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The Best Reward Practices of Successful Companies
Training and communication are critical.
Towers Perrin
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
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Next Article: 3. Ideas Aren't Always Free
Cash and nonmonetary one-time prizes are not clear indicators of employee motivation and can, in the long run, have negative effects on a company.
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