Re-evaluating the Relevance of Service Related Pay in a 21st Century Context

Abstract

The aim of this paper is to critically evaluate the notion of ‘Service Related Pay' (SRP) as one facet of the overarching contingent pay structure, by examining the benefits, shortfalls and issues pertaining to equity in the use of SRP in 21^st century organisations. This paper examined theoretical perspectives underpinning the notion of Service Related Pay, it is based on the review of existing literature on service related pay within organisations in different countries. It also examined the implications of service related pay, paying particular attention as to how alternative forms of contingent pay, such as performance based pay can overcome the tensions highlighted and concludes by discussing the advantages and implications of performance related pay as a workable solution to the shortfalls in utilising service related pay(SRP) as a reward management strategy.

This paper is relevant because majority of service related pay studies that have been conducted within developed and developing countries authenticate the operational issues of successfully introducing major pay reforms and suggest somewhat limited effectiveness. It is hoped that the outcome of this paper will provide relevant and valuable lessons for reward policy-makers in both developed and developing countries as they implement reward reforms within their organisations.