IntroductionPeoplePower is a company whose role is to provide manpower services to its customers operating in the tourism and hospitality industry. The company offers its services to customers who require cleaning and maintenance services and range from individual customers to commercial premises such as hotels. The company's employees have the role of cleaning customers' premises and the number of employees expected to carry out these tasks varies depending on the customers who have requested the services. The company has a total of 12 managers and directors, 70 full-time workers, 20 part-time workers and 160 casual workers. Customers pay the company 120% of what they would pay if they received the services from their own staff and the extra 20% is for convenience and reliability for the company. This document will describe the performance-based compensation system that PeoplePower would use for all employees, including management and administrative staff. Theoretical Description and Justification It is important for the management of any company to care about the performance of its employees. Past performance of employees also determines future performance, hence the need for continuous improvement in employee performance. This means that employers have the role of ensuring the performance of their employees improves and this has a strong impact on the compensation system that the company uses for all its employees. According to Sturman (2006), money is the overall incentive value that most employers offer to their employees, but it is also important to note that employees can improve their performance if management motivates them by linking pay to performance . This means… half of the paper… National performance: incentives as a moderator. Journal of Academic Research. 1 (2): 229-242 Pazy, A., & 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 Economic and Social Sciences. 3(21):20-30Sturman, M.C. (2006). Using your compensation system to improve employee performance: How you pay makes a difference. The Center for Hospitality Research. 6(13):1-12Weisbach, M. S. (2007). Optimal Executive Compensation Versus Managerial Power: A Review of Compensation Without Performance by Lucian Bebchuk and Jesse Fried: The Unfulfilled Promise of Executive Compensation. Journal of economic literature. 45:419-428