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3 Reasons Why We Don’t Pay For Performance
By Ron | October 31, 2008
Note: I’m talking about those of us who manage merit pay systems.
Some of us might get close to paying for performance, but no cigar. Why not? A lot of the time it is because of Ron’s 3 Laws of Compensation:
1. Managers are afraid not to give salary increases to those employees who don’t deserve them. They just don’t want to tell one of their people that he doesn’t get a raise and they assume that inflation is around 3%, so they don’t want to grant any one of them a salary increase below 3%. If the salary increase budget is 4%, then the salary differential between the star and the mediocre performer won’t be that much.
2. Every manager has a different perception of performance. Let’s face it, we human beings have a hard time being objective. It never ceased to amaze me that when a group of employees got a new boss, that the new supervisor could have a totally different take on who was performing and who wasn’t. No matter how many times I redesigned the Appraisal Form or the Process, I just couldn’t get around manager subjectivity.
3. It’s never enough. Managers don’t usually believe that the employees in their group are getting paid enough. “Acme Manufacturing down the street pays their people more and my people are all above average in performance.”
Next time I’ll discuss a method that I used to counteract Ron’s 3 Laws of Compensation, so stay tuned…
Topics: HR |
October 31st, 2008 at 9:06 am
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