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performance-based compensationpaying employees on

Performance-Based Compensation

Paying employees on the basis of performance measurement. Instead of paying a person for time on the job, pay reflects productivity, performance and quality, or some other aspect of the job that can be effectively measured. Effectiveness of performance-based compensation based, as theorists suggest, on 2 main factors:

(1) is the performance within the employee's control?

(2) Is the compensation valued?

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