Workforce Strategy #2: Design A Performance-Based Compensation Model To Go Above Market Rate

One way to pay more without raising wage rates is to create performance-based compensation models for team members. This allows “gainsharing”—team members make more when their service line (or their individual performance) creates additional margin for the organization. This will encourage focus on key organizational and customer metrics. However, most executives are reluctant to adopt performance-based compensation strategies for their teams because of concerns about equity in pay, not knowing how to build the right model, and trouble with establishing metrics and tracking data for incentive compensation. While putting this compensation system in place takes considerable effort . . .