The significance of performance based pay and incentive pay

The most common form of performance pay is a non-fixed economic remuneration, which has certain functions of incentive and constraint.

Performance-based pay is heavily constrained. The essence of performance pay is the "post value deposit", that is, the enterprise divides the salary level of the corresponding position of the employee into two parts when the person and post are not completely matched, one part is fixed and the other part is adjusted according to the performance. Generally, in state-owned enterprises with a low degree of matching between people and jobs, performance-based wages account for a larger share; In foreign-funded enterprises with standardized personnel appointments and a high degree of matching between personnel and posts, the proportion of performance-based wages is relatively low.

Performance-based pay is paid according to the performance of employees, and there is a certain range of range, which is not a problem of whether there is a problem, but a question of more and less.

Performance-based pay is part of the return on the value of the position, and it is necessary to refer more to the external market. For example, for technical positions, the common practice in the external market is a fixed salary plus project bonuses. If a part of the fixed salary of technical personnel is floated and paid after monthly or quarterly evaluation, it will inevitably weaken the attractiveness of outstanding talents in the external market.

Incentive salary is to affect the future behavior of employees in the way of paying wages, which is the part linked to the future performance of employees, and is a recognition of past work behavior and performance. It is determined at the time of actual performance achievement, and the effect of influencing the future behavior of employees is achieved through the payment of wages. The incentive effect of the reward set up for the over-completion of the work part is not achieved by the performance pay.

Performance-based pay and incentive pay are two different salary systems, and their significance is as follows:

Performance-based pay: Performance-based pay is a wage system that determines the level of wages based on an employee's work performance and performance. The significance of performance-based pay is to motivate employees to work harder, improve the quality and efficiency of work, and thus improve the productivity and efficiency of the enterprise.

Incentive Salary: Incentive pay is a wage system that determines the level of wages based on the work goals and performance of employees. The significance of incentive salary is to stimulate the enthusiasm and creativity of employees, promote employees to achieve the common goals of individuals and enterprises, and improve work performance and enterprise competitiveness.

The significance of both wage systems is to motivate employees to work harder, improve work performance and the efficiency of the enterprise. However, performance-based pay focuses more on employees' work performance and results, while incentive pay focuses more on employees' work goals and motivations. Enterprises can choose a suitable wage system according to their own situation and employees' needs to achieve the best incentive effect.

Performance appraisal: is a verb that refers to the process of appraising performance. It usually includes the whole process of setting goals at the beginning of the semester, mid-term performance coaching, final appraisal and scoring, and carrying out performance improvement.

Incentive: It is both a noun and a verb, referring to a kind of reward and bonus, the purpose of which is to guide employees to carry out a certain activity and achieve a certain result. Incentives can be specific to employee performance or to other behaviors or outcomes.

Comparatively speaking, the scope of incentives is wider, and performance appraisal is also a way to motivate.

The employer shall, in accordance with the provisions of the labor contract and the provisions of the state, pay the labor remuneration to the employee in full and in a timely manner, and shall not arbitrarily deduct the performance salary due to the employee, and the salary shall be paid to the employee on a monthly basis in the form of goods-type currency.

1. How to calculate the salary at the time of resignation.

The employer shall pay the employee's wages in a lump sum when the labor contract is terminated or terminated. The salary of normal resignation shall be calculated according to the number of days of attendance of the monthly salary after excluding the holidays stipulated by the state, and then calculated according to the actual number of days of attendance. Article 9 of the Interim Provisions on Payment of Wages stipulates that when both parties to an employment relationship dissolve or terminate a labor contract in accordance with the law, the employer shall pay the employee's wages in full at the time of dissolution or termination.

Article 50 of the Labour Law stipulates that wages shall be paid to the worker himself on a monthly basis in the form of money. Wages shall not be deducted or unjustifiably delayed.

2. What kind of behavior is in arrears of wages?

It is illegal to pay back wages. Wages shall be paid to the worker in monetary form on a monthly basis. Wages shall not be deducted or unjustifiably delayed.

According to the Labor Contract Law of the People's Republic of China, if an employer falls under any of the following circumstances, the labor administrative department shall order it to pay labor remuneration, overtime pay or economic compensation within a time limit; If the labor remuneration is lower than the local minimum wage standard, the difference shall be paid; If the employer fails to pay within the time limit, the employer shall be ordered to pay additional compensation to the employee at the rate of not less than 50% but not more than 100% of the amount payable: (1) Failing to pay the employee's labor remuneration in full and in a timely manner in accordance with the provisions of the labor contract or the provisions of the state; (2) Paying wages to workers lower than the local minimum wage standard; (3) Arrange overtime work without paying overtime pay; (4) Dissolving or terminating a labor contract without paying economic compensation to the worker in accordance with these Regulations.

Article 4 of the Provisions on the Composition of Total Wages states that total wages are composed of the following six parts: (1) hourly wages; (2) Piece-rate wages; (3) bonuses; (4) allowances and subsidies; (5) Overtime wages; (6) Wages paid under special circumstances.

The role of performance-based pay:

Achieve goals: Performance appraisal is essentially a process management, not just a review of results. It is a process of decomposing medium and long-term goals into annual, quarterly, and monthly indicators, and constantly urging employees to achieve and complete them.

Mining problems: performance appraisal is a continuous planning, implementation, correction of the PDCA cycle process, embodied in the entire performance management process, including performance goal setting, performance requirements to achieve, performance implementation and revision, performance interview, performance improvement, and then the development of boring goals of the cycle, which is also a continuous process of finding problems and improving problems.

Distribution of benefits: It is meaningless to evaluate the benefits of not being happy, and the salary of employees will generally be divided into two parts: fixed salary and performance salary.

The distribution of performance pay is closely related to the performance appraisal score of employees, so when it comes to appraisal, the first reaction of employees is often the payment of performance pay.

Promote growth: The ultimate purpose of performance appraisal is not simply to distribute the benefits of Chonghuiwan, but to promote the common growth of enterprises and employees. Through the assessment, problems are found, problems are improved, gaps are found for improvement, and finally a win-win situation is achieved.