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5 Reasons You Should Pay for Performance
1. 5 Reasons You Should Pay Employees for Performance
bamboohr.com payscale.com
2. 5 Reasons You Should Pay Employees for Performance
bamboohr.com payscale.com
Daniel Dean
Product Marketing Manager
BambooHR
Mykkah Herner
Modern Compensation Evangelist
PayScale
3. 5 Reasons You Should Pay Employees for Performance
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What Is
Pay for Performance?
“Links pay (base and/or variable), in whole or in part, to
individual, group, and/or organizational performance.”
—The World at Work Handbook of Compensation, Benefits & Total Rewards
4. 5 Reasons You Should Pay Employees for Performance
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Types of
Pay for Performance
• Bonus
• Variable (commission)
• Yearly raises
5. 5 Reasons You Should Pay Employees for Performance
bamboohr.com payscale.com
5 Reasons
You Should Pay Employees
for Performance
6. 5 Reasons You Should Pay Employees for Performance
bamboohr.com payscale.com
Cost-Efficiency
1
7. 5 Reasons You Should Pay Employees for Performance
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Recruiting and Retention
The average raise is 3 percent of salary.
The cost to replace an employee is 30-400 percent of salary.
2
8. 5 Reasons You Should Pay Employees for Performance
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It’s the Right Thing To Do
3
9. 5 Reasons You Should Pay Employees for Performance
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Better Culture and
Happier Employees
“In large part, culture is a product of compensation.”
— Alec Haverstick
4
10. 5 Reasons You Should Pay Employees for Performance
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Drives Results
5
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Who Does Compensation
Matter Most To?
12. 5 Reasons You Should Pay Employees for Performance
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Age
BABY
BOOMERS
1946-1964
GEN X AND
BUSTERS
1965-1983
GEN Y AND
MILLENNIALS
1984-2002
COMMUNICATION
ABOUT COMP
AVERAGE TENURE
CAREER MINDSET
Mostly Private
15+ yrs
Retirement
Work/Life Balance
COMMUNICATION
ABOUT COMP
AVERAGE TENURE
CAREER MINDSET
Somewhat Private
5+ yrs
Management
Work/Life Balance
COMMUNICATION
ABOUT COMP
AVERAGE TENURE
CAREER MINDSET
Public
15 mos-2 yrs
Go-Getters
Advancement
Flexibility
13. 5 Reasons You Should Pay Employees for Performance
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Gender
MEN
• No. 6 reason they left their job
• 79 percent are annoyed by low salaries
• 74 percent are annoyed by unequal pay
WOMEN
• No. 4 reason they left their job
• 86 percent are annoyed by low salaries
• 83 percent are annoyed by unequal pay
14. 5 Reasons You Should Pay Employees for Performance
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MANAGERS
• No. 5 reason they left their job
• 84 percent are annoyed by low salaries
• 79 percent are annoyed by unequal pay
Manager Non-Managervs
NON-MANAGERS
• No. 4 reason they left their job
• 81 percent are annoyed by low salaries
• 78 percent are annoyed by unequal pay
15. 5 Reasons You Should Pay Employees for Performance
bamboohr.com payscale.com
• Individualized Rewards & Recognition
• Variable or Incentive Pay Plan
• Base Pay Plan
• Company Culture, Compensation
Philosophy & Compensation Strategy
The Compensation Mix
16. 5 Reasons You Should Pay Employees for Performance
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• Develop Clear Compensation Strategy
• Get Reliable Market Data
• Develop Clear and Aligned Goals
Strategy
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How Should I Start Paying
for Performance?
18. 5 Reasons You Should Pay Employees for Performance
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What’s Hindering
Pay for Performance?
Negatively labeled Millennials
Talking compensation is taboo
Switching jobs is easier
Moving away from performance reviews
1.
2.
3.
4.
19. 5 Reasons You Should Pay Employees for Performance
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Daniel’s Tips
for What To Do Today:
Take a look at your culture.
Bring back (some) reviews.
Create clear communication.
Make unique decisions for your
unique company.
1.
2.
3.
4.
20. 5 Reasons You Should Pay Employees for Performance
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Mykkah’s Tips
for What To Do Today:
Gain executive buy-in.
Align with organization goals & culture.
Get the right systems in place.
Train managers properly.
Communicate clearly across the organization.
1.
2.
3.
4.
5.
21. 5 Reasons You Should Pay Employees for Performance
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“Employees won’t believe there is a link between
pay and performance unless they can see it.”
—Margaret O’Hanlon, re:Think Consulting
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Follow BambooHR and PayScale on social media:
bamboohr.com/blog | payscale.com/compensation-today
Thank you!
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