The Top 10 Ways to Make Pay-for-Performance Work

1. Make pay-for-performance an integral part of the organization's basic strategy (e.g., pursuit of best-in-the-industry product or service quality).

2. Base incentive determinations on objective (not subjective) performance data.

3. Have all employees actively participate in the development, implementation, and revision of the performance-pay formulas.

4. Encourage two-way communications so problems with the pay-for-performance plan will be detected early.

5. Build the pay-for-performance plan around participative structures such as suggestion systems or quality circles.

6. Reward teamwork and cooperation whenever possible.

7. Actively sell the plan to supervisors and middle managers who may view employee participation as a threat to their traditional notion of authority.

8. If annual cash bonuses are granted, pay them in a lump sum to maximize their motivational impact.

9. Remember that money motivates when it comes in significant amounts, not occasional nickels and dimes.

10. Most plans are hybrids. Build in the best features of profit sharing, gain sharing, and team play.

This piece was originally submitted by Susan Dunn, M.A., Clinical Psychology, Certified Tele-class Instructor, Momentum Coaching, who can be reached at sdunn@susandunn.cc  or visited on the web. Susan Dunn wants you to know: In addition to private coaching, I offer e-courses, online courses and tel-eclasses for your convenience on an array of current topics. Email me for free e-zine.
. The original source is: Kreitner, 'Organizational Behavior'.