a result of our consulting and research experience, Pay
People Right! Breakthrough Reward Strategies to Create Great Companies
outlines six Reward Principles that great companies believe result in the
successful alignment of total rewards and total pay with their business
Create a positive and natural reward experience.
must take care, early on, to communicate and educate people on the
reasons for changing rewards and the advantages to the workforce and
company. Involve people in the change process to gain their
understanding, acceptance, and commitment.
Align rewards with business goals to create a win-win partnership.
the company and people need to gain from the relationship. People
who contribute to the organization achieving goals share in the
success. To ensure a balanced win-win partnership, the company must
provide clear direction, people must continue to add value, and the
company must acknowledge their value with rewards.
Extend people's line of sight.
people in extending their line of sight to how they influence the
results of their team, group, business unit, and company. Engage
people in understanding how what they do affects the customer and
how they can adapt to evolving customer needs. Ensure that everyone
is a knowledgeable stakeholder in overall success.
each reward tool for what it does best. Take an overall perspective
of not only total pay but also total rewards when determining
rewards for people. Create a customized better workforce deal from
Reward individual ongoing value with base pay.
base pay to reward three dimensions of individual value: (1) the
skills and competencies needed by the company and used by the
individual to generate results, (2) the individual’s consistent
performance over time—whether individual contributions or
contributions to team results, and (3) the individual’s value
relative to the labor market.
Reward results with variable pay.
bottom line is that the company needs results to meet shareholder
expectations and provide a compelling future. By rewarding the
workforce for achieving results, variable pay (cash and equity)
creates stakeholdership and a win-win relationship between people
and the company so that both share in success. Variable pay is best
suited to reward results because it is agile, flexible, adaptable,
responsive, and able to focus on key measures of success.
Zingheim, Patricia K., and Jay R. Schuster. Pay People Right!
Breakthrough Reward Strategies to Create Great Companies. San
Francisco: Jossey-Bass Publishers, 2000.