Using compensation to motivate performance

bamboohr.com payscale.comUsing Compensation to Motivate Performance Compensation Value Communication drives employee engagement... bamboohr.com payscale.comUsing Compensation to Motivate

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bamboohr.com payscale.com

Cassie Whitlock

Director of HR BambooHR

Mary Lasky

Compensation Professional

PayScale

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What Drives Engagement?

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The building blocks of high

performing people, cultures,

and organizations.

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INPUT ELEMENTS

What You Need to Get Work Done

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INFLUENCER ELEMENTS

What Moves You Forward

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Using Compensation to Motivate Performance

Compensation

Value Communication

drives employee engagement

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Compensation as Cornerstone

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What We Believe About Pay

A survey of 71,000 people shows that most can’t identify how they’re paid compared to the market

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To Increase Trust, Determine

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Manager Toolkit

• Compensation plan talking points

• Compensation plan information

• Details for each employee they supervise

• Tips for each type of conversation they may have

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1 Work with senior leaders to define your compensation strategy

2 Build a compensation plan with reliable data

3 Define SMART goals for employees

Immediate Steps to Improve

Pay Communication

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Connecting Performance

with Pay

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1 Pay is fair and consistent with the value of one’s contribution

2 Pay increases are at an appropriate pace and reflect the employee’s on-going performance as well as changes in the labor market

3 Motivates higher levels of performance from all employees

What should a

pay for performance plan achieve?

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Company culture, compensation philosophy, and compensation strategy Base pay plan

Variable or incentive pay plan Individualized rewards & recognition

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(PayScale 2018 Compensation Best Practices Report)

84% of all orgs plan to give increases in 2018

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How companies are recognizing high performers

PayScale 2018 Compensation Best Practices Report

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• 71 % of organizations offered variable pay (bonuses, commissions)

• Number of spot bonuses decreased YoY from 46 % to 39 %

• Individual incentive increased (67 % vs 64 %)

• Hiring bonuses increased (34 % vs 27%)

Employers are counting on variable pay

to hire and retain

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• Passes to sporting events

• Catered lunches for winning teams

• Days off after big deadlines

• Choice of work assignment

• Development opportunities

• Lunch with the CEO

• Remote work

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Typical Challenges

• Insufficient funding / budget

• Poor goal setting / unclear definition of performance

• Unrealistic employee rewards expectations

The best rewards program will not be successful if not clearly

understood by employees.

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Use a Merit Matrix

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Consider:

• Pricing jobs to market; use budget to bring green outliers into range

• Give market-based increases for positions where market shows steady upward pattern

• Use budget to address pay equity (gender, compression, etc.)

• Invest in an incentive pay pool; payout based on goal attainment

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Practices for building a

• Get buy-in from all levels

• Don’t incentivize individuals who are consistently under-performing

• Decide what good performance looks like

• Create feedback mechanisms

• Set rewards expectations with employees

• Create a merit matrix

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Develop Clear and Aligned Goals

• Company or Organization Level

• Department or Team Level

• Individual Level

Goal-Setting Best Practice

• SMART – Specific, Measurable, Attainable, Relevant, and Timebound

• KIS(S) – Keep It Simple!

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Developed Collaboratively

Articulated Clearly

Aimed at Excellence Individualized

to Strengths

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Takeaways

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1 Define performance management processes

2 Identify employee motivators

3 16 Elements of Engagement health check

4 Develop a toolkit for managers

Takeaways

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BambooHR

Receive a free job posting on our ATS and full HRIS for one week.

We will contact everyone within the next few days to set this up.

Check out the 2018 Compensation Best Practices Report

PayScale

https://www.payscale.com/cbpr

Questions ?

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bamboohr.com/blog | payscale.com

Thank you !

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