Performance Management 2.0: Improving Your Employee Motivation Strategy


How do you address employees who aren’t performing? I joined 15Five’s Director of People Science, Courtney Bigony and Chief Culture Officer, Shane Metcalf, in a recent webinar where we addressed ratings and compensation as they relate to performance reviews. In my book, Next Generation Performance Management , I differentiate between Performance Management 1.0 (PM and Performance Management 2.0 (PM is not tolerating poor performance.

What Does a Bonus Mean?

Compensation Cafe

Can your employees tell the difference between a raise and a bonus? After all, we often don't make much of a communication effort when we award bonuses. Most employees don't really understand that business performance affects merit budgets.


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Progressive Performance Management: Why Your Employee Compensation Strategy Is Holding You Back


The Annual Performance Review is Dead! One of the main issues that HR leaders face when considering a progressive performance management program is how to revamp their employee compensation strategy. Alan Colquitt is one of the world’s greatest experts in the field of HR and performance management. Courtney: In your book, Next Generation Performance Management , you differentiate between Performance Management 1.0 (PM

6 Ways Incentive Plans are Like COVID-19 Planning

Compensation Cafe

Comparing incentive plans to a pandemic response seems like a stretch, but great incentive plans are all about stretching. Stretching company performance. Every good incentive plan project starts with a simple question.

When Incentive Pay Goes Rogue!

Compensation Cafe

A friend of mine likes to say: “It’s not that incentive pay doesn’t work well, it’s that it works TOO well. 5,300 professionals and managers fired. Like any well-designed incentive compensation plan, Wells Fargo’s started with a strong company culture and a simple goal that required special effort. Where was the team whose counter-incentive plan was based on finding and correcting fraudulent activity on the part of plan participants?

5 Lessons from Glittery Smelly Incentive Plan Mistakes

Compensation Cafe

It turns out that incentive compensation doesn’t just work, it can work too well at motivating the wrong behaviors. Make sure you design your incentive plan to reduce the possibility and rewards for cheating. Incentive plans are difficult to get perfect. Dan Walter is a CECP and CEP and works as Managing Consultant for FutureSense. Dan has written several industry resources including an issue brief on Performance-Based Equity Compensation.

The Real Cost of Mismanaged Incentives: Wells Fargo

Compensation Cafe

Today is a steaming jolt of quadruple espresso in response to the Wells Fargo incentive pay mess. Let me start with the fact that I have been interviewed a few times about this story and even I was surprised by my response to the question, “What companies in the financial world are considered to have good incentive programs?” and Jim Brennan’s Excessively Successful Incentives ). Even worse, rather than adapting the incentive plan over time.

Do Your Incentive Plans Motivate Choking?

Compensation Cafe

Could it be that we are designing and communicating incentives for our highest performance all wrong? A recent study titled “ Reappraisal of incentives ameliorates choking under pressure and is correlated with changes in the neural representations of incentives ” appears to show that the fear of losing a reward allows people to perform at the edge better than the desire for earning more award.

Are You Thinking About Your Performance Management System Too Narrowly?

ATD Human Capital

Performance management system failure most often comes down to a lack of clear purpose. However, a lack of alignment can also derail performance management systems. Is Performance Management Aligned? While the performance review or appraisal process is usually the key point in managing performance, it is only one element of the performance management system. Managers are usually on the hot seat for failures.

17 Words About Incentive Pay

Compensation Cafe

The 17 words listed align incredibly well with common incentive plan designs. A quick review of incentive pay basics. This is another situation where many people would be very disappointed if they didn’t “get their bonus.” But, if you ask the people at the very top, they will usually tell you that people shouldn’t expect to get paid on their bonus. That leaves three that don’t fit our normal incentive models.

Cafe Classic: Develop Grow Achieve - 3 Tiers for P4P

Compensation Cafe

Editor's Note: Three cheers for Dan Walter's cogent and Classic advice on how to make pay for performance more successful in your organization. Pay for performance continues to rise. However, the failure of pay for performance is rising almost as fast.

Talent and Performance Management Survey Summary

HR Daily Advisor

The HR Daily Advisor research team conducted the 2016 Talent and Performance Management Survey in January, 2016. Talent and performance management are some of the most important and rigorous tasks any HR professional has to deal with. We asked participants everything from how they identify high-performing employees to how they reward those employees to what survey participants think about performance appraisals in general. Managing Shortages.

