Pay Philosophies

Miriam George · December 2005

I am interested in knowing how many of you "buy into" (or follow) Deming's philosophy of detaching pay and performance?
And, if the two are truly detached in your organization, how do you keep your high performers motivated?

pork1 · December 2005

Miriam George: We are strictly "pay for performance"! We did away with cost of living increases or annual % increases. If one wants an increase in our company in any position one had better be producing a product or service worthy of the amount being reward for great performances. We bufdget on a 3% but the managers are informed that they have the ability to split that amount up and give the dollars to whoever they want to and it must be supported with a equalent evaluation for the period covered.

I hope this helps.

PORK

Wildsporty · December 2005

We give an across the board increase to everyone about 3% every January.

Now if you are a good performer you might get a merit increase and/or a job title change. This is usually another 3 to 5 % and is determined by the CEO. (with manager's imput)

We use training a lot. If you are good at what you do and wish to excel in your job we will pay for training so that you can reach the goals you have set forth. Every employee is expected to set goals in January for the new year and twice a year they are reviewed with their manager to see where they are at in reaching the goals.

We also have awards ceremonies at our staff meetings and we reward those that excel above and beyond and also service awards for loyal service with gift certificates.

We have an annual Christmas Dinner at an exclusive clubhouse for employee's and spouses. Dress up dinner.

We have an annual Company picnic for the employee's and their families.

We have an Aim bucks incentive system that rewards them for jobs well done.

We have group lunches once a quarter within the departments as well as department gift exchange meetings with Pizza or Lasagna catered for each department during the holidays.

We pay 100% of the employee's insurance Medical, Dental, Life, STD and LTD. We pay 70% of the dependent coverage for the same insurances. We put in 500.00 for each employee and 1000 for a family into an HRA for wellness and vision coverage.

We make our employees all feel as if they are important to the company. There is an open door policy, a private imput line on the computer and easy access to our CEO.

We hold meetings and get imput from the employees on company issues such as insurance and 401K.

We match 401K 150.00 a month dollar for dollar. We also give our employees a very generous PTO time and we allow them to put unused days into thier 401K Plan.

We like our employees and we have very high retention. Most of our employees have been here 5 years or longer. I have been with the company 23 years.

Shirley

Down_the_Middle · December 2005

Ditto on Porks' scenario 'cept for the last sentence. We link the two together.

Gillian3 · December 2005

With all due respect to management guru's who have theories about this and that, I think that employees will link pay and performance no matter what you do, even if you give pay increases in January and performance appraisals in June. Theories don't overcome human nature.

hrdir03nafcu · December 2005

I have to confess I'm not familiar w/ Deming's philosophy as to de-linking pay and performance.

But I'm strongly in the camp of those who DO link pay to performance. In fact, we have sought to double the impact of performance on pay by implementing a program of merit increases and separate performance incentive ("bonus") pay-- both of which are linked to the EE's overall score on their annual performance review.

Anyone scoring less than "3" (or "satisfactory") overall on their performance review gets 0% merit increase and $0 performance incentive pay. BTW, we do not give an across-the-board COLA to EEs-- only the merit increase, which is directly tied to performance.

Our philosophy behind this is that we want to give as much reward as we can to our high performers, and we do not see any reason to provide any reward to those who do less-than-satisfactory work.

However, we do not rank EEs competitively against one another in performance reviews or merit increases/incentive pay. It is possible (well, we can dream, anyway!) for every single EE to score a "5" on their review, and thus get the maximum merit increase.

crawfod · December 2005

I think the key to any pay for performance plan hinges on clearly communicated, measurable, attainable, and realistic standards for employees that competently trained, non-biased, fair-minded supervisors can administrate. There's nothing worse than someone trying their best and, in their minds, achieving the expected results, only to see the lesser performing friend of the supervisor receive the higher pay increase.

Pay Philosophies

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