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  • Category: Miscellaneous

    Is pay based on results better than a fixed pay?

    For an employee, the job assures him or her a known fixed amount by the end of the month. The employer has to take the effort to ensure that the employees work to the expected standards. In many sectors, the commitment, efficiency, and accountability is variable and does not impact the take-home money.

    Would the employees work better if they were to be offered a result based pay rather than a fixed amount? In such a system, the employer need not religiously supervise the staff. For a better salary, we would be putting in our effort fully knowing that the pay would be much better.

    Can a salary(or part of it) based on results be better than a fixed salary?
  • #625840
    I feel salary based on results is not a good idea. If a salary is based on results, then there are chances that employer might pay you less stating you were not up to the mark in performance in spite of you giving you full efforts. If there is a fixed salary and variable pay is given as a performances bonus based on performance then every employee will definitely put their efforts to gain those extra bucks. So I feel fixed salary is always better and we will also have a clear picture of how much we earn and how to plan on savings.

  • #625844
    At the time of the employment and appointment itself it is expressly agreed by both the boss and the worker on the salary and even a undertaking is signed. That means without even knowing the real potential of the employee the employer takes risk of appointment and fix the salary forthwith just on seeing the experience and certificates. Now that hope and trust should not be budged by the employee and he or she must prove the mantle. If the employee proves more than expected, surely more responsibilities are entrusted and that is the indication that the boss was satisfied with the work and thus gives series of other work. But the new employee thinks otherwise and speaks about volume of work increase and start fight for more salaries and thus irks the boss. This is the happening in every company. Salary must commensurate with the work done.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #625853
    Yes for the company and society. No for the employee himself.
    Humans cannot perform well everytime. It is only natural to mess things up. Usually this mess doesn't show up on their pay check, but what if it does? There will be a sudden uprising. People will go nuts, claiming all the good they've done or blaming other employees for their infidelity.
    And for the company too, to check everyone's track record is a bit of a difficult task. Keeping track of regularity and projects submitted are easy. But you cannot actually measure a work.
    Some jobs require less skills. Less time. Others require immense patience.

    All these factors considered, I'd say though such attempt would increase the productivity, it is not yet feasible with our mentality and resources. Maybe in future when jobs are different and easily measurable we might apply a method like this.

    The stronger a light shines the darker are the shadows around it.

  • #625998
    There is a concept in manufacturing sector especially with the shop floor workers and supervisors a payment related to their output. A minimum salary will be guaranteed by the employer. A minimum output will be guaranteed by the employee on the daily basis. If the production is more than the minimum assured the employer will pay them an incentive as agreed. If the output is less than the minimum assured the employee will lose proportionately as per the agreed method. So this system works well and the production will be more than required and you can go for more sales than the commitment. This system was in force in many organisations. In many IT companies also there is the system of performance bonus which may or may not be paid and the payment of this portion will be dependent of the performance of the individual and the performance of the company. These are already in existence in some companies. In the manufacturing industry also for management staff, there is a system called performance bonus which purely depends on the individual performance and company performance.
    drrao
    always confident

  • #626096
    This is a very interesting thread raised by the author. Actually, salary based on output or result is a good idea but for this those who are supervising or at the administratively higher places should be able to judge this objectively.

    In most of the cases, the judgement of higher-ups may not be in proportion to the actual output delivered by the employees. Over and above there are always some biases which will make the judgements erratic.

    As the author has also indicated in his thread, the better way is to have a fixed salary and above that a variable salary which only should be affected by performance parameters.

    These things are to be applied in real life conditions and results are to be seen before going for a permanent change in salary structure.

    Knowledge is power.


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