Tweet

Pay for Performance - in this Economy?

Written by: G.J. Miller

Article Overview: Yes, especially now! There are three potential mistakes organizations can make when there is a downturn in the economy.

Pay for Performance - in this Economy?

Three potential mistakes organizations can make when there is an economic downturn;

Freeze Salaries:

Give up everything but that which contributes (economically) to getting the sale and paying your top performers. I don't care whether it is a for profit or not-for-profit organization, you need to think a little differently in order to keep up morale and productivity and retain your key people. Identify the folks that are working hard and staying committed and give them a salary increase. Top performers tend to be the smallest group in any organization. Identify them and pay them. Here's the formula, [2% of payroll = 0% to 4% in pay adjustments] as long as you identify the poor or marginal employees and give them nothing. Average performers get 2% and people exceeding expectations get 4%.

Give "Across the Board" pay adjustments:

Give everyone the same increase. This will only serve to make your top performers question their sanity. Why are they working hard when they get the same amount as the slackers? And they know who they are. Too much of this will drop your productivity across the organization or key people will go where they will be recognized.

Assume other organizations pay the same:

Pay is more than an hourly rate. It's important to know all the factors in your competitors pay plans and practices. You need to know so that you can feel confident people will not get a lot more money for changing jobs. Turnover costs a lot of money (2 to 3 times the leaving persons' salary). If an administrative assistant feels he/she has not been treated fairly and leaves that can equal between 40 and 60K, and that is just one person. The cost in time and dollars to participate in a survey and know? Relatively speaking, priceless.

Related Articles
  Why do you need Key Performance Indicators?
  How to manage and motivate a team
  A Tough Economy Can be Good for Your Career
  Stop Using the Economy as an Excuse!
  Newsworthy Trends in Franchising

Article Tags: administrative assistant, changing jobs, economic downturn, hourly rate, leaves, marginal employees, money, morale and productivity, nbsp, payroll, profit organization, salaries, salary increase, sanity, slackers, top performers, turnover costs



