The effectiveness of the performance pay process is closely linked to the effectiveness of the performance management process.

Question

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The performance pay process involves linking an employee's pay to their performance, which is measured through the performance management process. The effectiveness of the performance management process directly affects the accuracy and fairness of performance assessments, which in turn affects the fairness and effectiveness of performance pay. Therefore, the effectiveness of the two processes is closely linked.

The Effectiveness of the Performance Pay Process Is Closely Linked