Salary Review Guidelines,Guidelines on the distribution of increments an attempt to overcome the varying standards of judgment leading to an all my ducks are swans approach to rewarding staff. The distribution scale may be related to a guideline like this: AssessmentIncrement (%)Distribution A outstanding9 % 10%10% B good7% 8%20% C satisfactory4 % 6%50% D needs improvement0%10% E unsatisfactory0%10%,Salary Review Guidelines,Guidelines on rates of progression managers are helped to plan salary progression by being given an indication of the number of years it should take staff at different levels of performance to reach the top of the grade and, in zones of salary range, the limits within the range which can be reach according to their performance. AssessmentLimit In Grade Typical Length Learning zone1 to 3 years 2 years Performing zone4 to 6 years 5 years Exceeding zone2 to 4 years 3 years -,Salary Problems,Absorbing market rates pressures arises when general and individual salary reviews have not enabled the companys salary levels to keep pace with increase in market rates. it is exacerbated if the company is expanding and is compelled to obtain key staff who are in short supply. Widening differentials differentials are widening between and within companies in the following areas: - between high-and low-paying organizations the variations in prosperity between differing sectors of industry and commerce and between regions are major contributors to this problems. - between companies paying bonuses or incentives and those paying straight salaries.,Salary Problems,- between top and middle management within companies this is partly incentive led - between executives recruited by search and those with a one-company career. Performance pay tend to favour the few whose results can be measured. merit-assessment are too often based on subjective and biased judgments. can be avoided only by intensive training of assessors and by careful monitoring of the appraisal scheme.,Salary Problems,Staff reaching the top of their salary league staff reaching the top of their salary range may feel demotivated if there are no prospects for promotion it is possible to deal with this problem by introducing on top of the normal salary range a premium zone which is reserved for outstanding staff whose promotion is blocked. Starting salaries the problem of starting new staff at higher rates than existing employees should be minimized if internal salary levels are regularly reviewed in comparison with market rates.,Salary Problems,Deteriorating job evaluation schemes the scheme may not have been controlled properly, so that grade drift occurs through unjustifiable upgradings. scheme may have lost credibility because it no longer gives acceptable solutions. administration may have become so bureaucratic that the time taken to produce answers is unduly prolonged. the solution is to make a determined effort to tighten controls and speed up administration, making only minor modifications to the scheme.,Objectives of Performance-Related Pay (PRP),Motivate all employees, not just the high-flyers. Increase the commitment of employees by encouraging them to identify with its mission and values. Reinforce existing cultures and values to foster high levels of performance, innovation and teamwork. Help to change cultures where they need to become more performance- oriented and results-oriented; or where the adoption of other new and key values should be rewarded. Discriminate consistently and be equitable on the distribution of rewards to employees according to their performance results and contributions.,Objectives of Performance-Related Pay (PRP),Deliver a positive message about performance expectations of the company focuses attention on key performance issues. Direct attention and endeavour by specifying the organizations performance goals and standards. Emphasize individual performance or teamwork as appropriate. Improve the recruitment and retention of high-quality staff. PRP costs will be in line with company performance.,Key Factors to Consider When Introducing PRP,Matching the culture successful PRP schemes need to match the culture and core values of the organization. Linking PRP to business strategy the focus needs to be on strategic business issues which emerge from the business planning process. Balancing quantitative and qualitative measures while most PRP schemes rely on quantitative measures of performance, qualitative factors need to be introduced for the measurement of individual behaviour eg balanced scorecards The need for flexibility flexibility in making milestone payments which convey the right messages for the future. The need to promote teamwork the importance of teamwork should be recognized in structuring the scheme and defining critical success factors and performance indicators.,Key Factors to Consider When Introducing PRP,The need to avoid short-term thinking setting long-term as well as