Thursday, September 11, 2008

Choosing reward and recognition systems.

No design discussion would be complete without including some design options that make pay and rewards more relevant and effective. Ideas about how to do this typically include:

- Rewarding both work group and individual performance.

- Linking pay levels to the number of skills an employee learns and uses. Skills can be associated with business, administrative, and interpersonal competencies, as well as with technical operations.

- Creating reward systems that recognize not just certified skills and knowledge, but also the willingness to use those skills, and the results of successfully applying those skills.

- Tying pay-for-knowledge with performance planning, so employees regularly contract with others who depend on them based on their joint expectations for future performance.

- Providing individual and group incentives in addition to regular pay, based on exceptional project performance, cost reduction, or other important operating parameters that are within the direct control of the employee or the employee's work group.

- Setting up all-salaried pay schemes to eliminate a "we - they" culture in the firm, recognizing that the company's success depends on equality of effort and contribution by employees at all levels.

When considering these ideas, make sure that pay-for-knowledge schemes reward only the skills employees use on a regular basis and that actually benefit the bottom line. Skill training without sufficient application time to consolidate learning, or without proven certification processes (that include opportunities to explain, perform, and problem solve) will result in paying people for contributions they haven't really made. This will in time encourage exploitation rather than responsible behavior.

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