicitly to the production of specific quantities of a product (piecework). Merit step increases, even in systems that are primarily across-the-board longevity awards, are today often modified by the requirement that an employee obtain a minimum performance rating in order to be eligible. The bonus is a lump-sum payment. Its advantage is that it recognizes exceptional performance occurring during the year without entailing a commitment to continuous future payments. Skill- and competency-based pay rewards employees more for organizational potential than for actual performance. In a way it is an expanded variation of "on-call" pay. Payout pools should link together an identifiable "community of interest". Employees must see the people in their pool as being part of a team. The distribution of gain sharing or goal sharing rewards can be across the board.
