Performance related pay regularly makes the headlines – and, of course, in the education sector they are very much battling with this conundrum at present.
But is performance related pay a good idea for your business?
The upside is that it is right that good performance should be rewarded, and your team will want to be appreciated for a job done well.
Pay increases should not be awarded purely for turning up at work, or being there a long time. Particularly, if you know an employee is not pulling their weight, or having a negative effect on everyone else.
Pay related not only to the quality of employee performance, but also to output, can have a great impact on the company as well as employees.
But – and you knew it was coming…
It only works if it is handled well. Targets need to be sufficiently stretching that your team feels they have to push, but not so ambitious that they are not achievable.
Pay rewards need to be given fairly, and appropriately. And you need to be ready to deal with the fallout, if any employees feel disgruntled that they have not earned an increase
Equally, you are well aware that pay is not the only motivator for good performance. Recognition, praise, being able to contribute, seeing the effects their performance has had on the business – these are all just as meaningful. In fact, in the long run, these are usually remembered, long after the initial pleasure of a pay rise has been forgotten.
If you would like to discuss performance related pay in your company, please contact us on 01256 328 428.