Description
Pay for performance is a compensation model used as part of a wider continuous performance management initiative.
The basic idea is that you pay employees based on how well they perform their duties. You do this by setting performance goals for each employee and paying them a bonus when they reach or exceed their objectives. This might be in the form of merit pay or one of a variety of variable pay programs.
Some view the pay for performance model as a fairer approach to employee salaries. With a more traditional compensation method, all employees at the same level are paid the same amount, regardless of whether they under or over-perform. There’s no real incentive to try harder. In contrast, with a pay for performance program, you motivate your employees to perform to the best of their abilities and strive for continuous improvement by offering them tangible rewards. Many argue that it can encourage engagement and boost top talent retention.
Learning Objectives:-
Pay for Performance Model
Definition
How it works
Model types – Merit Pay or Variable Pay
Pros and Cons
Bottom Line
Performance Management
Definition
Possible Issues
Models – Mgmt by Objective or 360 Degree Feedback
PM Processes
PM Cycle example
Continuous PM
Definitions of terminology used. EXAMPLES AVAILABLE by email request!.
Why Should You Attend?
The pay for performance model and processes you implement will depend on a range of factors. To work out which model works best for you, you need to consider your organization’s budget, compensation philosophy, and organizational goals. What are you hoping to achieve? How often will you reward employees? Do you have an established budget? Which performance-based pay plans would work best in your organization?
Ultimately, the way pay for performance works will depend on your employee performance management system, how you conduct your appraisals, and the employee performance metrics you use to track progress. Do you use a specific assessment model such as the 9 box grid? How do you calculate performance-based pay and conduct performance reviews for remote employees?
Who Will Benefit?
Payroll and HR staff and management. Executives want to learn about team collaboration in project management.
