While most organizations advocate a pay-for-performance culture, economic realities, reduced pay increase budgets, shareholder activism and emerging government regulations are making this difficult to achieve.
According to Mercer’s 2013 Pay for Performance Survey, more than half (55%) of participating organizations report they strive to a great extent to create a pay-for-performance culture for their executives, managers and sales professionals, while more than one-third aim to do so for non-professional sales and hourly employees (46% and 36%, respectively). Yet, 45% of organizations indicate their pay for performance programs need work.
“That organizations are not satisfied with their pay for performance programs suggests that traditional financial incentives – the most common approaches – may be overused in situations or contexts where they are not the optimal choice,” said Brian Levine, Partner and Workforce Analytics & Planning Leader for Mercer's North American Region. “There are several approaches to pay for performance, and some companies may benefit by expanding their view of how pay for performance is implemented and considering other models that may be more effective.”
Mercer’s 2013 Pay for Performance Survey examines pay for performance practices, including overall structure, effectiveness, and talent and reward strategies. The survey includes responses from more than 570 employers across all industries throughout the US and Canada. To find out more about the survey results and enhancing performance management programs, visit http://www.mercer.com/talent.
