Circling back to your company culture think of what kind of behavior you want to reward with pay increases. If the answer is not performance, a change should be made. This practice is becoming more and more visible in numerous business sectors like healthcare and manufacturing. For these sectors, hiring the right people are often top concerns. These employers recognize that workers with certain skills are in high demand, and they need to pay a premium to attract and retain these employees.
A company with a strong compensation management strategy will make it easy to achieve business objectives. Pay-for-performance links directly with your compensation management strategy.
Company’s use a compensation strategy to define how it views and manages employee pay and benefits. Compensation management serves as a guide and should be outlined in a written document that clearly articulates the organization’s approach to managing employee compensation.
An effective compensation strategy can be achieved by using pay-for-performance. Pay-for-performance enables your company employees to work at optimal level and drive towards your business objectives.
It is important to have a structured pay-for-performance process to ensure employees are meeting company objectives and are assessed on a regular basis. This process should include regular employee performance evaluations to make sure employees are performing and being compensated accordingly
