‘Payment by Results’ or ‘PBR’ is a payment or remuneration method used to reward workers or employees in proportion with the amount of work done or deliverables achieved. In this method, a staff member or worker or even an external service provider, such as an agent or advertising agency or a consultant, is remunerated on the basis of achievement of objectives.
For a factory worker, it may be defined as wages based on the amount of factory units produced; for a service agent, the number of customers serviced satisfactorily. Similarly, a sales person may be compensated by sales commission on the basis of number of units sold. The underlying principle behind ‘variable pay’ in most organisations is mostly based on rewarding employees according to the amount of work done by them in terms of predefined deliverables.
The same evaluation, and hence, remuneration system may be used for compensating external service providers/ agencies/ consultants also, by linking their ‘pay’ with the requisite levels of desired ‘performance’. This kind of remuneration compensation method has increasingly gained popularity in social, health and public sectors, and attracted both positive and negative publicity.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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