Making Pay for Performance Programs Work

In principle, pay for performance programs have been around for years. In my time as an HR professional, I’ve worked on many different schemes and approaches to compensation. But it’s safe to say that in many of our experiences, pay for performance programs have failed to deliver on their promise to motivate and reward high-performing staff.

The problems have been two fold.

One is simply mechanical. Administering the program can be a real headache. To do it properly, you need to provide decision-makers with accurate and consistent data on performance. Then you need to do all the budget management, allocation, reconciliation and approval. Without proper tools, the whole process can be nightmarish, not to mention error prone. This is not a task for Excel spreadsheets!

The second problem has to do with the design and communication of your pay for performance program. How do you make sure you’re rewarding and encouraging the right behaviors? And furthermore, how do you communicate those rewards in a way that motivates and encourages all staff? Too often, employees come to see bonuses as just another piece of their compensation, and expect the payout without really connecting it to their performance. And what happens when employees really do perform and exceed expectations, but economic forces impact your ability to reward them monetarily?

It’s clear that pay-for-performance programs are not as simple as they first appear.

On January 21st, we’ll be hosting a webinar given by industry expert David Creelman entitled: Why Pay for Performance Can Work at Last. If you’ve ever struggled with a pay-for-performance program that wasn’t delivering, or are in the process of implementing a new program, you’ll find this presentation very informative.

There are still some spots available, but attendance is limited. If you’re interested in participating, or know someone who might be, you can register now.

But I’d also love to hear about your experiences. What lessons have you learned that could be valuable to your peers? Have you encountered any problems that you’d like to hear from others about?