Subject: Business and Management
Language: English (U.S.)
Pages: 1
1.Performance Standards Describe the relevance of performance standards for today's knowledge-directed workers, and how their use will result in a more competitive compensation and benefit strategy. 2.Performance Incentives Compare and contrast when it would be preferable to motivate employee performance through short-term incentives versus long-term incentives, and vice-versa.

Performance Standards and Incentives

Performance Standards

Performance standards are essential for workers and create a more competitive and robust compensation and benefit strategy. Performance standards ensure that the knowledge-based employees know what is expected of them for each major duty they are assigned. The standards are similar to a benchmark that detail how the job should be done and the expected output so that the effort applied is deemed satisfactory. The standards provide clarity so that there is no confusion on what every individual is expected to do (Cunningham, 2002). The performance standards go hand in hand with performance appraisals. These appraisals make sure that the performance standards that the company sets for its employees are realistic. Performance standards ensure that the employees remain competitive and that the company sets a competitive compensation and benefit plan for their employees.

Performance Incentives

Incentives are motivational tools utilized by companies to make the employees become more productive. The incentives are usually carried out according to the long term and short-term goals of the company. Short-term incentives are used to increase productivity for the company for the short-term. They are used to encourage the employees to reach the short-term targets of the company. Income-statement performance measures are typical of short-term incentive plans. Long-term incentives are used to increase productivity for the company for the long-term. They are used to foster commitment to the company in the long run and to decrease employee turnover for the long-term (Miller, 2015). The market-based metrics are the factors used in planning for the long term incentives. The metrics used include the return on assets and total shareholder return. The short-term and long-term incentive plans need to complement each other and need to be in line with the organization’s short and long-term goals.   


Cunningham, S. (2002, Sept. 16th). Attracting and retaining employees in a competitive world. Retrieved on 29/11/2015 from

Miller, S. (2015, March 12th). Incentive pay metrics: the long and the short of it. Retrieved on 29/11/2015 from