- While performance-based pay is generally structured as part of an employee’s compensation package, there are tools available to help track goals, performance, milestones and more that can support pay values but are also part of a complete rewards and recognition platform.
- Companies can create customized platforms to centralize the performance management process and define the incentive requirements, which also folds into an overall rewards and recognition program.
Performance-based pay is varied in its structure in many organizations. Certain roles are designated as strictly based on a commission-style compensation, meaning whatever you secure for the company of a monetary value, whether it’s selling goods, selling services, or generating a business contract of value, the employee will be paid a determined percentage of the value as compensation. In other organizations, there may be a hybrid of this type of pay structure, with a base salary for employment and commissions paid on top of that at certain intervals tied to performance. Still more, there are bonus-payment structures that often apply to a whole company on a tiered level. Depending on your role in the company, you may receive an annual bonus payment that is based on the overall (successful) performance of the entire organization and if you met certain criteria for bonus eligibility that year, whether that be length of employment, a satisfactory performance review, a service milestone, etc.
Yet, when it comes to a comprehensive rewards and recognition program, performance-based pay will not, and should not, replace the practices of well-deserved recognition of employees, but can be viewed as in-addition-to the overall employee experience.
Tracking performance to help determine pay scale
There are software programs and applications that help an organization keep track of sales to determine the pay scale of a performance-based compensation package. In our previous blog, we discussed that function traditionally being part of a company’s HR department, Sales department, payroll, etc. However, even if tracking sales and performance is tied to pay, there are tools that are hallmarks of an employee rewards and recognition program that can also help organize and maintain performance review data, provide feedback, set goals, manage milestones and more, all of which can be used as supporting documentation to compensate an employee.
For instance, MaestroONE is geared towards creating an environment of feedback, engagement and goal setting for team members. Through this tool, employees and managers can collaborate, provide real-time feedback on performance and oversee all steps in a project to manage successful outcomes. It is a convenient platform that can aid in decision-making when it comes to bonuses, merit increases and incentive rewards for an employee. Plus, it can apply to everyone in an organization, regardless of role classification and compensation type, thus increasing its inclusivity leverage and capability for employers to recognize the hard work of their team consistently.
Incentive Sales programs predicated on recognition
While sales numbers and revenue gains tied to a person’s performance can determine the structure of performance-based compensation, some organizations also take into consideration other factors of performance that might not have a dollar figure associated, but should be recognized and compensated for.
Indicators like customer satisfaction, milestones, training and more can factor into an incentive program that is built into a comprehensive R&R program. An experienced R&R provider can develop a customized solution for a company based on their own unique requirements that will bolster the employee experience, in addition to being tied to compensation or increased revenue that affects pay scales.
Rewards and Recognition Tools to Solve Multiple Challenges
At Madison, we maintain that a true employee rewards and recognition system will always celebrate employees for the work that they do regardless of the pay structure and bonus package they enjoy. You can have both for a positive employee experience. In fact, the tools and customized programs available through innovative R&R providers can often work in tangent to deliver the most optimal outcome for your team: to be compensated with a good living for the productivity they bring to the organization and to reward and recognize each individual for what they do to make a company successful every day.
At Madison, it’s not business as usual, but instead, we are focused on support. Supporting our invaluable customers by maintaining business continuity, sharing advice about new working models and providing an opportunity to connect with others.
While you adjust to your new working routine – whether it be at home or part of an essential service - please join the conversation. Ask Madison is an opportunity to share ideas, ask questions and help create our ‘new normal’, together. We believe that employee recognition is an essential business function and that, now more than ever, it is our responsibility to celebrate each other, recognize every milestone and collaborate together—even though we may be sitting apart.
Have a thought on this article, share your comments and share this post using one of the social media links. Have a question? Ask Madison by emailing firstname.lastname@example.org or leave a comment below.