Clearly defined and understood goals and performance standards are the basis of pay for performance programs. The actual performance of the employee periodically compared to these, can be recognized and rewarded (or not). Employees must also be clear on how their individual performance is aligned with the company’s performance and plans can and their performance incentive plans should be designed to reward both individual and company performance.

Conversations are the most important and valuable part of the job. You are learning and receiving candid feedback without it coming back to bite you. We are at the job to get it done and would like to be appreciated for our results. Everyone can do something better, but not everyone is given the same feedback since managers styles also differ, bringing on another issue. Let employees do the job and give them ongoing feedback without worry.

With all this said where does it leave pay for performance? Is it pay for company performance?

The first point is also VERY important for Workers’ Compensation classifications – there are audits at any time and “revised” jobs that are still shown as “clerical” (the least expensive category!), for example, can bring fines and penalties.

From experience, the third is perhaps the hardest and not often done right. A client recently tried to include safety results in bonus calculations and we had to have a conversation about the law of unintended consequences. Non-reporting of what might seem like minor injuries is already a problem – with the “wrong” incentives, it could become rampant and dangerous.

People at a company are more worried about their individual selves (their income, their job security, etc). There are just too many people and too many levels within a company for everyone to share the same mentality of “company first.”

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