Gartner Research

Rewards in the Era of Performance Management Transformation

Published: 28 March 2019

ID: G00707164

Analyst(s): Human Resources Research Team

Summary

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.

Table Of Contents

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

Conclusion

Recommendations

About This Research

Recommended by the Authors

Endnotes

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