Pay for performance is certainly growing in popularity, as confirmed by Hudson's recently released third annual Compensation & Benefits Report. Hudson's survey, which features the responses of 10,000 U.S. workers, finds that the percentage of employees who say that their company pays for performance is growing, from 35% in 2006 to 41% in 2007. But there is also a telling disconnect between the perceptions of managers and non-managers: 56% of managers say that employees who do a better job get better pay and benefits, compared to only 32% of non-managers.
Other interesting pay-performance findings from the report:
- A belief in the pay for performance connection seems to drive satisfaction. 79% of employees who perceive that their company pays for performance say they are satisfied with their compensation compared to 60% of those who believe that their company does not reward based on performance.
- The higher their income, the more likely workers are to perceive that employees are paid for performance. Only a third of those earning between $20,000 and $40,000 annually responded affirmatively compared to 60% of those who earn more than $100,000.
- Cost of living still dominates many workers' perception of their raises. Half of respondents say that when they get a raise, it is to cover a cost of living increase, rather than based on job performance.
Note that in addition to the press release and executive summary, free copies of the entire report and data set are available on Hudson's site.
Another terrific post, Ann. "Perception" and "belief" are such important words here! I was just reading Dale Carnegie last night, yet another wise and succesful person who understood that "reality is what we make it."
What's so interesting about the findings *you* mention is that the circumstances that drive an employee's positive perceptions are both predictable and maleable.
It seems to me that information like this is just money in the bank, waiting to be used by managers wishing both to retain/reward excellence *and* run a a successful, profitable business!
******************
AB - Thanks for the comment. I completely agree with your conclusion about the circumstances driving employee perceptions. Too often we think that successful reward programs are about design and really they are mostly about good communication with employees. Programs featuring brilliant technical design will go nowhere if employees don't understand and believe them - and that is where the managers play such a key role!
Posted by: http://almostgotit.wordpress.com | June 23, 2007 at 09:28 AM