IntroductionPeoplePower is a company whose role is to provide manpower services to its clients operating in the tourism and hospitality sector. The company offers its services to customers who require cleaning and maintenance services, from private individuals to business premises such as hotels. Company employees have the role of cleaning customer premises, and the number of employees expected to perform these tasks varies depending on the customers who have requested the services. The company has a total of 12 management and administrative staff, 70 full-time workers, 20 part-time workers and 160 casual workers. Customers pay the company 120 percent of what they would pay if they benefited from the services of their staff and the additional 20 percent is for the company's convenience and reliability. This article will describe the performance-based compensation system that PeoplePower would use for all employees, including management and administrative staff. Theoretical Description and Rationale It is important for the management of any company to be concerned about the performance of its employees. Past employee performance also determines future performance, hence the need for continuous improvement in employee performance. This means that employers have a role in ensuring that their employees' performance is improved, which has a huge impact on the compensation system that the company uses for all of its employees. According to Sturman (2006), money is the overall incentive value that most employers give to their employees, but it is also important to note that employees can improve their performance if management motivates them by tying pay to performance. This means... middle of document ...... National performance: incentives as moderator. Journal of Academic Research. 1 (2): 229-242 Pazy, A. and Ganzach, Y. (2006). Pay contingency and the effects of perceived organizational and supervisor support on performance and commitment. Journal of Management. Resurreccion, P.F. (2012). Performance management and compensation as drivers of organizational competitiveness: the Philippine perspective. International Journal of Business and Social Sciences. 3 (21): 20-30 Sturman, M. C. (2006). Using your payroll system to improve employee performance: How you pay makes the difference. The Hotel Research Center. 6 (13): 1-12 Weisbach, MS (2007). Optimal Executive Compensation Versus Managerial Power: An Examination of Compensation Without Performance by Lucian Bebchuk and Jesse Fried: The Broken Promise of Executive Compensation. Review of economic literature. 45:419-428