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The company gives to its performers

Ashley Milne-Tyte Dec 14, 2007
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The company gives to its performers

Ashley Milne-Tyte Dec 14, 2007
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Doug Krizner: If you’re hoping for a fat pay raise next year, early indicators don’t appear to be so encouraging. Management consultant Towers Perrin says corporate salary budgets are expected to go up an average 3.9 percent. That’s the same reported for this year.

Don’t despair: An increasing slice of the salary pie is not included in those figures.
Ashley Milne-Tyte has more


Ashley Milne-Tyte: More and more companies are supplementing employees’ regular salaries with pay-for-performance.

Ravin Jesuthasan of Towers Perrin says financial services firms have long paid out bonuses for good performance. But in recent years, even union employees have begun to see a portion of their pay tied to how well they do their jobs.

He says the shift reduces fixed costs for employers. And linking pay to performance has advantages for both sides.

Ravin Jesuthasan: Because in one fell swoop, you send a message to the broad workforce and to individuals as to what is truly valued by the enterprise. And you actually give them a stake in that success.

But what if you’ve always felt your manager has it in for you? Jesuthasan says companies are getting more rigorous about how they measure employee performance, so personal biases don’t get in the way of someone’s bonus.

In New York, I’m Ashley Milne-Tyte for Marketplace.

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