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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

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

Compensation Cafe

For at least a few decades, this has been the way of things in the world of compensation. Now is just such a time for compensation professionals. The current crisis has exposed the dusty corners of compensation practices. Change is hard.


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Overlooked Fundamentals of Compensation Strategy

Compensation Cafe

Not a great foundation for a compensation practice! salary increases and bonuses with flimsy links to everyday work, it's hard to engage people beyond job security unless you have career development alternatives to offer.

Incentive Compensation Management Software


Compensation planning on its own is a complex topic. A robust compensation framework must be internally equitable, externally competitive and compliant with pay and labor laws. Incentive compensation planning takes the concept a step further. Incentive Compensation is variable pay that is given to deserving candidates for exceptional performance. When done right, incentive compensation: Pushes all employees to give their very best.

Everyone Gets a $100,000 bonus!

Compensation Cafe

When 1,380 employees got a $100,000 bonus each, the story should have made headlines everywhere. The brilliant bonus decision was a wonderful example of a corporation that cares deeply about its employees. Each employee of Hilcorp was granted a one hundred thousand dollar Christmas bonus for their individual contributions to company success. No differentiation by title, grade, base pay, seniority, performance, race, sex, hair-color, weight or other irrelevant variables.

An Unpopular Sales Incentive Plan Design Fiasco

Compensation Cafe

The new sales incentive plan was not well received. All the worldwide regional managers in the audience spoke up in loud protest when it was announced at the global sales conference. Their disapproval disappointed the corporate headquarters compensation experts tasked with the duty to faithfully but delicately comply with the incentive program guidelines supplied by the division's senior management.

Thank You for 10, 360 and 180,000 Reasons

Compensation Cafe

The recognition of each of you reading this post, and anyone who has ever read a post on the Compensation Café. First, I think we all want to be better and perform at our potential. He works as Managing Consultant for FutureSense. This post is about recognition.

Compensation Communications that Hit the Mark This Time

Compensation Cafe

What have data and analytics got to do with compensation communications? Imagine you had to tell the Compensation Committee that the company couldn't afford one of their proposals. You'll do a better job, and get better scores on the annual engagement survey.

Unleashing Your Inner Scientist: Lab Mindsets & HR/Compensation Experiments

Compensation Force

I agree with the direction of this thinking, that moving compensation (and all HR) programs and practices forward, at the ground level where most of us live and work, will happen through evidence-based learning and innovation, through tinkering and tailoring , and through raising the bar on our understanding of fundamental data analysis. Anderson of Northwestern's Kellogg School and Duncan Simester of MIT's Sloan School of Management.

Compensation: What to Look for in 2021

CCI Consulting

It’s probably no surprise that the social and economic impacts of COVID-19 have forced a significant number of organizations to reevaluate their approach to compensation this year. This is especially apparent when it comes to employee compensation.

Cafe Classic: Scenario Planning and Reward Design in an Uncertain World

Compensation Cafe

Compensation planning - like life in general - is a lot tougher in today's reality. From the article: Trying to gain a better understanding of the trends shaping the competitive environment has always been critical for managers.

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 HiPos.

4 Tips for 2020 Career Development

Compensation Cafe

What happens when you disappear raises, slim down bonuses, freeze salaries and/or jack up benefit costs? Most employee surveys have reported this yearning for years. Many managers yearn to gussy up titles as a way of making employees feel better in a down market.

You ARE Being Replaced by AI

Compensation Cafe

Just a few months ago the last compensation professional on earth was terminated by their corporate overlord. At offices around the world hiring managers and HR Business Partners go through their days stunned but resolute. People must be attracted, motivated and even retained (except for those poor saps from the compensation department.) AI, “Oh and equity compensation in the form of a perfectly blended mix of 63.3% He works as Managing Consultant for FutureSense.

Competitive Market Surveys Rarely Produce Identical Pay

Compensation Cafe

Compensation professionals love to cite “the open market,” while being less eager to admit that every market is different. The reasons may be seem obscure to outsiders, but they are clear to those who follow the arcane practices of the wage and salary management field. Each employer using an identical survey published by a reputable professional analytical organization ends up with its own unique number as the appropriate target.

Cafe Classic: Is Pay a Critical Part of Culture or Not?

Compensation Cafe

Typically, the statistics we read about in workplace surveys are intuitive. Employees that took that survey were asked to rate the three most important attributes of workplace culture. So what is driving the results from employees, and what should HR and managers be doing about it?

Cafe Classic: The Compensation Cookbook

Compensation Cafe

Editor's Note: Here, for a little midweek fun, we bring you Jim Brennan and his long-awaited, utterly authoritative and instantly gratifying dictionary of compensation decisions. The Compensation Cookbook will solve all your problems. No compensation chef should be without this essential guide to serve up the ideal menu in your café, restaurant, or eatery . Freeze the pay of the remaining lowest 5% of performers and place it in a Frozen Fund.

Why Communicate Now?

Compensation Cafe

Compensation departments often run on the "no news is good news" communications strategy, choosing to take the upper hand in their relationship with employees. Compensation departments just don't understand, or trust, the power of communications. Why communicate now?

Why Compensation Doesn’t Drive Motivation


But will the incentive of a higher salary or compensation bonus improve their work performance? Financial incentives can undermine autonomy and intrinsic motivation Click To Tweet. More than 70 percent of today’s workforce are knowledge-based employees, meaning their performance is driven by their skills, attitude, and their ability to innovate and drive change. Compensation Isn’t Enough. They are less interested in settling, even if compensated.

Binge Watching at Compensation Cafe!

