As a lifelong salesperson, I have always contended that all employees should be on some variable, performance-based pay. This article from CareerJournal indicates that a trend is forming in this direction.
Employers are making employees work harder for their money.Most workers will receive modest raises this year and next, as employers reward employees with performance-linked bonuses rather than broad salary increases, according to a survey by consulting company Hewitt Associates Inc.
That first sentence is bunk. I’m guessing the author has not worked in sales. The better lead would be to state Employees now have a chance to earn far more money for their efforts.
“More companies are relying on bonuses as the basis for pay for performance than they are on merit increases,” says Hewitt consultant Ken Abosch. Bonuses can help employers manage costs and are “very effective around creating focus” on business objectives, Mr. Abosch says. Hewitt’s annual survey included about 1,000 large and midsize U.S. organizations this year.
Amen to that. The article continues by raising typical questions – unattainable goals, poor manager reviews and undefined goals. These are all valid concerns, but the strategy of performance pay trumps them all.
The article closes with this gem:
Last year, the approximately 60% to 70% of employees who fell within the satisfactory range received merit raises between 2% and 3.5%; they also were eligible for bonuses. The mentality, Ms. Weinstein says, has gone “from entitlement to meritocracy.”