As an Online HR Software provider and as a person who talks to A LOT of HR People in my role, I have to say the old Pay-For-Performance conversation just keeps surfacing. “Should we link pay to performance or not?”
I realize that it’s a hot topic but I truly believe the answer is… wait for it… it depends. That’s right, there is no one-size-fits all solution for when it comes to someone’s compensation and de-linking that from their performance or not. For example, take an Account Executive / Business Development Professional – you wouldn’t dare remove a commission structure from this group. Or… would you?
I’ve heard the arguments for and against pay-for-performance. I must say that I can follow the logic in thought that when an individual is hired and compensation (base pay) is negotiated and accepted, then that’s what they should receive — nothing more, nothing less. I get it.
I also understand that having separate performance-based compensation conversations sometimes do need to take place. Such as course correction of performance… you’re not likely to offer someone a bonus to start addressing his or her punctuality.
Admittedly, I am very much on the fence with this one. I think it’s appropriate to offer non-compensation strategies for improving performance such as a healthy training budget. It sends a great message: “we’re willing to invest in you.” I do however, think it all comes back to recruitment. Can you remain competitive if most other employers are offering bonuses and/or base pay adjustments tied to performance and you’re not because you don’t believe that’s how it should be? Hmm… sounds like a culture thing, which is fine and is something you can adjust your recruitment efforts for. See? It does depend.
At the end of the day, it’s about choice and that’s exactly what we give you with Sprigg Talent Management Solutions… a choice. You can link or de-link the numbers (ratings and dollars) from your Sprigg Performance Review, it’s up to you.
Contact us today for your free, no obligation demo and / or trial account! www.sprigghr.com.