If you've spent any time on the interwebs lately, you've probably witnessed the tsunami around Dan Pink and his video about incentives. I jumped into the melee myself last week with this post.
Here, with what I consider to be the last word on the topic (at least from the standpoint of the rewards profession), comes Paul Hebert of Incentive Intelligence, who put together the presentation embedded below. As Paul wisely and patiently explains to us, Dan is - ultimately - neither 100% right nor 100% wrong ...
With a merit budget of 1%, what do you call it? If you call it a merit increase, the employee who has performed a superior job and only gets a 1% (or possibly less) increase looks at you with disgust when he/she gets it. It feels like a "slap in the face."
Posted by: Abby/HR Analyst | September 10, 2009 at 08:30 AM
Abby:
Nobody can deny that rewarding performance with a 1% merit budget is a challenge. Some organizations are pooling the available dollars, giving 3-4% to the few top performers and nothing to the rest. It may not be the option your organization would choose, but it is an approach that some organizations have decided to pursue in these tight times.
For other thoughts on this dilemma, see this post about "10 ways to slice a teeny tiny merit budget"...
http://compforce.typepad.com/compensation_cafe/2009/09/what-a-relief-10-different-ways-to-slice-a-teeny-tiny-merit-increase-budget.html
Posted by: Ann Bares | September 10, 2009 at 05:53 PM