The objective of the thesis is to evaluate a Performance-related Pay (PRP) scheme operating within a multi-divisional food manufacturing company and to identify the factors contributing to the successful operation of PRP schemes in general. An extensive review of the relevant literature is followed by an in-depth analysis of the PRP scheme. The research involved a combination of both quantitative and qualitative techniques. Semi-structured interviews were conducted with the HR director of the organisation who was involved in the design, implementation and administration of the scheme. A survey was then carried out involving 107 managers who were assessed according to the PRP scheme and this was followed by interviews with 16 of these managers. Further interviews took place with two HR directors from other organisations and a trade union official. The thesis addresses the issues of PRP as an effective means of motivating staff and the difficulties involved in successfully implementing such schemes, particularly in the context of a multi-divisional organisation. The thesis also considers the wider context in which PRP operates, and the mechanisms required for continued effectiveness. The findings suggest that PRP schemes will be most effective when they are implemented as part of a wider performance management strategy incorporating supporting initiatives. Factors instrumental to an effective scheme include joint consultation in setting objectives, regular feedback on objectives, utilising objective measures of performance, the implementation of an appeals forum and observing the requirements of expectancy, goal-setting and equity theories.