ajcjobs > BlogBreak > Archives > 2006 > December > 06
Wednesday, December 6, 2006
Pay for Performance practices
The Atlanta Journal-Constitution
Pay-for-performance concepts were undoubtedly created by a consultant. There was a corporate executive who most likely felt this was an excellent process to improve individual performance and reward the A-Players, a term used in HR compensation circles. I would speculate the program was successful and fit the individuals and that particular organization.
The problem is, there is no one solution that fits all and CEO’s and other executives demand implementing these programs without ensuring the program is right for the culture of the organization and right for the individual performers.
Now I am not an advocate that everyone gets paid the same, regardless of their level of contribution. This only fosters an entitlement program and businesses that adopt this type of philosophy will not be able to compete as time goes on. You can look at the steel and auto industry if you need a reality check.
A few best practices for a pay-for-performance program are:
- Nothing should be forever and the program should be reevaluated on a annual basis
- Make sure the employee thoroughly understands how the program works
- Ensure the goals are realistic and not overly optimistic
- Ensure the employee understands how they can actually reach the goals
- Don’t change the reward in the mid-stream if the economy improves or the product takes off
As an employer, have you helped implement a program like this? Has it been successful?
Or as a employee, do you find this practice useful?
