A Willis Towers Watson study found that only 20% of North American employers believe pay based on merit improves performance. It might seem like a simple and direct way to motivate and retain top-performing employees, especially with bonuses based on performance, but it’s actually not as simple as it looks.
With the end of the fiscal year approaching, companies now have the opportunity to review their performance at organizational, departmental and personnel level. The employees are, perhaps, the most important resource of an organization, as they can influence the company’s results to a large extent.
Before 2012, the Philippines Government rewarded employees from the board uniformily, regardless of their performance. In time, this approach proved to be limited in terms of motivating employees and stimulating progress. Therefore, an initiative to promote a performance and result oriented culture was implemented – The Performance Based Incetitives System (PBIS).
The compensation of the top executives represents an important aspect of administrative science, as it links together aspects that relate to corporate governance, human capital, organizational culture and performance management. Ideally, the executive remuneration philosophy of the organization should ensure that the remuneration properly reflects the duties and responsibilities of its executives and that remuneration is competitive in attracting, motivating and retaining people of the highest caliber.