Performance based compensation is the variable portion of the total compensation and is paid when performance criteria are met or exceeded. Companies often tie variable compensation to individual, team or company targets. Such compensation allows companies to influence employee behavior so that they meet the specific company objectives. Creating effective performance based compensation plans can be very tricky. Here are a few things to keep in mind when you designing rules for your variable compensation.
Performance management is no longer an annual event. It has become a continuous project, with or without performance management software. The need to evaluate employees regularly especially in terms of goal achievement has become vital for all companies be it big or small. Mentoring is also an integral part of any employee’s development and performance management plays a very important role in gauging the need and extent for coaching and guidance. However, performance management in India is still in an evolutionary stage facing multitudes of challenges.
Employee motivation is a tricky subject for most managers and organization heads. Yet it is imperative for them to handle employee motivation diligently since it forms the core for organizational success. Employee Motivation essentially means developing effective ways to recognize and applaud the contributions of your employees whereby they are encouraged to perform better and contribute more productively to their organization.