The performance-based approach assumes that rewards should be based on what?

The performance-based approach to compensation emphasizes that employee rewards should be directly tied to their individual results and achievements. This approach operates on the premise that when employees are rewarded based on their performance, it motivates them to enhance their productivity and contribute meaningfully to the organization’s goals.

By using results as the basis for rewards, organizations can recognize high performers, incentivizing them to maintain or improve their performance levels. This creates a culture of accountability and encourages a meritocratic environment where employees feel their efforts are valued and rewarded appropriately.

Other aspects such as longevity, job responsibilities, and team collaboration, while important in their own rights, do not align with the core principle of the performance-based approach, which specifically prioritizes individual outcomes as the basis for rewards. This distinction is crucial for organizations aiming to foster a high-performance culture.