The Time is Now. Compensation Pros Must Rise to the Challenge.

Compensation Cafe

When the vast majority of companies have incentive programs that look very similar, but prospects that look far different, we must consider whether “market data” truly reflects our markets. Do your incentive plans promote the decisions, behaviors, and actions that truly define your success?

Compensation Air Traffic Control

Compensation Cafe

There is no rule book. He is a “Compensation Futurist” who works as Managing Consultant for FutureSense. Dan is also a leading expert on incentive plans and equity compensation issues.

Cafe Classic: To Innovate in Rewards, Get Outside the Rewards Profession

Compensation Cafe

Which means that disruptive change, innovations that move the field of play and introduce new compensation management solutions, might likely originate outside our profession. Editor's Note: Because innovation is messy and irritating, and because we like to ruffle feathers here at the Cafe.

Study 60

Cafe Classic: Putting on Your Explorer Cap via Appreciative Inquiry for the Compensation Pro

Compensation Cafe

Editor's Note: More than a few of us number nerds populating the field of compensation have a Classic deficit in the soft skills required to constructively explore and understand the territory and circumstances surrounding employee and organizational performance. . Several people recommended AI and I decided to give it a try, to the tune of an all-day workshop, several articles and a book purchase.

Thank You for 10, 360 and 180,000 Reasons

Compensation Cafe

First, I think we all want to be better and perform at our potential. He works as Managing Consultant for FutureSense. He has three metaphors for every occasion and is a leading expert on incentive plan and equity compensation issues. This post is about recognition.

Compensation Dentistry (part 1)

Compensation Cafe

Annual and long-term incentive plans are often not as well cared for. They just exist and perform as designed and we may not dig back into them more than every couple or three years. Other times we have been warned by managers or staff that a program is ineffective, or worse. Just like the fact that most kids don’t grow up wishing to be a dentist, few compensation professionals aspire to be mavens of incentive plans. Yes, incentive plans can be harder than base pay.

Put Some Teeth in Your P4P

Compensation Cafe

Often, Pay for Performance can be a similar experience. Every compensation professional who has ever worked on an incentive plan has struggled long and hard with figuring out exactly what was to be accomplished, how it could be measured, what levels of achievement were good enough, what levels were actually good and what levels were truly great. We have fought to get our programs understood and approved by the same management teams who requested them in the first place.

Develop Grow Achieve - 3 Tiers for P4P

Compensation Cafe

Pay for performance continues to rise. However, the failure of pay for performance is rising almost as fast. Usually the drive for pay for performance comes from the top of the company. “We Grow metrics and goals work especially well for short-term-incentive programs and as interim measurements in long-term incentive programs. ACHIEVE This is what your CEO or other “boss-like figure” means by performance-based pay.

Cafe Classic: The Top 4 Risks in Pay for Performance

Compensation Cafe

Editor's Note: There are those who believe pay for performance is the answer to all problems - and those who see it as universally destructive. The trick is to conceive and implement them in a way that recognizes their place in the overall system where performance must be improved and acknowledges the risks that this involves. With that in mind, I give you Dan Walter and his evergreen insights on the top risks to performance pay. Performance compensation is often confusing.

You ARE Being Replaced by AI

Compensation Cafe

At offices around the world hiring managers and HR Business Partners go through their days stunned but resolute. Base with a 31.69% target incentive level, based on the fourteen individually weighted metrics recently established by our big data mining exercise in conjunction with our actuarially-modeled best-case scenario using the recent new pricing model from that academic team at MIT.”. He works as Managing Consultant for FutureSense. September 5, 2028.

The High Success Rate of Low Expectations

Compensation Cafe

But this is how many companies view targets for their incentive plans. Too often, plans are designed this way because of a misunderstanding of incentive pay. The basic premise of pay for performance is this: targets and quotas are meant to require effort. A perfectly designed incentive plan (good luck with that) will require people to stretch, while being 100% achievable, with a bit of effort and great execution. Congratulations, you read this sentence! Not impressed?

OMG! You Were Right All Along!

Compensation Cafe

Remember that time you spent weeks modeling a new incentive plan only to have it shot down? Remember that other time you explained to your managers that they needed to have frequent conversations on the new pay for performance program? It’s difficult to stand your ground when a CEO or department head pushes back on a new incentive plan. Dan has written several industry resources including the recent Performance-Based Equity Compensation.

