Building a pay-for-performance plan for everyone

Most incentive plans are aimed only at managers or those employees who clearly influence the bottom line. Doesn’t have to be that way.

Your organization can get everyone to have a bigger stake in your profitability. Just follow the lead of this Midwestern company.

The employer was looking to start up a pay-for-performance program to supplement employees’ base pay. The ambitious goal? To create it for all employees.

The way they did it: by creating a “scoreboard” for every team.

The company structured the scorecards so everyone would get a piece of its profits based on how they did in a variety of categories, like:

• revenue vs. costs, and
• customer satisfaction.

Of course, you can’t use categories that are in any way subjective or up to supervisors’ discretion.

The other key component is to ensure that every single employee from the warehouse to the COO’s office understands exactly what has to be done to earn that additional money.

Updating’s another must. A monthly touch-base can help people see how close they are to meeting their goals.

It’s a great way to help each employee see that he or she has an impact on the bottom line — and they’ll be rewarded for doing so positively.

And yes, when times got tight, this company had to make the program “dormant” for a while. But even then it’s had a positive impact: The education from the program got everyone to pull together in tougher times.