How do great ideas turn into action, or get stopped? Discuss the process of designing possible outcomes and evaluation tools and methods. In many organizations, performance management is an on-going cycle of setting, implementing, evaluating and rewarding performance, all with continuing feedback and coaching. In addition, base pay is linked to performance through performance evaluation so that exceptional performers receive a greater level of reward. Every year at a major freight and delivery company, managers complete a salary planning process during which they make decisions about pay increases. The employee's last performance evaluation is an important factor in making these pay decisions. When evaluating performance, managers look at:.
The extent to which the employee met, exceeded or did not meet their performance objectives, and.
The extent to which the employee applied the skills associated with their role Based on this assessment, managers reaches an overall evaluation. .
Open and direct discussions about personal objectives, achievements and pay are essential to making Pay for Performance work.
What are we trying to do? Many organizations hold the belief that one of the reasons for lagging sales and job performance is the complacency of employees. The general belief being that employees are so comfortable in their job, and satisfied with their salary that there is not much incentive for them to excel. This leads many employers, to include Major Freight And Delivery Company, to change to a pay for performance plan for many employees. The theory is that when employee pay is based solely on performance, they will take more of an active role in their job. In the case of Major Freight And Delivery Company, they changed the pay structure of their account executives from salary to pay for performance in an effort to increase the number of accounts. They felt that the account executives would more aggressively pursue new business if their paycheck depended on it, as opposed to the employee complacency they had experienced under the salary plan.
