You Are Not Paying For Performance

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.

Are you really paying for performance? Or are you really paying and hoping for performance?

Paying In Advance of Performance
It’s easy to believe that paying more will allow you to hire employees that perform at a higher level. But it doesn’t work that way. The amount of money you pay doesn’t ensure performance. It isn’t a shortcut, and paying more doesn’t mean that you don’t have to hire well, manage well, train well, or hold people accountable to goals.

You might be paying for performance, but paying in advance of performance doesn’t guarantee you’ll get it.

Motivating with Money

It’s also easy to believe that building a compensation structure that rewards employees for greater performance will motivate them. It won’t. It doesn’t.

Some people are seriously money-motivated (and this isn’t always a good thing). People that are motivated by money will take the necessary actions to make more money. They’ll do the work and make the calls. But they’ll really be performing because it’s who they are. They’re internally motivated to make more.

But most people aren’t really motivated by money–they just want more money. There’s a big difference here. You can offer an aggressive bonus or commission structure, but it won’t really do anything to motivate the non-money motivated.

Most people want more money; they just aren’t motivated enough to do the work.

Compensation plans are tricky. Hiring well is no easy feat either. Paying for “performance” is no substitute for a thoughtful compensation plan or excellent hiring practices. It also doesn’t eliminate good management, good training, good coaching, or accountability.


Does pay improve performance?

Does paying more offset poor hiring or poor management practices?

Are you motivated by money? Does money really drive you to do more? Or do you really just want more money?

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