Tying employee benefits to employee performance? A radical idea ... or maybe not: IBM is in the process of reinventing their 401(k) plan with just this objective in mind.
Contributor Becky Regan reports on this development today over at the Compensation Cafe:
"Suppose you made a 401K plan that was performance-based?" asked J. Randall MacDonald, senior vice-president for human resources, who was responsible for the pensions' conversion into the current 401K plan. "If everybody gets paid on performance, shouldn't there be benefits based on performance? That's what it means to be a performance-based culture."
Details are not forthcoming yet. But the vision includes a pay-for-performance 401K contribution, coupled with stock options or deferred compensation plans that will serve to differentiate between employees. Because of discrimination testing, extra benefits would need to be spread across top performers. Offering a possible solution, retirement consultants recommend comparing workers at similar levels, within the same salary range.
Click over to Becky's post to learn more.
(And if you aren't already, please get subscribed to the Compensation Cafe, a multi-contributor blog where I am joined by five great writers ... and where we have taken a solemn oath to bring you "straight talk, original thinking and caffeinated discussion on everything compensation"!)
Comments