Don’t kid yourself; organizations don’t dangle bonus payments or incentives in front of employees without the hope of performance above and beyond the expected. As tolerance for errors decreases and performance standards rise, the outcomes defined as exceptional performance approach the impossible.
So why have some professions consistently had significant variable pay components and others none? Why do banking executives need an exorbatant bonus to work to the best of their ability while pilots or teachers manage to do the impossible on far less pay? As the demands for productivity and wealth creation fall on all employees, perhaps we need to rethink our out-dated compensation systems.
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Filed under: Perspectives and Trends
