Workforce Performance Solutions - May 2006 - (Page 34)

WP0506_A.qxd 4/27/06 1:43 PM Page 34 Strategic Alignment STRATEGIC COMPENSATION: Pay for Performance Kevin Dobbs Workforce alignment, the concept of align- ance for tens or hundreds of thou- sands of employees across large ing the contributions of individual employ- global companies is nearly an impossible task today. Complexity in ees with corporate goals, is one of today's compensation processes creates hottest business topics, on the mind of apathy among managers who do not see themselves as compensa- every business manager from the CEO to tion experts and instead take the path of least resistance. the HR director. Yet for all of the urgency Hence, the companies use the associated with workforce alignment, many peanut butter approach to compen- sation distribution, spreading merit organizations are stymied in their attempts increases, bonuses and stock to achieve it. options equally across the employee population. Top performers are not May 2006 given rewards commensurate with their contributions, and under-per- Pay for performance plays an essen- while others are awarded bonuses, formers are over-compensated. raises and stock-option grants com- tial role in achieving workforce align- mensurate with their rating. ment. Many leading companies Shockingly, the peanut-butter WORKFORCE practice this compensation manage- approach is used in company after Unfortunately, although most organ- ment discipline with varying degrees company, where employee-related izations profess to subscribe to pay- of success. Typically they rate their compensation spending consumes for-performance philosophies, many managers on a bell curve annually, up to 80 percent of each operating simply cannot execute. There is a performance SOLUTIONS assigning an overall performance expense dollar, according to industry broken link between senior execu- rating from Exceeds objectives to tives' desire to differentiate pay research. This reality practically Does not meet objectives. At many based on performance and line screams for a pay-for-performance managers' ability to do so. Relating companies, the Does not meet solution that keeps compensation compensation to individual perform- objectives generally have to go, expenditures in line with the allo- 34

Table of Contents for the Digital Edition of Workforce Performance Solutions - May 2006

Editor's Letter
Table of Contents
Change Management
Human Performance
Strategic Alignment
Advertiser's Index
Editorial Resources
Full Potential

Workforce Performance Solutions - May 2006