Performance/Reward Connection• World At Work Survey: 89% of Employers
are Using Short Term Incentives (up from 2004 & 2005)
• Employee Confidence in Long-Term Rewards is dropping”Generational Shift:What We Saw At the Workplace Revolution. Tulgan &
Rainmaker Thinking Inc.
• Business Finance Survey of Readership: Only 17% of Pay-For-Performance plans are considered to be highly successful.
Effective Performance Based Reward Practices
• Basics of Effective Pay for Performance
• An Example
• Some Technical Details
Pay-For-Performance
“We believe that careful examination of criticisms of monetary pay-for-performance systems indicates not that they are ineffective but rather that they are too effective: strong pay-for-performance motivates people to do exactly what they are told to do.”
Baker,Jensen, Murphy,Compensation & Incentives: Practice vs. Theory
Journal of Finance
Vision&
Mission
Employees To achieve the Vision & Mission What must our employees be?
DevelopmentTo achieve our Vision & MissionHow will we sustain our ability to grow & change?
Business ProcessesTo achieve the Vision & Mission what business processes must we excel at ?
FinancialTo achieve our Vision & MissionWhat must our earnings be?
CustomersTo achieve our Vision & MissionWho will our customers be & How must we treat them?
Drivers Goals
Factors Metri
cs
Drivers Goals
Factors Metri
cs
Drivers Goals
Factors Metri
cs
Drivers Goals
Factors Metri
cs
Adapted from Paul Arveson, 1998
Drivers Goals
Factors Metri
cs
Create A Performance Culture
• Vision• Mission• Success Drivers • Strategic Goals• Critical Success Factors• Success Measures
Vision &
Mission
Organization Long-Term GoalsAKA
Success Drivers
Organization Short-Term GoalsAKA
Strategic Goals
Critical Success Factors
Annual BusinessPlans
Long TermPlan
Vision &
Mission
Success MeasuresOrganizational
Metrics
Success MeasuresIndividual Metrics
A Knowledge Services Organization Excels At
Transformation of Information Into Knowledge Useable by the Customer
for at least its original purpose
Vision&
Mission
Employees To achieve the Vision & Mission What must our employees be?
DevelopmentTo achieve our Vision & MissionHow will we sustain our ability to grow & change?
Business ProcessesTo achieve the Vision & Mission what business processes must we excel at ?
FinancialTo achieve our Vision & MissionWhat must our earnings be?
CustomersTo achieve our Vision & MissionWho will our customers be & How must we treat them?
Drivers Goals
Factors Metri
cs
Drivers Goals
Factors Metri
cs
Drivers Goals
Factors Metri
cs
Drivers Goals
Factors Metri
cs
Adapted from Paul Arveson, 1998
Drivers Goals
Factors Metri
cs
Knowledge Services ExampleBusiness Process
Development
Success Drivers
Clearly Defined, Efficient & Effective Processes
Innovation & Learning
Strategic Goals
Business Processes MappedProcess Benchmarks Established
Niche Development
Critical Success Factors
Turn-Around Time MetBudgets Met
Niche Knowledge Repository EstablishedRecognition of Expertise Established
Success Measures
100% Realization of Fees Billed
Niche Clientele Established
Knowledge Services Example
Financial Customers
Employees
Success Drivers
High Consistent Earnings
Deep Relationships
Right Talent Available When Needed
Strategic Goals
Gross Revenue /Person Managed Costs
Client Base That Meets Criteria
Employee Satisfaction
Critical Success Factors
Billing Rate Acceptance
Client Qualification Criteria
Career PlanningMentor ProgramAssignment Management
Success Measures
Profitability Client Satisfaction
100% Retention of the Right People
Performance Management Process• Anchored to
Business Success Drivers
• Clear Expectations• Clear Performance
Standards• Forward Focused
Feedback• Specific Achievable
Success Measures
Individual Measures
Financial Customers Employees
Utilization RateRealization Rate
Turnaround Times met
Investment in Self & Others
Connecting Rewards to Results
• Individual
• Team
• Organization
• Individual Goal Achievement
• Business Process
• Development• Business Process
• Financial • Customers• Business Process
Technical Details
Establish & Communicate
• How the Pay-For Performance $$ Will be Determined & Paid
• Weighting on Individual, Team, Organizational Results
Technical Details• Timing of Rewards (Short-
Term & Long-Term)• Actual Results Consistent
with Plan
=
Getting What You Pay For
• Know Your Business
• Know Exactly What You Want & Don’t Want
• Create A Performance Culture
• Communicate
• Make It Personal
• Make It Real
• Connect Rewards to Results
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