Problem:
Compensation allows organizations to remain competitive within the marketplace. It also allows employees to be competitive within the organization. In order for an organization to retain top-tier-high-quality performers the compensation must be adequate for the specific task or project. Compensation is a motivator that encourages advanced levels in productivity. For an organization to succeed, compensation must be applied strategically according to the organization's mission, vision and goals. From an employee perspective, motivation is the driving force of receiving quality performance and productivity levels. If an organization desires to see increased revenue, increased clientele and maximization of shareholder wealth then the employer must entice (give them a motive to do something) the employee to complete the task.
For example, several years ago when I worked for a marketing firm, our success as an employee depended upon the type of numbers and clients we were brining in. We had to meet a quota everyday, the top salesman/woman would either receive a cash bonus for being the top seller, lunch with the CEO or a large bonus at the end of the pay period. This form of compensation created a competitive atmosphere in which case all employees were trying to out-perform everyone else. This same method also applies to creditors.