Tie Employee Compensation to Achievement, Experts Say
Just as you have risked everything to build a successful company, everyone you employ should have a portion of their compensation that is “at risk” — not guaranteed, but rather dependent on the fortunes of your company, according to some industry experts.
The reason, they say, is simple: when a portion of their pay is riding on your company’s performance, then everyone in the company has a tangible stake — an incentive to do their best for your business.
However, less than a third of workers who indicated they wanted tangible rewards — whether it’s a special event, cash bonus, gift or plaque — actually receives them. More than half agree that company recognition (or lack of it) affects their job performance, according to a recent online poll.
“Home builders are placing more emphasis on bonuses as a means to compensate employees,” said Robert Rivinius, CEO of the California Building Industry Association, which last year commissioned a survey of compensation in that state. Forty-four builders with more than 12,000 employees participated.
Experts in developing compensation plans for home builders say the amount of money devoted to incentive compensation will differ according to a company’s structure, culture and the “level” of a particular employee within the business’s hierarchy.
Compensation Guidelines Available in NAHB’s BizTools
Want to learn more? General guidelines about the future of incentive compensation, some mistakes companies have made and areas to consider when developing compensation-reward plans for employees are available in the BizTools section of the NAHB Web site, available to NAHB members only. To read more about compensation programs, click here.
To view other resources available in BizTools, visit www.nahb.org/biztools.
Builder Input on Employee Performance, Evaluation and Compensation Wanted
NAHB’s Business Management Department and Publications Work Group is gauging how much builder interest there is in performance evaluation and compensation strategies. To assist, please complete the department’s short survey by clicking here.
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