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Why Performance-related Pay…Isn’t


Andrew MacLennan
Strategy Execution Ltd MD


HR Network (Scotland)


May 2007

Performance-related pay is widely assumed to be an essential mechanism for ensuring that good performance is rewarded and poor performance is not. In many sectors, it has become normal to seek to motivate employees through offering variable remuneration, tied to performance assessments.

Andrew MacLennan looks at the hard evidence – and in some cases lack of it – behind this management tool. He highlights the risks poorly constructed PRP systems can cause effective strategy execution.

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