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Journal : Master Manajemen

Kompensasi Berbasis Kinerja: Solusi pada Promosi dan Dinamika Kompetisi Internal Perusahaan Ruslaini Ruslaini; Grace Yulianti; Sri Utami Nurhasanah
Master Manajemen Vol. 2 No. 2 (2024): Master Manajemen
Publisher : Fakultas Ekonomi & Bisnis, Universitas Nusa Nipa

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.59603/masman.v2i2.684

Abstract

This study examines the challenges in applying contract theory, particularly regarding firm performance-based pay as a solution to promotion risk in a competitive environment. Performance-based compensation aims to enhance employee motivation and reduce promotion uncertainty, but it can also lead to unhealthy competition and undermine team collaboration. This study suggests that a balanced incentive contract design, which combines financial and non-financial rewards, can optimize individual performance without sacrificing team harmony. While performance-based pay can offer short-term benefits, it is important for companies to consider its long-term impact on employee satisfaction and collaboration within the organization. This research provides theoretical and practical insights for firms in designing fair and effective promotion systems.