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Performance-based Incentives Pay Big Dividends

Performance-based Incentives Pay Big Dividends

By | 07.03.13
Performance-based Incentives Pay Big Dividends

According to a new study conducted by Kelly Services, employees believe they are more motivated and their productivity improves when salaries and bonuses are linked to company performance and success. The study was conducted in 31 countries with over 120,000 responding. Within the framework of the study, performance-based pay includes incentives such as commissions, profit sharing, or bonuses for meeting or exceeding performance targets. Among the companies surveyed, almost a third utilize some form of performance-based structure.

The senior vice-president and general manager of Kelly Services U.S. operations, Steve Armstrong, offers, “There are many employees who are clearly confident in their ability to perform their jobs well, and they want the opportunity to be compensated according to their performance,” This view indicates a clear link between the impact of incentive-based pay and worker interests on productivity.

Another revealing trend from the study showed that while fewer than forty percent of the employees surveyed do not believe their wages reflect their productivity, Armstrong says, “Employees can benefit from the opportunity to work smarter and raise their earnings capacity, while employers benefit from increased productivity and a more engaged workforce,” creating a “…win-win situation.”

The study also showed that among companies providing performance-based incentives for technical and professional employees, the highest rates were found among those in sales and marketing, and those in the sciences and education had the lowest.

Reference:

Brooks, Chad. “The Reward that Makes Employees Work Harder.” BusinessNewsDaily, June 25, 2013.

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