How to answer pay for performance questions when employees don't perform

by on June 11, 2009 · 0 Comment POSTED IN: HR Info Center

Measuring pay for performance is easy. Explaining why they didn’t get the bonus is hard.

“I didn’t get my pay for performance bonus because there’s no way I could influence results. Why did you set it up that way?”

Well, pay for performance bonuses, to be honest with you, are often more a reflection of group performance. If we don’t achieve more than expected as a company, and we don’t make more profit than expected as a company, most bonuses can’t funded properly. And if they’re not funded properly, your individual component of that isn’t near as important.
If we’ve done all the things on the big picture, then, you know, your smaller portion of the thing kind of kicks in. But most good bonus structures are going to have 65%, 75% of the emphasis based on group pay for performance in which you could influence, probably more than this was indicating but not on a one to one basis.

“The team incentive idea is unfair. I did great but all those slackers on my team caused me to lose out on my pay for performance bonus.”
Okay, great. I don’t know what you want me to tell you there but, you know, you’re tied together. Team performance is tied to individual pay for performance bonuses

“Last year, we did great. This year, we increased the pay for performance bonus criteria dramatically it’s almost like we’re being punished for doing well. We’ll never hit these new goals.”
Yeah, that’s kind of the way it works. You know, we kind of get used to a certain threshold with pay for performance and we now expect that the following year. Pretty common, wish it were not so in some cases, but it’s pretty much the way most people do it, most companies do it. We’re all built on a growth model and you know, it’s, “What have you done for me lately and how do we continue to grow the organization?” So, that’s part of being part of management because most bonuses come from management.

“I know I’m working off-site three days a week this year but why did my – why did you decrease my salary? I do about the same amount of work.”

Usually that’s – a company doing that kind of thing is trying to cut costs. And they’re trying to, you know, sell the idea, in this case, that being at home, not having to, you know, go to the Laundromat or, you know, buy expensive wardrobe on those days is going to save you money let alone the drive in, drive out. There are some costs associated with them getting set up and everything else.

This looks like a way for that company to try to make it through difficult times or new times. And they’re sharing the pain a little bit with you in that reorganization. Reality is you’re probably doing okay. But that’s the reality.

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