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Pay for Performance Culture
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In an extremely competitive world today, it is important to be on the top of your game, in order to truly succeed. Performance is essential to succeeding in your work environment, especially with most companies enforcing a pay for performance culture in their workplace. This culture essentially means that your incentives and overall compensation will essentially be based on your performance. Most experts believe that fostering this culture in any organization will help improve overall productivity while also having a positive impact on collaboration and team work.
 
However, in order to ensure that the system in place is successful, it is important to understand the meaning of this culture and what it entails.

Objectives of pay for performance culture

If you are planning to adopt a pay for performance culture in your organization, it would help if you could understand how it actually helps your organization. Here are some simple benefits of adopting this strategy.

• Allows you to recruit and retain employees that are the best of the lot.
• Allows and enables easy communication of the goals, vision, values as well as objective of your company with your employees.
• Ensures that employees take pride in the accomplishments of the company, as if it were their own.
• Allows for proper reward and compensation of the efforts and contributions made by different employees.

Essentials of such a Culture

When developing a pay for performance culture in your organization, it is essential to know the basic elements that such culture must have, to ensure its success in implementation. These consist of:

• Compensation for performance should ideally be tied to the overall financial objectives of the company. In other words, instead of thinking of this as an expense, it must be looked at as an investment. Understanding and appreciating the fact that performance based incentives will improve the overall financial outlook of the company will ensure that the culture is successful.

• Ideally, pay for performance culture should include both short term as well as long term compensation incentives. An ideal balance of short term and long term incentives in any organization will improve productivity, employee loyalty, and ensure satisfaction amongst its employees.

• When designing a compensation plan for performance, it is important to ensure that the plan is exciting and motivating enough for employees to desire it. In short, make sure that you develop a plan that will enable significant change in performance smoothly and seamlessly.

• If you want such a culture to truly succeed in your organization, it is important that the employees actually see the link between their performance and the compensation. Performance should be such that an employee can truly see the change while relating it to the growth in their incentives. Inability to create a visible impact on performance can lead to frustration, which can be difficult to manage.

• Communication, finally, is the key to successful implementation of pay for performance culture. It is important that the employees know what they are striving for and how they will benefit.

Enforcing a successful pay for performance culture in your organization will include taking care of all these above points while also studying the attitude and behavior of your employees as well as their motivation.

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