Strategic Job Alignment and Performance Data Automation are Keys to Successful Pay for Performance

Business Wire, April 4, 2006

BOSTON -- Many HR professionals cite a disconnect between tracking employee performance and compensation, and visibility into employee data. A new Aberdeen research report 'The Pay-for-Performance Benchmark Report', finds that technology-enabled Pay for Performance programs integrate both performance tracking and compensation management, providing overall visibility in employee value and contributing to corporate success.

62% of Best in Class organizations first make sure that employee work objectives are aligned with corporate strategic objectives. 36% of Best in Class organizations have actually achieved the ability to measure employee goal achievement per these alignments.

Then, to make sure that employees pay continuous attention to this linkage, these organizations structure compensation so that a portion of a person's pay varies in relation to accomplishment of the strategically linked objectives. More Best in Class organizations use variable compensation for their top performers (47%) by a factor of half than did the other organizations (31%).

Focusing on high performers is the highest priority of Best in Class companies. Enabled by automation, 64% of these leaders rely on increased compensation as a reward for high performance.

"By ensuring that employee goals and objectives are directly aligned with over-arching corporate strategic goals and then tracked for accomplishment, companies lay the foundation for proper compensation--one of the reasons workers stay in their jobs," says David Foster, Aberdeen's HCM research director. "When these two systems--performance management and compensation--are strategically aligned, then Pay for Performance programs can effectively improve revenue and profit per employee, while enhancing retention of a company's MVPs."

Recent Aberdeen research shows that 77% of companies report the inability to get the talent they need as the top driver of increased Pay for Performance.

This research, which includes end-user testimonials about Pay for Performance collected in follow-up interviews, arms readers with actionable frameworks to benchmark their Pay for Performance plans and programs against best-in-class performers.

For a complimentary copy of 'The Pay-for-Performance Benchmark Report', please follow this link:

http://www.aberdeen.com/link/source.asp?cid=2857&pid=PR040406

AberdeenGroup, Inc. provides fact-based research and insights focused on the global, technology-driven value chain. Aberdeen's benchmarking, market and solution assessments, sales acceleration programs, and conferences support Global 5000 value chain and technology executives and the solution providers who serve them.

For more information, visit www.aberdeen.com or call 617-723-7890.