Why is the performance related pay not suitable for every company?

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Even where empirical research has identified the benefits of performance related pay, it is clear that reward schemes are not suitable for every type of company and performance related pay cannot, on its own, bring about change within the company. However, it can encourage employees to focus on quantity rather than quality and focus narrowly on a task.  For example, Pfeffer (1998) states that performance-related pay focuses on individual contribution whereas the task may require a team effort and for employees to work together. Furthermore, it can lead to short-termism, meaning that employees are exclusively...
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