The effects of performance based compensation on employee performance

Performance-based compensation system has been popular in recent years. The performance-based compensation system attracts the attention of companies due to the expectation that it will increase the efficiency of work and employees. This study examines the performance, compensation systems, performance evaluation and performance based compensation systems. The subject of the study is the evaluation of the effects of performance based compensation systems on the employees. In this study, we examine how healthy this system is, and analyze the advantages and disadvantages. The employees of the firms, which operate in service, manufacturing and trading sectors and apply the performance-based compensation system, were surveyed. In this context, a questionnaire was responded by a sample of employees in Adana province. According to the results, we found that there is not a significant relationship between performance based compensation and employee performance.