Design a Purposeful Pay for Performance Program
Effectively link pay and performance to drive measurable organizational impact.
- The connection between pay and performance is not always clear to employees. This results in perceptions of unfairness, which undermines trust and the effectiveness of the program.
- One-size-fits-all P4P programs fail to reflect organizational context, resulting in limited impact and wasted investment.
- Budget constraints often limit P4P program effectiveness. When available funding prevents meaningful differentiation across performance levels, the program’s ability to drive desired behaviors and motivate high performance is impacted.
Need Extra Help?
Speak With An Analyst.
- Get on-demand project support
- Get advice, coaching, and insight at key project milestones
- Go through a Guided Implementation to help you get through your project
Our Advice
Critical Insight
Pay for performance impacts more than compensation. It shapes how employees view their effort and value. When intentionally designed with a clear purpose, P4P reinforces organizational goals and delivers meaningful, motivating rewards that drive impactful performance.
Impact and Result
- Rewarding employees based on behaviors and metrics that support organizational goals strengthens strategic alignment across the organization.
- P4P that meaningfully links organizational results to rewards increases employee productivity, retention, motivation, and engagement.
- Designing a purposeful P4P program enables people leaders to assess performance fairly, apply guidelines, and clearly communicate pay decisions.
Pay for Performance
This program has been approved for continuing professional development (CPD) hours under Section A of the Continuing Professional Development (CPD) Log of the Human Resource Professionals Association (HRPA).
McLean & Company is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP® or SHRM-SCP® recertification activities.
HR Certification Institute's® (HRCI®) official seal confirms that McLean & Company meets the criteria for pre-approved recertification credit(s) for any of HRCI's eight credentials, including SPHR® and PHR®.
How to complete this course:
Use these videos, along with the project blueprint deck above, to gain an understanding of the subject. Start with the Introduction, then move through each of the course modules. At the end of each module, you will be required to complete a short test to demonstrate your understanding. You will complete this course when you have completed all the course tests.
- Number of Course Modules: 5
- Estimated Completion Time: 1.5 hours
Learning Outcome
Examine how to align pay for performance with an organization’s context and people strategy, defining objectives for the approach and selecting appropriate methods to determine annual base pay increases and bonuses.
Learning Objectives
By the end of this course, learners will be able to:
- Explain why the current approach to pay for performance is not effective and how a new approach is needed to align with today’s work environment.
- Describe the three different objectives for a new approach and how to identify which is most appropriate for your organization.
- Discuss various options for annual base pay increases and bonuses, how they align to the three different objectives, and when they are most appropriate for an organization.
- Understand how to execute an effective rollout plan for compensation changes.
All of our McLean Academy courses have closed captioning available. To turn this function on, click on the C.C. in the bottom right corner of the video screen and click "English" on the options that pop-up.
Course Modules
Introduction
Module 1
Module 2
Module 3
Module 4
About McLean & Company
McLean & Company is an HR research and advisory firm providing practical solutions to human resources challenges via executable research, tools, diagnostics, and advisory services that have a clear and measurable impact on your business.
What Is a Blueprint?
A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your HR problems.
Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.
Need Extra Help?
Speak With An Analyst
Get the help you need in this 3-phase advisory process. You'll receive 10 touchpoints with our researchers, all included in your membership.
Guided Implementation 1: Define the purpose of P4P
- Call 1: Discuss the organization’s starting point and readiness to design or redesign the P4P program.
- Call 2: Draw insights from organizational artifacts, the performance management framework, and organizational data to inform the P4P purpose.
- Call 3: Review P4P purpose statement and define goals and metrics to track success.
Guided Implementation 2: Design the program
- Call 1: Examine high-level budget availability and employee segment needs.
- Call 2: Explore and select P4P structures, models, and performance criteria to connect to pay.
- Call 3: Define allocation of performance-based pay and estimate financial impacts of the P4P design.
- Call 4: Create a P4P cycle and determine a governance structure for P4P program
Guided Implementation 3: Prepare for implementation
- Call 1: Plan to manage the change, develop a pre-implementation plan, and prepare to address reactions to implementation.
- Call 2: Select an implementation approach, decide the transparency level for P4P communications, and create a change communication plan.
- Call 3: Prepare to train key players on the P4P program and plan to monitor and adjust the P4P program.
Contributors
- Jessica Ash, Global Talent Rewards Leader, IAMGOLD Corporation
- Jennifer Baar, Senior HRBP, SMART Technologies
- Simon Chatfield, Senior Director, Compensation and Benefits, Publicis Sapient
- Rob Heir, Total Rewards Consultant, JTS Consulting
- Peter Martin, VP, Total Rewards, Woodbridge
- Kirk Merrett, Head of HR, Hyundai Canada
- Crystal Radford, Manager, Learning and Development, DISA Global Solutions
- 5 anonymous contributors
Build a Total Rewards Strategy
Craft a Compensation Philosophy
Design a Base Pay Structure
Conduct a Salary Assessment
Design a Purposeful Pay for Performance Program
The Rise of Organizational Transparency