Risks of the Performance and Compensation Management System in IT Companies

Abstract

The article analyzes the risks arising in the process of designing and functioning of performance management and compensation systems in IT companies. The impact of organizational, human resource, technological, and project-related factors on the effectiveness of employee performance evaluation, the objectivity of managerial decisions, and the fairness of motivational mechanisms is examined. Particular attention is paid to the specific features of the IT industry, including the high dynamism of the project environment, rapid changes in competency requirements, and the strong dependence of team performance on the quality of communication.

The study substantiates the relationship between the quality of the performance management system, the level of transparency of compensation policies, and the risks of declining productivity, employee demotivation, and increased staff turnover. It is shown that imperfections in evaluation procedures may lead to managerial subjectivity, information asymmetry, and deterioration of the socio-psychological climate within teams.

The scientific novelty of the study lies in the systematic identification and generalization of risks associated with performance management and compensation systems in IT companies, taking into account industry-specific characteristics and their impact on the sustainability of HR processes.

The article proposes recommendations for improving performance evaluation approaches and developing flexible compensation strategies aimed at minimizing HR risks and enhancing the effectiveness of personnel management.