What’s the most common benefit of getting a pay for performance system? Many HR experts believe that linking performance with compensation is the best way to attract and retain the best talent while aligning each employee’s individual contribution towards business goals.
That’s true. But if these performance based pay plans are so advantageous, then why doesn’t every organization implement them to increase their business productivity and employee retention rate!
The straight answer is: Since a variable performance plan is used to encourage employee’s performance and reward top performers, it becomes a responsibility to make right use of variable performance plans because their wrong implementation can do more harm than good. It means there is a need to use variable pay plans in right ways. That’s where a reliable pay for performance system comes into play.
Automated Pay for Performance Software
Today, most of the researchers believe that linking compensation with performance is the excellent motivation tool for employees. As employee compensation is the 70% of the total company expense, it is required to be utilized wisely. Using an effective pay for performance tool, like Empxtrack, an employer can skillfully allocate company funds to nurture best talent and avoid overpaying underachievers.
An automated software implementing variable performance plan aims at infusing accountability in the workforce. It helps an employer to:
- create different compensation plans for different employee groups,
- link employees’ performance with their remuneration, rewards & other perks, and
- encourage employees to strengthen critical business goals.
The concept of performance based pay not only focus on rewarding employee’s good performance, but it is much more than that.
Here are some remarkable benefits of implementing a pay for performance system. Let’s have a quick look at them.
Monitor & manage employee remuneration conveniently
Empxtrack’s automated module has simple, well-defined and accurate workflows for outlining basic and variable pay for employees. The compensation can be managed easily using intuitive and configurable processes.
Performance based calibration
At times, manual performance evaluations give inaccurate results due to manager’s favoritism. Implementing an automated software minimizes such instances. The transparent approach to evaluate performance results in accurate outcomes, increased employee engagement and high retention rate.
Growing insight with metrics
Employee compensation analysis becomes extremely easy due to presence of data available in the form of dashboards and reports. Empxtrack pay for performance module present detailed reports for each employee which helps in easy and quick decision-making.
With the growing technology and business, the ways to manage employee compensation has changed extensively in past two decades.
As paper based-performance management is no longer an effective approach, employers are moving on automated merit systems to reward and recognize their good employees. Regardless of the organization’s size, every company can benefit from the automated pay for performance system and align employee’s contribution with business goals.