News Story
PERFORMANCE PAYS
Over one in three (37 per cent) Australian employees’ pay is currently linked to performance and this figure is rising, according to a survey by specialist recruiter Hays.
Presently 15 per cent of employees’ pay is directly linked to monthly performance and a further 22 per cent to quarterly or other performance. This is an increase of 10 per cent since 2001 when 11 per cent of employees’ pay was linked to monthly performance and 16 per cent to quarterly or other performance.
“Many employers believe systems linking performance to levels of pay improve a company"s competitiveness and productivity,” said Grahame Doyle, Director of Hays. “For employees motivated by money, there’s no denying performance-related pay has a definite impact on retention by providing a workplace where performance matters financially.
“This form of pay is often based on achieving or exceeding set Key Performance Indicators, targets or productivity increases. It is often structured through commission, financial participation or bonus schemes and can be based on individual and/or team performance.
“Historically it was mainly the executive team that shared in a company’s success through performance-related pay, but the increased usage of performance-related pay shows more employees now benefit,“ Grahame said.
“However it should be noted that performance related pay is not for everyone. Many people prefer the stability of knowing exactly what their weekly earnings will be.
“Furthermore, salary is just one of many factors in successful retention. Career progression, new challenges, training and development and strong management are all critical to the retention mix. Ultimately, each employer’s retention strategy will be different as it is based upon the motivations of that company’s own workforce.”
1037 people completed the survey. The survey question and full results were:
Is your pay linked to your performance?
Yes - monthly: 14.66%
Yes - quarterly or other: 21.89%
No: 63.45%
In 2001 the survey results for the same question were:
Yes - monthly: 11.49%
Yes - quarterly or other: 16.28%
No: 72.22%
Back to News
