Written By: Ehsan Jahandarpour

Performance-related pay or pay for performance is money paid relating to how well one works. Car salesmen or production line workers, for example, may be paid in this way, or through commission. Many employers use this standards-based system for evaluating employees and for setting salaries. Standards-based methods have been in de facto use for centuries among commission-based sales staff: they receive more pay for selling more, and low performers do not earn enough to make keeping the job worthwhile even if they manage to keep the job.