Pay for performance is not the answer for every company

REWARDING PERFORMANCE

Pay for performance is not the answer for every company

There’ s little doubt that the trend towards forging a closer link between pay and performance has become increasingly prevalent in the UK, and not just for the upper echelons of management. But does pay for performance really work? A study by Workforce magazine offers some answers.

Even the most committed supporters of performance-related pay acknowledge that it is phenomenally difficult to manage well. In short, it has to be planned, designed and operated with great care.

Certainly, as Workforce observes, it is not appropriate for all organisations. Here’ s how to judge if pay for performance is right for your organisation:

What makes it work?	When does it fall short?
When it is measurable and objective	When it pits employees against each other
When it is designed for whole-company success	When it pushes one outcome to the detriment of others
When employees have a sizeable stake in the action	When it is too subjective
When the whole organisation is involved	When it is so subjective that it opens the company to allegations of bias
When there are clear expectations
When there is a commitment to training and support

Source: Can pay for performance really work , by Janet Wiscombe, Workforce, August 2001.

Want to know more?

Title: Can pay for performance really work , by Janet Wiscombe, Workforce, August 2001.

Availability: Workforce is published monthly by ACC Communications Inc, 245 Fischer Avenue B-2, Costa Mesa, California CA 92626, USA. For subscription services, tel: 001 303 604 1464 (USA 800 444 6485). Or email the online editor Todd Raphael for more information . . . raphaelt@workforce.com.

Take a look at the article online — see what you think . . .

www.workforce.com/feature/00/07/86

Posted 24 August 2001