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Performance-based pay as a motivational tool for achieving public sector organizational performance

Author: 
Dr. Rahul Sharma and 2Rupali Soni
Subject Area: 
Social Sciences and Humanities
Abstract: 

The issue of employee’s performance in furtherance of organization objectives has occupied manager’s attention for long. Difference in levels of performance has been attributed to differences in skills and abilities on the one hand, and to different theories of money on the other. This study examined the issue of performance based pay as a motivational tool for achieving organizational performance, using the situation in public sector organization. The main objectives of the study was to assess the impact of performance related pay on the motivation of employees and, subsequently, on the achievement of organization goals. In all, one hundred respondents took part in the survey. The main research instrument was the questionnaire. The result of the study revealed that the effect of performance based pay on employee’s performance is minimal, and the motivational effect of merit pay is often blunted by biased performance appraisal. The main limitation of the study is that it could not cover all the state bank of India in Raipur within the target population, due to time and financial constraints. In this respect, the interpretation of the results of the study should not be over generalized.

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