5 Pay Predictions Post-COVID

Compensation Cafe

The best companies will plan for a new world where mid-level managers are better (and paid accordingly). Training will change and performance management will adjust with it. There will be a rethinking of the concept of “long-term” incentive plans.

Employee Motivation: Why Bonuses May Not Be the Answer


A study by Willis Towers Watson found that only 20% of employers in North America actually believe merit pay is effective in driving high performance. Traditionally money was seen as the main incentive used to motivate employees. Higher productivity results in higher salaries and bonuses. How managers can use intrinsic motivators Douglas McGregor’s XY Theory was one of the first to make the distinction between the use of extrinsic vs intrinsic motivators.

Autonomy Doesn’t Mean Anarchy

Compensation Cafe

The new owner put a long-time employee in charge as manager and delegated duty. They may recommend some kind of an incentive plan to reward better behavior (it might not be a bad idea). They may even provide some thoughts on performance reviews, training, and accountability. Yes, people want the independence and control to perform their jobs well, but few want the accountability that comes with the requirement to consistently achieve.

Cafe Classic: Happy Holidays & an Evidence-Based New Year!

Compensation Cafe

Editor's Note: Although Big Data, Analytics and now Artificial Intelligence have arrived, and evidence-based management (seeking and using evidence to make better-informed decisions) is mainstream practice, there are still many of us (in HR and even in the field of rewards) who aren't where we should be in embracing this new reality. When was the last time you picked up a copy of Academy of Management Journal ? Evidence abounds that evidence-based management is our future.

Cafe Classic: Time for Spring Cleaning?

Compensation Cafe

My time is booked out." Problem is, if there are so many managers and employees that need you urgently -- or programs with ugly loopholes -- it's a safe bet that things aren't really in order. . Interview managers who approve overtime to determine if there are consistent practices and understanding of the regulations. If you have anniversary date performance appraisals , check out the backlog, contact the managers and eliminate it.

Cafe Classic: Does Self-Help Help?

Compensation Cafe

Editor's Note: With the ever present, media-fueled merry-go-round of subject matter experts out there, why haven't we yet solved our critical talent management and reward problems? All you need do is read a book, attend a webinar or buy their information-packed DVD. Why are managers still making poor decisions, wasting money and creating employee morale screw-ups from dawn to dusk? He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?)

Conference Inspiration Sources – Many and Varied for 2018

Compensation Cafe

The WorldatWork 2018 Total Rewards Conference and Exhibition is now in the history books. These included: pay transparency, CEO pay ratios, gender pay equality, applied analytics, ratingless continuous performance management, behavioral science, artificial intelligence/machine learning and the speculated future of pay and rewards, the rewards process and the rewards professional.

How to Make Headway on Pay Transparency

Compensation Cafe

It's time to accept that your job has changed from gatekeeper (limiting access to pay knowledge until employees are "ready") to educator (describing the nuts and bolts of salaries and incentives). Have you measured your progress on pay transparency? It's definitely time to check.

Compensation Work and Skin in the Game

Compensation Cafe

And how efficiently can you identify the obstacles that your current reward programs -- base pay delivery, incentives, benefit plans and programs -- will toss into the path of the workforce transformation that must now happen? Ann Bares is the Editor of Compensation Café, Author of Compensation Force and Managing Partner of Altura Consulting Group LLC , where she provides compensation consulting services to a wide range of client organizations.

Cafe Classic: Don't Pitch Your Old Tools

Compensation Cafe

Old tools can include pay compression solutions, rabbi trusts, merit increase matrix programs, flat absolute pay increases, phantom stock, slotting, tax equalization, step increases, fixed base salaries with re-earnable bonuses, shadow grades, forced performance distributions, totem pole rank & yank systems, balanced scorecards, gainsharing and many more elements. Base Salaries Incentives/Bonuses Pay for Performance Performance Management Total Rewards

Checks on the Chalkboard

Compensation Cafe

Many are performed because the supporting systems have not been set up to their full capabilities. Dan has written several industry resources including a recent Performance-Based Equity Compensation issue brief. He has co-authored ” Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation” , “Equity Alternatives ” and other books. Is everything you do necessary? Perhaps, I should ask the question differently.