Magazine article Workforce

Seven Approaches to New Pay Programs

Magazine article Workforce

Seven Approaches to New Pay Programs

Article excerpt

Performance-based Variable Pay:

Designed to reward employees for achieving specific company and/or individual performance goals. Bonus or incentive programs that typically pay out in cash. Performance is typically measured on an annual basis, although more frequent payouts may be made depending on business cycle and ability to measure results. Award size varies from period to period depending on company and/or individual performance.

Team Incentives:

Used to reward project or work team members based on achievement of specific team goals. Payouts may be at project milestones or the completion of specified performance periods. Most effective when team participants, specific roles and expected contributions are clearly delineated. Target award is generally the same for all team members (either a flat dollar amount or same percentage of pay).

Gainsharing/Results Sharing:

Typically, cash awards based on meeting specific performance objectives that may be operational and/or financial in nature. Employees "share" in the gain/result caused by their contribution. …

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