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continued from page 26               Valuable as it is as a retention tool,   earn bonus compensation. That’s why
         based on performance. “The opportuni-  performance-based  pay  carries the   it’s important to include everyone, even
         ty to make more money through their   hazard of unwittingly  rewarding  the   those for whom it’s difficult to measure
         achievements is an incentive for your   wrong behavior. “You need to be care-  quantifiable workplace results.
         top  performers to stick around,” says   ful that the performance objectives you   “For people who are solely respon-
         Donna Cutting, CEO of Red Carpet   set are in alignment with your business   sible for their work,  and where  their
         Learning Systems, Asheville, NC (red-  values,” warns Cutting. She points to   activities  can  be  readily  quantified, Top sales people,   the  recent  experience  at Wells  Fargo,   pay for performance plans are more
         for  example, will  expect additional   a bank that rewarded its employees for   straightforward,” says Dye. That’s why
         compensation  when  they  outperform   burdening  customers  with  unwanted   many organizations begin by measur-
         their peers. The goal is to create a win-  accounts, as a textbook illustration of   ing  easily  measurable  achievements
         win situation for employer and worker:   a performance-based pay scheme gone   such as higher revenues by sales peo-
         Fixed compensation costs remain low   bad. “You have to make sure the objec-  ple,  accident  reductions  by security
         while  employees have the chance  to   tives you set are not just based on sales   personnel,  and glowing  customer  re-
         earn more when they excel.         or revenue, but also on the way custom-  ports for service representatives.
           A pay for performance system is a far   ers and colleagues are treated.”  Designing an effective program is
         cry from old familiar reward relics  of   The sales person who  is making a   more difficult for some members of the
         the past, such as the annual seniority-  great number of sales may also have   support staff who  do not perform in
         based salary hike and the automatic   a rushed, impatient manner that irri-  quantifiable  ways.  However,  it  is  not
         year-end bonus. The problem was that   tates your customers. Gear your bonus   impossible. “You can make pay for per-
         the  conventional  system  wasn’t  get-  plan to reward employees for quality   formance work for receptionists, house-
         ting the job done, basically because it   service.  Use  the telephone,  a mailed   keepers,  or  any kind  of  support staff,
         did not incentivize better performance.   survey  or  the  Internet  to  assess  cus-  as long as they are given the necessary
         Moreover,  high performers resented   tomer satisfaction.             tools by management,” says Cutting.
         the fact they were not rewarded for   On the other side of that coin, per-  The  biggest  challenge  is  finding  a
         their superior productivity at a rate   formance-based pay won’t work if em-  way to measure support staff perfor-
         any higher  than others.  Meanwhile,   ployees are unclear about how their   mance that is fair and reasonable. One
         ongoing salary increases  bloated pay-  actions directly contribute to the orga-  approach is to ask “what is this per-
         rolls until the business risked becom-  nization’s bottom line, or lack sufficient   son’s job and how well are they doing
         ing uncompetitive.                 know-how  to perform to their maxi-  it?” Perhaps a receptionist answers the
           Besides  its  direct  financial  compo-  mum potential. “You need to make sure   phone before three rings or greets cus-
         nent, such pay serves to highlight the   employees have a sufficient measure of   tomers in a cheerful  and professional
         connection  between  employee actions   control over meeting the described ob-  way.  If you  ask  employees how  they
         and organizational success. “It’s impor-  jectives,” says Cutting. “And they must   measure their  own  performance you
         tant that people understand their over-  be given the proper tools to do so.”  may hear good ideas that can be trans-
         all part in  the success of  a business,”                             lated into a quantifiable system.
         says Cutting. “Performance-based pay   Include everyone                 Assure success by  continually ex-
         does that.” At some companies perfor-  One  more hazard for  performance-  panding  your  plan’s  scope.  Include
         mance compensation represents  20   based pay: Employees left out of the   more people and develop more refined
         percent or more of take home pay.   program may resent their inability to   performance  assessment  parameters
                                                                               while soliciting feedback from par-

                                                                               Healthy environment
                                                                                 Vital as it is, performance pay is not
                                                                               the only tool for retaining top employ-
                                                                               ees. You also need to cultivate a respect-
                                                                               ful and supportive work environment.
                                                                               “It’s important that people understand
                                                                               what the business wants, and that they
                                                                               feel valued when they meet the employ-
                                                                               er’s  expectations,”  says  Cutting.  “The
                                                                               ability to contribute and to feel involved
                                                                               with the success of the organization can
                                                                               be its own motivation.”
                                                                                 Here are some additional factors that
                                                                               keep your best people aboard:
                                                                              illustration © DisobeyArt | iStockphoto  Christina Eanes, a workforce manage-
                                                                                 • Autonomy.  “High  performers  do
                                                                               not like to be micro managed,”  says
                                                                               ment consultant in Alexandria, VA
                                                                               (  “They  want  the
                                                                               freedom to do their  job in  a creative
                                                                               way,  along  with  the  requisite  respon-
                                                                                                continued on page 30

         28     Wire Rope News & Sling Technology   August 2018                sibility and authority.” That serves the
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