You get what you bonus!
Pay for Performance - it is what we all say we want (in good economic times - and assuming we think of ourselves as great performers) and it appears to be what companies, more and more often, want to provide.
The 'Rock and the Hard Place'Companies are feeling the pinch - suppliers are wanting more for all raw materials/inputs and customers are not willing to accept a price increase. Employers are starting to get concerned about possible employee turnover as the economy slowly improves. Employee engagement surveys are giving mixed messages - and being scrutinized more carefully. So - how do you reward employees in a way that will keep and motivate them?
I will do what you pay me to do.When I look at resumes, I look for accomplishments. (Too many resumes are lists of responsibilities . . . . . yet employers want to know about your results.) People seem to accomplish (1) what they enjoy doing and (2) what they are being incented through variable pay to do.
Outcomes and ValuePritchett, a consulting, training and development consulting company, put out a list of the 13 Ground Rules for Job Success in the Information Age a few years ago. Rule number eight is Add Value which is defined as making sure you contribute more than you cost.
And the studies say . . . . . .
- Employers are more optimistic about their business and the overall economy now than they were in 2009.
- Regardless of this cautious optimism, most companies plan to keep their salary programs flat for this year (2010).
- Retaining key employees and attracting quality workers are consistently ranked as top priorities for all organizations (and mentioned in compensation plans) for 2010.
There is no perfect answerThe surveys done at the end of 2009 and early 2010 all point to increasing use of variable pay (performance and/or spot bonuses).
- Make sure you balance organizational needs with individual or team performance bonuses; think about what organization-wide metrics need to be met before individual payments are made.
- Consider spot bonuses in addition to OR instead of set performance bonuses.
- There are only so many priorities that can be a focus. Determine the top three areas (at most) that need the most attention. Build individual, team or organization-wide incentives around them.