Group/Individual Level

Facilitating Structures - Reward systems and performance indicators

Remuneration systems
Two key components of any performance management program are the reward and remuneration systems. It is important to distinguish between rewards and remuneration. Remuneration is typically considered to be what people are paid: salary or wages, superannuation contributions, and any fringe benefits such as a car or mobile telephone. Rewards can include non-monitory items such as praise and recognition, as well as monitory items such as gifts, work-related trips and expense-paid holidays.

The major concern at this point, is to ensure that these rewards and remuneration packages are actually reinforcing the behaviours that are wanted. If people see that politically motivated, win-at-all-costs behaviour leads to increases in rewards and remuneration, those are the behaviours they will think the "system" is trying to encourage. If they see that team-oriented, self-sacrifice actually leads to promotions, salary raises and other rewards, they will be more likely to think the "system" is trying to encourage those types of behaviours.

Once again, I am not trying to say than any one set of behaviours is better or worse than any other for your specific situation. I am simply trying to alert you to the fact that reward and remuneration systems send signals - loud and clear signals - to the people whose behaviour you are trying to affect. Why not have your reward and remuneration systems working for you, rather than against you?

For an excellent discussion of people, pay and performance, see:

Flannery, T. P., Hofrichter, D. A. & Platten, P. E. (1996). People, performance and pay. New York: The Free Press.
Crandall, N.F & Wallace, M.J.(1998) Work & rewards in the virtual workplace: a "new deal" for organizations & employees. New York: AMACOM.