Sales representatives always have external things to look for like the amount of sales they can generate with customers. There was a change in perception. Factory is always considered as the place for working. Management as overlooking employees and employees would get payment for turning out a fixed amount as output. A customer is a king in modern arena business, and this has led to obsolete of PBR schemes. Manual workers PBR rates have been found in declining state, and this has started from way back in 83.
The quality of products is more important than quantity produced these days and there are new management concepts like finishing on time that had made individual effort being given more due. Fluctuation in earnings system has also led to change in attitude towards PBR systems.
Both parties should feel satisfied with incentive scheme in place .for that flow of operation should happen, and there would be easily available for all things needed for getting output and required an amount of quantity should also be there. These things cannot be sure of happening, and there would be chances of delay happening. This can lead to changes in wages pay, and this would force an employee to make changes to a scheme as his or her salary is not affected.
Quality of work
Output quality could get damaged if there is the only provision for output volume increasing. Assume that payment gets related to quality then also chances of having a large number of scrap. Assume that marmalade jams are being made and they are to be filled in jars. If pressure situation arises on a quest of quantity, some jars may get broken and would affect output.
Employees who meet the standards prescribed by management and who are willing to adapt to new technologies should definitely be rewarded with an incentive scheme. Organizations competing in business markets would have to face the reality that quality is important than quantity and pbr gives importance to quantity only and would be judged on the wrong side.
The quality of working life
PBR schemes can land workers in trouble. It can be demotivating work force, and they might feel pressure working in tight conditions. There would be too much emphasis on mechanized process, and there would be a specialization that can be termed as hyper.
Extreme cases have been found in which worker is related to some robot or treated just like a machine, and this type of payment would strengthen the feeling of mechanical rewarding of an employee. The employee would feel that their skills, their efforts are not properly appreciated, and these thoughts can increase stress and strain.
The selective nature of the incentive
Incentive schemes should benefit all employees, and it is a rare thing also. There are set of employees who would get incentive based on their output. This includes sections like truck drivers, tools making people like craftsmen, labor people or employee who would bring things into a construction site, people working in stores and many other sections.
There would be a method of sharing bonus or incentive from those who get it to those who would feel like getting it. Store keepers level of output would be definitely different from incentive earned by people working in the crafts section. The increase in costs like labor would make calculations complicated. People working in crafts section would feel that they are not getting rewarded.
Obscurity of payment arrangements
The employee would feel that they would need new changes and these changes would be met, and there are situations also when employees would feel confused about what behavior would bring change in a payment system. Some surveys have studied whether employees casually understood how pay is calculated and many company employees have said that they do know how pay is calculated while in reality, they do not.