Is your firm ready for pay for performance?

Plans should reflect and reinforce culture employer trying to develop
By Annette Cyr
|Canadian HR Reporter|Last Updated: 01/20/2010

There are many options to consider and many ways to design an appropriate pay-for-performance plan. The place to start is with the compensation philosophy — different employers have different philosophies guiding compensation practices based on an organization’s goals and objectives.

To ensure alignment with the strategy and compensation philosophy, the pay-for-performance plan should reflect the type of culture an organization is trying to develop.

For instance, if an organization is in a substantial growth mode, it may want to pay aggressively and reward aggressively to attract the appropriate talent — and this should be considered in the design of the pay-for-performance plan and measures. If an organization is mature and looking to improve efficiencies, it may want to implement measures of efficiency and standards.