Performance related pay

[Mark34bn]

My last company introduced a PRP scheme. It took them about two years but they eventually overruled a vote (!) and introduced it 'for the good of the company'. The whole scheme was based on four different criteria, all percentages worked out behind closed doors and all interlinked to give one final figure. What job do you do ? I used to build luxury powerboats and we didn't know what we would be earning from one week to the next. Lean manufacturing I believed it was called. They employed the services of some business advice company who spent their whole time making endless graphs which we had to spend time looking at. Basically they kept bringing the delivery dates forward so we were always 2-3 weeks behind schedule, but 'the graphs show the target is attainable' etc....

Sorry I could go on about this all night..
HTH

[singlecoil]

Ah yes, performance related pay. The Eldorado, the Holy Grail the (insert alternative impossible dream here) of people who run businesses.

Its' based on the self-evident fact that workers can always try that little bit harder and work that little bit smarter. The problem is, how do you encourage people to do that? By paying them more if they do. Easier said than done, though. Somehow the extra effort needs to be measured. But how? By measuring output? What if that output is something that cannot be measured? What if a machine breaks down, or an awkward customer needs to be dealt with, and some required parts don't arrive in time?

PRP schemes have been operating in one form or another since people started working for other people, and the search for a good one remains as elusive as the search for a perpetual motion machine.

[oldbanger]

Apologies I was the OP but decided I was being a bit too specific.

My issue is performance related pay schemes introduced to qualify for salary you are already contracted to get.

[Mark34bn]

My employer introduced PRP without changing our contracts, we already had a simple bonus scheme which accounted for 40% of our pay. They simply upped our pay rate a bit and had the PRP accounting for 30% instead. There were lots of variables and certain things became 'our' problem (like parts not turning up for a week), we had to absorb it and suffer the loss. Like I said above it took them a long time to introduce the scheme, and they used the financial climate excuse endlessly ("if we don't change the outdated/unfair system the place will implode" etc)
I'm sure someone who actually knows about these matters will help, this was just my personal experience-

HTH

[singlecoil]

oldbanger said:

Apologies I was the OP but decided I was being a bit too specific.

My issue is performance related pay schemes introduced to qualify for salary you are already contracted to get.

It would seem then that the PRP element has little or nothing to do with it, it's just a forced change in your contract terms. There's a fair bit of relevant stuff on this forum.

[speedyman]

My company introduced performance related pay, but stopped annual inflation increases to base pay. So each year your bonus (£500) goes down as inflation is eating away at the base pay element used to calculate the % bonus you get.
I haven't had a base pay increase in five years. Its a con being worked on everyone exept the boss in our case.

Who works harder for £500 anyway, make it 5K + then maybe there's something in it.

What's all this bonus stuff anyway, what about just paid for the work your supposed to do.

Speedyman

[don4l]

speedyman said:

What's all this bonus stuff anyway, what about just paid for the work your supposed to do.

Speedyman

You have hit the nail right on the head. Many people expect to get paid for the work that they are "supposed" to do.

PRP tries to ensure that they get paid for the work that they "actually" do.

After all, if you don't make money for your employer, why should he pay you?

Don
--

[Mark34bn]

don4l said:

speedyman said:

What's all this bonus stuff anyway, what about just paid for the work your supposed to do.

Speedyman

You have hit the nail right on the head. Many people expect to get paid for the work that they are "supposed" to do.

PRP tries to ensure that they get paid for the work that they "actually" do.

After all, if you don't make money for your employer, why should he pay you?

Don
--

In theory yes, as an employee I'd see that as fair. My last company had a real problem supplying the parts to us on time. I built luxury powerboats and it's a pain in the backside trying to fit a central heating system when all the furniture & carpets are in. Who paid for that ? we did.
The company liked to see themselves operating like a Toyota factory, in reality it was a million miles from that level. The main daily topic of conversation was late / missing parts.

[speedyman]

Mark34bn said:

don4l said:

speedyman said:

What's all this bonus stuff anyway, what about just paid for the work your supposed to do.

Speedyman

You have hit the nail right on the head. Many people expect to get paid for the work that they are "supposed" to do.

PRP tries to ensure that they get paid for the work that they "actually" do.

After all, if you don't make money for your employer, why should he pay you?

Don
--

In theory yes, as an employee I'd see that as fair. My last company had a real problem supplying the parts to us on time. I built luxury powerboats and it's a pain in the backside trying to fit a central heating system when all the furniture & carpets are in. Who paid for that ? we did.
The company liked to see themselves operating like a Toyota factory, in reality it was a million miles from that level. The main daily topic of conversation was late / missing parts.

By stating "Paid for the work your supposed to do" I mean if your employed as a manager then manage. You don't need a bonus, you should be doing the work already to the best of your ability or you should be fired. Also lots of jobs don't make the company money, they come under the heading of costs. If sales don't make their targets everyone gets shafted. Although for most other employees there is nothing they can do to change things. So how is that PFP ?

speedyman