Published: 28 March 2019
Analyst(s): Human Resources Research Team
Traditional pay-for-performance systems inadvertently focus on small differences in performance, resulting in incremental pay differentiation decisions that do not improve employee performance. The best total rewards leaders focus on larger differences between top contributors and other employees.
New Demands on Pay for Performance
Our Pay Transparency Research and Findings
3 Components of Successful Pay for Performance
1. Assess Who Contributes Most
2. Differentiate Pay Between Core and Top Contributors
How Much Differentiation Is Required?
Table 1: Psi Corporation’s Compensation-Planning Guidelines for Managers
3. Explain Pay Decisions Through Narratives
Table 2: Pfizer Components of an Effective Narrative
About This Research
Recommended by the Authors
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