It has been a long talk, as for the effectiveness of the Pay-for-Performance (PFP) programs for the hospitality service entities. It may be assumed, that PFP is one of the most effective presently used systems of reward in any sphere of business, not only hospitality, but this work will look at both pro's and con's of using PFP, as it appears that not always PFP can serve as the best means of motivating employees. With hospitality business being a special area of service industry, where motivation is shown not through the increase of output, but through the better quality and thus higher number of clients, it is necessary to clearly think over, how hospitality management may apply PFP notions for better performance, and how PFP is to be modified in this business sphere. Hospitality business is rapidly changing depending on the market situation and there are no stable conditions for its application to the hospitality management.
It is admitted, that PFP is no doubt one of the most important human resource functions in hospitality management, but we have here to research, whether PFP alone may work for the benefit of the hospitality enterprise, and what are the other measures to be combined with PFP application. There is also argument as for the effectiveness of PFP programs, or rather about the ways these programs are applied in the hospitality management. I would assume that PFP itself cannot serve as the only means of motivating employees and keeping the best of them. In this paper I would like to have a look at PFP statements and notions in general and as applied to hospitality management; I would also see if the literary sources used in the work give the basis for unilateral concluding that PFP is absolutely good or absolutely bad for motivating the employees. It is interesting to note, that several literary sources have already researched the subject of rewards, employee motivation and PFP as one of the best means for this motivation; but on having studied literature deeper, it has been found that this system is far from being perfect, and its success depends on the way it is applied; it appears that without clear understanding of the system it may lead to opposite results.