A pay-for-performance plan is advantageous because it provides a method of positive reinforcement, which directly links an employee’s compensation to their performance. This system incentivizes employees to achieve high performance by rewarding them with financial bonuses or raises based on their achievements. Positive reinforcement encourages desirable behaviors and high productivity, aligning individual performance with organizational goals.
References
Managing Human Capital Textbook
"Pay for Performance: Evaluating Performance Appraisal and Merit Pay" by George T. Milkovich and Alexandra K. Wigdor
SHRM (Society for Human Resource Management) guidelines on pay-for-performance plans
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