Compensation Cafe

I often talk about employee communications at Compensation Cafe. Following are their insights into implementing incentive pay and sales compensation, with additional information on how to accomplish their recommendations. This six-minute video describes how ADP repaired a restructured bonus plan implementation that was running out of steam by eliminating ineffective communication tactics. Culture and Communication Are Critical Factors for Sales Compensation Policies.

The Immutable Laws of Compensation (Part 2)

Compensation Cafe

The Third Immutable Law of Compensation: Compensation is always done for, and by, people. Second Corollary: Compensation strategies, decisions, and execution will always contain errors or assumptions that cause them to go awry. (See See Dan’s Third Law of Compensation Motion.). Fourth Corollary: Compensation strategies, decisions, and execution will always appear “unfair” to large elements of those to whom they apply, though often for completely different reasons.

Cafe Classic: Crisis Can Open Door to New & Improved Programs, But Mind the Gap!

Compensation Cafe

As I posted over at Compensation Force: Because crisis is truly a game changer on so many levels, it also provides us with the chance to hit the reset button on ineffective, suboptimal and failed reward practices.

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

Compensation Cafe

There appears to be general agreement among reward professionals that the compensation approaches and protocols which have dominated practice for the last few decades are ripe for reinvention.

Study 60

Growing a Healthy Compensation Program

Compensation Cafe

If you're an HR office of one, busily juggling everything from beneficiary forms to incentive awards, it's hard to believe that you share any pressures with other HR managers. There is a good-sized HR budget, plus the total HR and Compensation staff usually adds up to at least six practitioners who have had enough experience to know what "wellness" looks like. Compensation practices you typically see in an organization of fewer than 100 employees.

Cafe Classic: If You Want. (The Pay Plan Edition)

Compensation Cafe

If you want to spend additional money on employee compensation without generating any impact on outcomes or behaviors, then give employees a bonus based completely on your discretion and tell them only that it is based on your judgment about what they deserve.

Singing, Dancing and Posing: Aligning Incentives, Performance Metrics and Strategic Objectives

Compensation Cafe

How clear is the line of sight between your performance pay programs, strategically linked performance metrics and the organizational strategy? Do your managers see these performance measures as they really are (imperfect proxies for larger, intangible strategic constructs), or do they focus on the performance measures themselves as the ultimate goals? Managers will receive bonuses tied directly to their survey scores.

Cafe Classic: The Compensation Cookbook

Compensation Cafe

Editor's Note: In today's post, Jim Brennan serves up his Classic tale of The Answer to our compensation design and practice challenges. . The Compensation Cookbook will solve all your problems. No compensation chef should be without this essential guide to serve up the ideal menu in your café, restaurant, or eatery . Freeze the pay of the remaining lowest 5% of performers and place it in a Frozen Fund. Office of Personnel Management.

What's Going On Out There?

Compensation Cafe

18% of survey participants offer special pay programs, typically in the form of flat amounts, for those in high-risk roles. This is a well conducted survey covering a point in time that can be confusing and sometimes even disturbing.

AON 63

Employee Compensation: Everything you Need to Know

Astron Solutions

As an HR leader for your organization, you know that employee compensation is not just something you determine when you hire a new team member and then forget about. After all, without fair and enticing compensation, people may start to leave. What is Employee Compensation?

Are HR and Employees in a Dysfunctional, Codependent Relationship?

Compensation Cafe

HR feels like their job is to solve the problems of employees and managers. How often does HR intervene to take over the role of the manager? Employees feel like everything bad that happens is someone else’s fault – HR’s, Management’s, the clients, the market. Base Salaries Compensation Communication Compensation Philosophy Incentives/Bonuses Pay for Performance Performance Management Total Rewards

Cafe Classic: Managers Can't Use Salary Surveys Wisely, and Other Urban Myths

Compensation Cafe

In today's Classic, Margaret O'Hanlon digs into our beliefs about what we can and cannot trust our managers to handle on their own, using the example of a particular company that does things differently. Salary ranges are built by compensation specialists. Managers are, frankly, too self serving to be trusted. When hiring people, managers just want to grab them with money. That's right, they give them survey results.

Growing a Healthy Compensation Program -- Part Two

Compensation Cafe

We'll identify some of their missteps -- common to companies their size -- then discuss what they can do to achieve healthy compensation habits. Case background: In the first article , we looked at the compensation habits of a company called Healthy Gadgets, a new medical device company that began with fewer than 100 employees. In turn, the Human Resource Manager has become more visible to employees and more involved in day-to-day operations.

Stuff Changes

Compensation Cafe

The way things change over time affects almost every compensation situation. She has already surpassed the quota demanded last year.” Performance output objectives valid in prior periods are irrelevant going forward. What do you mean, the CEO bonus plan needs to be modified?” The executive compensation formula acceptable at a small startup operation in its early days before a steady positive income flow has been established may become unconscionable later.

Only Cash Buys the Confidence Needed for Non-Cash Appreciation

Compensation Cafe

Inadequate compensation undercuts the value expected from budget allocations devoted to such things as premium employee benefits, special services and enhanced working conditions. I venture to suggest that attitude surveys showing a lack of appreciation for non-cash entitlements probably reflect an underlying malaise about pay. Money is the basic essential piece of “compensation.” Jim also serves on the Advisory Board of the Compensation and Benefits Review.

If Money Were the Solution.

Compensation Cafe

Compensation would merely be a matter of dispensing the right sums. James (Jim) Brennan was Senior Associate of ERI Economic Research Institute , the premier publisher of interactive pay and living-cost surveys. serves on the Advisory Board of the Compensation and Benefits Review and will express his opinion on almost anything. If money alone could solve all problems, every issue could be reduced to an expense item. Life would be simpler.