Many of you will be fully engaged in your annual performance review and pay decision cycles. So you may wish to look away now. Despite embracing the concept of pay for performance, a surprisingly large number of North American employers reckon their programmes aren’t doing what they are designed to do – drive and reward individual performance. That’s the main finding from a survey by Willis Towers Watson.
Laura Sejen, global practice leader, Rewards at Willis Towers Watson, said:
‘Employers continue to make significant investments of time and money in their traditional pay-for-performance programmes, primarily annual merit pay increases and annual incentives. Unfortunately, these reward programmes are falling short in the eyes of many employers. It appears that organisations are either trapped in a business-as-usual approach or suffer from a me-too mentality when it comes to their programmes.’
Sejen said:
‘Pay-for-performance programmes, when designed and implemented effectively, are great tools to drive performance, and recognise and reward employees. However, conventional thinking on pay for performance is no longer appropriate. Companies need to define what performance means for their organisation and how managers can ensure they are driving the right performance, and re-evaluate the objectives of their reward programmes to ensure they are aligned with that definition.’