4. Performance-related pay
Some employers use 'performance-related' pay to encourage and reward good performance at work.
Examples of performance-related pay include:
- annual pay rises linked to individual performance
- commission
- bonuses for meeting certain targets or objectives
Making fair decisions
Employers should be careful with how they use performance-related pay. The process for deciding who gets a pay rise should be fair and objective.
Employers must avoid treating people 'less favourably' because of a protected characteristic. This could be discrimination.
If it isn't used in a fair way, performance-related pay can have an impact on working relationships.
If workers do not think it's being used fairly, there's a risk that they will be:
- less motivated
- dissatisfied at work
- more likely to leave
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