Which of the following is the most important potential disadvantage of performance pay?
A) It increases the need for layoffs in poor economic conditions.
B) It does not fit well with high-involvement management.
C) It is mainly effective in small companies.
D) It does not pay off for some employers.

Question

Quizplus · Accepted Answer

Performance pay may not pay off for employers if it is not effectively designed and implemented. If the criteria for measuring performance are not clearly defined or employees do not perceive the process as fair, it may not motivate them to improve their performance or may lead to frustration and decrease overall morale. This can ultimately result in a waste of resources and budget allocated for performance pay.

Which of the Following Is the Most Important Potential Disadvantage