Pay for Performance Strategies

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					            Best Practices in Pay for Performance

 “Ownership” of performance management by line managers. How
  managers handle performance management is a key to system effectiveness. They
  need to take control.

 Training for both managers and individuals being appraised. Both
  managers and employees need to understand the process, their roles, and the skills
  and behaviors important to the process. This training also contributes to the
  accuracy of the ratings

 Leadership by top management. Executives need to demonstrate their
  strong commitment to the performance system and to the importance of high

 Performance goals that are driven by business strategy. Most of the
  agencies rely on individual goals with explicit ties to the strategy. The best
  practice relies on goals jointly set by managers and employees. The linkage
  helps justify the ratings.

 Ongoing feedback from managers. Employees should receive regular
  feedback on results and performance throughout the year.

 Use of competencies, development planning, and assessments of
  how individuals achieve their results. The feedback should also focus on
  the individuals’ strengths and weaknesses and involve development planning to
  improve future performance.

 Ties between financial rewards and performance ratings. In order to
  manage the budget for pay for performance, managers need to differentiate among
  their employees.

 “Calibration” meetings for managers to compare ratings. When
  managers meet to discuss performance ratings, it strengthens the credibility and
  validity of the ratings and reinforces the perceived importance of the process.

*Dr. Edward Lawler, Best Practices in Performance Management.

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