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Asked by Gloria Martin-Mays on Apr 28, 2024

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What are the advantages and disadvantages of delaying payout of performance-based pay, rather than paying the reward immediately?

Payout

The process of distributing financial rewards, such as dividends or winnings.

Performance-Based Pay

A compensation system in which an employee’s financial remuneration is directly linked to their performance or productivity.

Advantages

The favorable positions or conditions gained by a person or organization that provide a better opportunity for success.

  • Assess the effects of one-time bonuses compared to continuous gradual salary raises.
  • Delve into the strategic aims of pay systems tied to employee performance in drawing, keeping, encouraging, and recompensing workers.
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Natasha ThompsonMay 01, 2024
Final Answer :
The main advantage of delaying payouts is that the company can use the money for its own purposes longer. The main disadvantage is that delayed rewards may frustrate high performers, and the motivational impact of the reward is diminished the longer it is separated in time from the desirable behavior.

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