Performance related pay

This refers to an approach to employee remuneration which links the level of reward to the achievement of specific targets.

Performance related pay (PRP) may be applied to some or all of the remuneration package, from a sales person working on a commission only basis to an employee who gets a bonus on top of their base salary. Good PRP arrangements provide a clear linkage between the rewards for individuals (or teams) and their impact on the achievement of the organisation’s targets.

PRP is a term normally found in performance management and financial management.

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