A well-designed compensation system motivates employees and rewards work that leads the organization toward its goals. Unfortunately, many systems fall short.
- Do employee ratings show a “Lake Wobegon Effect,” with everyone above average?
- Do a few employees receive high-value bonuses while there’s no recognition for the staff members who support their accomplishments?
- Does everyone benefit equally when the organization does well, regardless of their personal performance?
- Do you give every employee a pay increase every year?
- Do you base compensation on market data and your organization’s culture?
- Do managers set individual employee goals that are aligned with the organization’s strategic goals?
- Do managers rate employee performance based on objective criteria?
- Do you calibrate performance ratings across the organization?
- Do employees understand the total value of their compensation, including benefits such as training?
- Do you have money in the budget for short-term incentives and on-the-spot rewards?
If you answered “Yes” to any of the first four questions or “No” to any of the last six, your compensation system isn’t as effective as it could be. Download the white paper “Pay, Performance, and Productivity: How to Use Compensation to Motivate and Make a Difference” to discover how to revamp your program.
[Image Source: Frits Ahlefeldt-Laurvig]