In the last few years more and more companies have made the decision to move away from the big, annual performance review to more frequent, informal conversations about performance on the job. But the biggest question I’m hearing is “what happens to our compensation decisions?” After all, most of the time those two activities are deeply intertwined, so what’s the deal?
In the short video below I release some of the preliminary findings from a new research study I’ve been running on this topic. The short version:The most common method for employers to award pay is by giving managers discretion over a budget for their team
- The second most common method is going straight to market rates, letting an objective salary benchmark be their guide instead of dealing with subjectivity in the process
Check out the video below (subscribers, click through) for more details and a key principle for helping your firm transition to this process without getting in trouble for improper pay decisions.
I’d love to hear from you. Does this resonate? Has your company changed its approach? How is it working?