Performance Based Pay

A well-structured incentive program can boost productivity and instill a sense of shared responsibility among employees.

An article in Inc. Magazine

“compensation is the issue that causes the most anxiety in American workplaces.”

Time served = Bigger Pay/Raisesi.e. “unionesque mentality”

“Old Model”

  “A haphazardly designed program can make a bad problem even worse. ”

Seven performance based pay best practices:

No. 1: Reward Individual Achievements

The gut-level reaction of employers launching a pay-for-performance program for the first time is to offer a company-wide incentive based on the

achievement of a shared goal, usually related to the year-end bottom line.

No. 2: Find Relevant Goals for Every Employee

We all know that sales commissions are the most ubiquitous performance incentive. Sure, motivating a sales person to hit a goal is easy, but how do you

motivate your accounting department or your receptionist to do a good job?

No. 3: Create Rewards for Teams of Workers

Individual incentives are essential, but they are only part of the solution. Adding in a few team goals mixes things up a bit. The reality is that most

businesses do best when teamwork thrives, so you want to motivate your teams to do well.

No. 4:  Communicate, Communicate, Communicate

You simply can't maintain a quality incentive program without good communication.

No. 5: Measure Results MindfullyProbably the single most important feature of incentive-based

compensation is employee empowerment.

No. 6: Empower Your Workers to Be SuccessfulProbably the single most important feature of incentive-based

compensation is employee empowerment.

No. 7: Cash Isn't Always KingYou don't want performance incentives to make your workers feel unmotivated unless there is a cash bonus attached to completing a

task.

Remember, incentive programs are not a panacea for motivational problems

in the workplace.