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YEAR-END: REVIEW YOUR COMPENSATION PRACTICES, PART 1

Posted on November 27, 2017 by Trinity HR

This is the time of the year that organizations start preparing for their year-end performance evaluations and compensation.  Most organizations (small, mid-sized & large) already use a performance-based approach to compensation.

  • That’s because performance-based pay has proven to be the most effective basis for rewarding employees.
  • It is also an area that candidates want to know about, especially those who are part of your executive and management recruting.

If your organization is:

  1. Already doing so, it’s smart to review the specifics of your approach
  2. Not using this approach, it’s wise to re-evaluate why not

In this multipart series of articles, we’ll cover topics such as the following:

  1. Objectives of pay for performance
  2. Developing a rewards philosophy
  3. Essentials of Performance-Based Pay

Objectives of Performance Based Pay

Developing a Performance Based Pay (also called Pay for Performance—Trinity prefers Pay for Results) philosophy starts with an organization clearly identifying what it wants to achieve with it.  We believe the following objectives pretty much describe the objectives of the vast majority of organizations—perhaps worded somewhat differently:

  1. Recruit and retain the highest quality employees
  2. Communicate and reinforce the values of the organization
  3. Engage employees in the organization’s success in achieving (better yet, exceeding) its objectives related to financial and non-financial objectives

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  4. Reward contributors for successful achievements
  5. Differentiate rewards provided based on the importance of the contributions at three inter-related levels:
    • Individual
    • Team/Department/Division
    • Organization-wide

Your Performance Based Pay objectives should be a sub-set of your overall compensation philosophy.
MORE ON THIS SUBJECT IN PART 2.

For more information:

HOW TRINITY CAN HELP:

  • Trinity’s Team has extensive experience in helping organizations to create highly effective compensation programs, including incentive compensation plans.

You have HR CHALLENGES…Trinity HAS SOLUTIONS!

Posted in Compensation & Performance Management