Related Forum Posts
ARTICLE: Performance coaching in the workplace - To create lasting performance change it is necessary to first understand the positive and negative influence that a person’s personal behaviors has on their execution and what impact these have on their ability to achieve success. Only when we fully understand a person’s behavioral patterns and create positive self-managing coaching strategies can we assist a person to create lasting performance change. The vast majority of employers believe coaching can deliver significant benefits to both individuals and organizations. The majority of employers plan to increase the use of coaching over the next few years, according to a new survey by the Institute of Personnel and Development. Nearly nine out of ten interviewed companies expect their managers and supervisors to deliver performance coaching as part of their day-to-day work. In another large industry-wide study it was found that most managers reported that they were confident in their ability to coach. However, the study also showed that the managers’ actual skills levels as coaches were typically poor. As a consequence they were not nearly as effective in their coaching as they believe themselves to be. Often times, they believed that coaching consisted of just providing 1-to-1 instructional feedback to their staff members on what to do in a given situation to perform better. Many recent studies have shown that technical skills only represent at best 20% of the contribution into our performance. The remaining 80% comes from our ability to choose or make a decision, assertiveness, commitment to grow, ability to concentrate, honesty, optimism, persistence, ability to perform well under stress and so on. These traits are commonly called our soft skills or attitude. Few managers understand just how deeply rooted their own behavior patterns are, let alone how to positively change them in other people. Performance coaching is frequently confused with other types of coaching, such as Executive coaching and Life coaching. Performance coaching is a form of Directive coaching. Executive coaching and Life coaching are both forms of Non-directive coaching. Directive coaching is usually more suitable for a manager who sometimes acts as a coach. Performance coaching in the workplace has developed immensely from what it was only 4 years ago. To choose the right coach will make a huge difference. You also better make sure to know what you want. If your coach knows what (s)he is doing – you will get on your way to get it! [i:38tu5pgr]- Peter J Karlsson[/i:38tu5pgr]
These maybe the coldest franchises out there: - Here are the worst 15 performing franchises in regards to having the highest Small Business Administration (SBA) loan failure rates. The list is dotted with sub sandwich shops, fitness centers and car shops. WORST FRANCHISE LOAN FAILURES Failure % 1 OBEE'S SOUP SALAD SUBS 55.56% 2 LADY OF AMERICA 41.94% 3 COUNTRY CLUTTER (BED & BREAKFAST) 41.18% 4 COPY CLUB 36.36% 5 ALL TUNE AND LUBE 35.71% 6 PICKERMAN'S 35.71% 7 PHILLY CONNECTION 35.59% 8 ROLY POLY ROLLED SANDWICHES 34.78% 9 COTTMAN TRANSMISSION 34.48% 10 HAIR COLOR EXPRESS 33.33% 11 LEE MYLES AUTOMOTIVE TRANSMISSIONS 33.33% 12 GODFATHER'S PIZZA 33.33% 13 SMOOTHIE FACTORY 33.33% 14 BLIMPIE 31.39% 15 GOLF U.S.A. (RETAIL GOLF EQUIP.) 30.77% Source: Small Business Administration, SBA Loan Performance Within Franchise Code for the Period of FY 2001 - 2005
Success Strategies - How to get the results you want now? Success Strategies and Action Steps I have used are: The Power of Choice Where you are at this present moment, is exactly perfect from the choices you have made. If you want to be somewhere else, you have to decide clearly what that is (your goal/outcome) and create action steps to achieve this. The Power of Focus The book "The Power of Focus" by Jack Canfield, Mark Victor Hansen and Les Hewitt, is one of my treasures in my Entrepreneur Library. If you focus on what you want versus what you do not want, your conscious and sub-conscious mind will direct attention to this. The movie, What the Bleep, Down the Rabbit Hole, explains this in detail about quantum physics and what we create in our lives. The Power of Commitment This is not about commitment to others. The first step is the commitment, your word, you make to yourself. Accountability and responsibility are additional success strategies and ingredients to creating the success, defined by you, that you want. The commitment to others reflects your integrity, your word and the team you work with. Co-workers, clients, yoru family, friends and community. My Success Acronyn in Success Breakthroughs(c) is: S pecific & self-directed U nlimited opportunities & possibilities C reate powerful outcomes C onsistent measureable results E xperience pwoerful transformation S olution and action-oriented S uccessful habits and outcomes Break Through to Powerful LIfestyle & Performance Choices Moira
HRPreneur - Hi everyone, I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's. Below is a summary about HRP; Who We Are: HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company! Mission: HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate! Vision: To inspire and warrant SME's reach their full competency! Cost Effectiveness: We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone We will provide you additional cost efficiencies through our services Services: • Strategic Human Resources Planning • Organizational Redesign • Change Management • Organizational Culture Development • Employee Engagement Programs • Leadership Assessment and Development • Compensation Design • Talent Acquisition • Assimilation and On-Boarding • Performance Management • Talent Management & Succession Planning • Human Resources Due Diligence • Human Resources Audit • Full Service HR Outsourcing
Re: New member from the USA - [quote="Mal Tindle":rpz5ne6d][quote="Ethical":rpz5ne6d][quote="Mal Tindle":rpz5ne6d]Hi Ethical, Welcome to the forum, it's good to see new people getting involved in any forum and you have picked one of the very best. I haven't been a member too long but am a regular now because of the support and resources available here which are most impressive. I see you work in the recycling of ink cartridges and I wish you well with that and attracting traffic to your site. best wishes, Mal.[/quote:rpz5ne6d] Thanks for your welcome,Mr.Mal,are you located in the USA,or the UK o'GB.or some other locale?,and if may I have your permission to ask,What kinda(kind of) entrepreneurship are you involved with?,as anything in life,education,and correct info...is the key to success,and Profesional forum attendance,is enlighting.Thanks again for your welcome.[/quote:rpz5ne6d] Hi Again Ethical, Thank you for your reply, I live in the UK and don’t have a product as such to sell like you but I am an Internet Marketer and owner of the ‘Work From Home Gems’ site below. I specialise in finding and recommending different ways to make money on the internet as an affiliate. I very much enjoy working in this sector and hope to work full time from home in the future. Don’t forget to set up your signature as recommended by GT above as this is a simple way to ad the URL of your website and this will show on every post you make, best wishes, Mal.[/quote:rpz5ne6d] Howdy (Hi and How do you do,in Texan): I'm currently working from home,and with My lifelong ltd. business experience(which is not as limited ,As I humbly stated ,I hope to utilize (utilise in British English),some knowledge to help me be somewhat successful.('California is a "brand new game" to many outsiders,inc. a West Texan ,like me,but I somehow managed above expectations). My ambition at this stage of my life(being formally retired),isn't like when I was younger,and accomplished a lot,'way beyond my ltd. means', as I met with a lot of small and big successes,as I didn't had the luxarious option of losing or failing,in order to survive,I had to'make it'. In today's USA Economy and it's negative implications on all of retirees(pensioners) and disabled folks, It became vital to be able to function with some amount of success...or face hunger,if not worse,in the USA we have a 'nation' of homeless folks,that are unaided.most of them are either disabled,or 'senior citizens',or both. so failure is not an option,currently I live in Southern California,which is controlled by an inhumane and dishonest Reublican governor,that cut income from both disabled,and the aged disabled(With false excuses) .while cost of subsisting here is skyrocketing without price controls.so any ltd. additional income is a 'blessings'.Our country economy,as the whole world is already aware is continue to fall,(I was extremely surprised,like many others) that our country borrowed huge amounts not only from its allies(like the UK of GB, UAE,Kuwait etc.) but also from the P.R. of China(ain't it amazing,it's the greatest 'accomplishment' of the previous Bush administtration),It was done prior to our current wonderful president Obama times,But Obama administration was really honest and transparent about these facts,and additionally acted in the best interests of our country,and improved our country situation so dramatically,so at least we're hopefull.The Praises that our current administration deserves are long.Folks like me try to cease any opportunity to survive ,I'm not aiming to'make a killing' but just survive the onslought ,and 'so far so good',I already started on my own to reach to local pro.(professional)folks,that I had the pleasure to know,and there are real hopes,I already sold on my own 1st ltd. batch of 'virgin'(only one time used) 'empties' (Empty ink cartridges),and even earn already a minor sum of 'income',and time'll tell.My honest belief is just as long as one could act rationally there 're hopes for positive results.Thanks for support and advice,I may put the website into my signature a little later,meanwhile ,I'm so busy just 'to keep my head above waters'.Thanks again.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Working Across Borders

Web Design in 30 Minutes - Can this be Right?

Here's a great ROI

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.