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Making the case for a CP Plan

Jill has been asked by the network director to look at linking annual pay

reviews to her performance management system. To date managers have

been given a pot of money and granted pay increases on a rathersubjective basis.

Jill has advised the network director that defining good performance or

otherwise is quite a complex exercise. Much work needs to be done to

ensure targets are apportioned fairly. Any system must be perceived as fair

by staff. Jill is very aware that the current system ,option two described in

this chapter , is considered unfair.

Jill believes it should be possible to introduce a more credibleperformance related pay system because:

Job objectives and job requirements are clearly stated

Managers are becoming more proficient performance managers.

Jill has learned the lesson of introducing things inadequately. She decides

to bring in outside expertise to help her design an end of year report form.

The form will be based on options one and two described in the chapter.

Once this has been done she will arrange for the network director to pilotthe approach with the branch managers. If this is successful they can

consider extending the process to all job grades.

The network director and Jill now involve Jim in the early stages of new

projects. They have found operational management input helpful. Jim has

always had misgivings about the subjective award of pay increases and is

keen to help. He will prepare a set of guidelines to help appraisers exercise

discretion when considering an overall grading. Jim will also help the

finance department design the target apportionment methodology.

Jim is comfortable that the network director and most of the colleagues

will be able to work with a part objective/part subjective system. The key is

to control the subjective element by issuing clear guidelines.

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Bert benefitted from his branch managerial experience. He has become

a better listener and is now more questioning. He also believes the old

subjective system of pay award was wrong, although he did rather enjoy

the power it gave him. Nowadays he breaks out in a cold sweat when he

remembers how he used to have favorites and award them more money.

Questions

If you are granted pay increases linked to your performance,

how is this done? Is the system inflexibly linked to outputs, just

about right.

There is a school of thought that believes linking performance

related pay awards to a performance management system

should be avoided. Do you agree? If yes show how you would

justify performance related pay awards?

Why do you think organizations adopted performance related

pay award systems rather on service?