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Rewarding Performance

Recently, organizations have been turning to “pay for performance” as a key building block to drive organizational success and build a performance-based culture. This is a culture driven by linking organizational goals to individual goals to motivate and reward good performance. Many companies have “merit” pay systems that do little to motivate employees to perform better and to differentiate employees who are high performers from those who are just getting by. With a performance management system in place, the ability to truly “pay for performance” becomes a realistic and desired goal.

  • Individual Merit Increases/Discretionary Bonuses
  • Pay-for-performance approaches generally take the traditional form of individual merit increases and bonuses, particularly for management employees. The differences come into play when performance standards and goals based on measurement are used as the primary criteria—not subjective, undocumented opinions of supervisors.
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  • Group Performance Bonuses
  • Becoming increasingly popular in pay for performance is the group performance approach that typically consists of functions/departments setting group goals and rewarding performance on the basis of group and team accomplishments.
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  • Non-Financial Recognition/Rewards
  • Having an effective employee recognition/rewards system can be a very important way of improving all aspects of employee performance. It gives the manager a powerful tool to encourage the employee to repeat behaviors that meet or exceed expectations and helps insure that those behaviors occur more often. back to chart >
 
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