Renée Warren's Blog

Pay-for-performance: No longer for Sales people

July 31, 2008 at 1:54 pm Leave a comment

Base plus commission is the typical form of compensation for sales people. It is widely used because it leads to higher sales. The more sales one makes, the more they earn. But this form of pay-for-performance should not be limited to sales employees. Everyone in the company, especially the marketing department should be compensated on a job well done. Yearly bonuses are good, but that merely reflects how well the company has done over the course of the year. Individual compensation for achieving certain objectives should also be a part of your small business culture.

Pay-for-performance is a key method to align employees’ objectives with your businesses objectives because it associates rewards to performance. Like a dog earning a treat for good behaviour, your employees should also be rewarded for achieving their goals.

“Most employees become more engaged and motivated by understanding how their daily activities help drive overall business health; this unquestionably results in both individual and company-wide success,” explains an article from Success Factors, People Performance Insider Series. The use of pay-for-performance ultimately leads to greater employee motivation, improved retention, and cost savings.

If you are looking into ways to help motivate employees and achieve overall company objectives, consider implementing a pay-for-performance system. It can certainly help with both short term and long term individual and company wide objectives.

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