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Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
Bang on target? (performance-related pay)
Article Type: Abstracts From: Strategic Direction, Volume 24, Issue 8.
Rowley D. People Management, 7 February 2008, Vol. 14 No. 3, Start page: 36, No. of pages: 3
Purpose points to the suspicion that many senior managers’ performance-related pay schemes are not based on accurate assessments of performance. Asks if the critics of performance-related pay are right or if these pay schemes can be based on sound calculations of performance. Design/methodology/approach quotes the criticisms that have been made of performance-related pay schemes and discusses why many schemes have not been able to accurately link pay to performance. Outlines the work being done by firms, such as PricewaterhouseCoopers to make performance-related pay schemes more transparent. Indicates some of the non-financial measures, such as measures of employee productivity and environmental targets, that are being developed to link executive pay to areas of performance that are important for the achievement of the firm’s business strategy. Findings acknowledges the difficulty of linking pay to performance but argues that key company performance indicators can be linked to pay. Originality/value considers the efficacy of performance-related pay. ISSN: 13586297 Reference: 37AF641
Keywords: Business strategy, Organizational performance, Performance related pay