building the case for change

We believe that

• effective performance management is at the heart of business success
• variable pay is a primary management tool for communicating performance priorities
• improving variable pay programmes will lead to improved business performance
• pay arrangements should be open, fair, consistent and explainable.

Long standing research demonstrates most people care about incremental pay and will adjust their behaviours to earn it. The key for companies is to ensure pay plans encourage behaviours most likely to achieve corporate goals.

There is evidence to link "high-performance" work practices with better business performance. In the area of pay, such practices typically include:

• bonus schemes underpinned by a robust performance management process
• profit share and gainshare schemes
• sales incentive plans and
• employee share ownership plans.

Companies that are keen to communicate with employees about business goals will find pay is a convincing way of getting the message across.

Pay is a lever for companies that have developed a new strategic plan, merged or acquired new business. By changing the behaviours that are rewarded, pay will communicate change. Where pay is firmly connected to the achievement of corporate goals, success becomes more likely.

We can assess the alignment of a company's pay plans to its corporate goals and culture. By identifying gaps in alignment we can develop solutions which will increase the organisational effectiveness of pay.

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