Comparison Of Pay Systems Linked To Individual And Collective Performance: Literature Review and Future Perspectives

Yuhan Chen

doi:10.54097/be5hnt87

Authors

Yuhan Chen

DOI:

https://doi.org/10.54097/be5hnt87

Keywords:

Pay for performance; Collective incentives; Organizational performance; Individual performance.

Abstract

The key to optimize resource allocation in enterprises is the management of compensation and performance. With the arrival of the digital economy, different industries have optimized and innovated human resource management to varying degrees, and compensation and performance are directly linked to employee work results. The debate on whether performance-related pay can improve organizational performance has been focused on individual performance-based pay systems, which generate differential incentives for individual performance through different pay systems. In this paper, a comparative study is conducted with collective performance-based pay systems (e.g., team bonuses and profit sharing) through a systematic literature review approach. On this basis, this review contributes to our understanding of categorization effects and free-riding under collective performance-based pay systems and whether financial incentives undermine intrinsic motivation.

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