In a BLR webinar entitled "Compensation Strategies: How to Build a Market-Competitive Salary Structure that Retains and Attracts the Very Best," Diana D. Neelman, CCP of Compensation Resources, Inc. described goal setting in the context of paying for performance.
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Get Your Report Now!In a pay for performance culture, performance rating along with placement in the salary range can be an effective tool in managing your structures and in providing pay increases based on performance.
There are five key issues regarding successful compensation. It should:
- Be within the employee's power to influence
- Relate to the overall organization's goals
- Be measurable
- Be significant and worth paying for
- Have a limited number of critical factors
The success of the pay for performance process is based on cooperation between the manager and employee. Coaching should be a consistent and ongoing process during the year. Managers should provide both praise and constructive criticism in order to drive employees towards the right behaviors that make them work more effectively in their jobs.
Furthermore, utilizing the salary structure by considering both range placement and performance will enable you to manage employee salaries within the existing system of grades and ranges, ensuring market competitiveness.
As always, compensation and performance management programs should be evaluated on an ongoing basis to ensure effectiveness.
Diana D. Neelman is a Principal and Senior Consultant with Compensation Resources, Inc.. (www. compensationresources.com) She manages the research and data analysis relative to the design and implementation of comprehensive compensation programs. Ms. Neelman is responsible for the development of written policy and communication materials, including plan documents, policies and procedures manuals and administrative forms that support the plan designs. She is also responsible for developing and conducting training programs covering various compensation topics. Furthermore, she oversees CRI's Survey Department, which published various compensation and benefits studies each year.
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