Performance-based Pay Structures

Performance-based pay structures are compensation systems where employees earn varying levels of pay based on their job performance. Instead of paying a fixed salary, companies offer bonuses or higher wages to those who meet or exceed specific goals or targets. This approach aims to motivate employees to work harder and be more productive, aligning their efforts with the organization's success. It can take many forms, such as commissions for sales staff or bonuses for meeting project deadlines, encouraging a direct link between an employee's contributions and their financial rewards.