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COMPENSATION PLAN “RE-DESIGN”, to promote team performance, must start by thinking through the basic concepts and goals for a pay program!
Determine “how” the employee will carry out the work (individually or as a group member); then determine if and how “individual” performance or outcomes can be controlled by the employee. The answer will lead you to one of the following methods of establishing pay.
INDIVIDUAL Pay programs based upon individual “Performance” or “Knowledge and Skill”
GROUP Pay programs based upon performance by a “Team” or other organizational unit
COMBINATION programs utilizing a combination of “Individual” and “Group” concepts
POINTERS regardless of the approach selected:
| - The more complex the program the greater the likelihood of employee mistrust |
| Communicating expectations at the beginning of the “measurement period” is a must in any program |
| Establish a sunshine clause (a start and end
date) to clearly recognize and communicate the changing world of the
business/organization. |
For assistance with Compensation Plan Design contact:
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