Case Study: Contingent pay at The Harding Trust
Introduction
In this essay, I shall make my evaluation on whether Performance Related Pay (PRP) should be introduced to The Harding Trust (THT). The theoretical ideology of PRP will be looked at, as well as the practical implications of the scheme. Factors of great importance, that may well determine the impact of PRP on THT, will also be examined. Through my evaluation, I shall place a significant focus on advantages and disadvantages of PRP as well as how they could affect THT. I will pay special attention to the impact that PRP could make on employee performance and the overall organization. All arguments and facts will be presented from organizational point of view as well as from …show more content…

Kelly, Aisling (1996) argues that it is not sufficient to have a PRP scheme working individually. ‘’ PRP schemes will be most effective when they are implemented as part of a wider performance management strategy ‘’ (reference 9). This concept brings forward the idea of an existing functional relationship between the organizational reward system and its’ Performance management system. Following the case of HTT, we can already track evidence of performance appraisals (PA) being introduced. However, there is no clear connection made between PA and THT’s reward system.
Professors Mridul Maheshwari and Manjari Singh argue that readiness ‘’ Besides readiness in terms of various systems in the organization, also includes the psychological preparedness of employees’’ (reference 2). In the case of HTT, introducing PRP would involve a big shift from the current reward system. This change has the potential to make employees question their jobs security and overall psychological contract with the company.
Conclusion
The aim of HTT is clearly to improve output and in this way gain advantage over its’ competitors. PRP seems to be the clear choice to do that as it links reward directly to employee performance hence serving the organization as a powerful