Performance Compensation

Performance compensation refers to the rewards and benefits employees receive based on their job performance. In a performance management system, it typically involves measuring an individual's contributions and achievements, and then linking these results to their pay, bonuses, or promotions. This approach motivates employees to excel in their roles, as they can see a direct connection between their efforts and tangible rewards. Essentially, it encourages high performance by recognizing and financially rewarding those who contribute significantly to the organization's success.