The Best Reward Practices of Successful Companies
A Towers Perrin’s survey released in December called "Rewards & Performance Management Challenges: Linking People and Results" outlined reward system tips from high performing companies the firm defined as those with 3 year total shareholder return and/or earnings growth that exceeds the median of their global industry groups. A total of 1,294 firms in North America, Europe, Asia and Latin America participated in the study.
1. Segment the workforce according to key company functions and high performers:
customize reward plans to target business drivers.
focus on individual performance and those worker ideas or action that impact the bottom line.
strike a balance between absolute contributions and relative performance.
2. Look at the management of performance and rewards holistically.
the reward models should be part of an overall company system.
understand the cost and value of every program.
strike a balance between fixed and variable rewards.
3. Training and communication about the reward program across the company are critical.
employees should understand every aspect of the reward system, everything from its design to implementation.
managers should be given extensive information on how to manage the reward system.
Workforce Management, April 2004, p. 46 -- Subscribe Now!