Performance-Based Pay and the Repercussions You May Not Know


Money makes a significant motivator, right? It makes us get up early in the morning five days a week, we spend more time at work during the week than we do with our friends or families because of it, we place a lot of social capital on the kind of work we do and how much we make. So it makes sense for employers to offer more of it in exchange for higher productivity. It’s a win-win situation for both employer and employee, right? Except, how is this popular pay structure really paying off? Likely not as well as you think it is.


Along with the performance-based pay structure comes longer worker days, utilizing PTO less, working on the weekends, missing important personal appointments and activities. In general, it’s prioritizing a stressful career over the work-life balance so essential to healthy and yes, productive, lifestyle. These things are not only affecting your employee’s personal life (which is bad enough as it doesn’t put the company culture in a positive light, more on that later) it also affects the productivity of their work performance. How is that so?


Salary may be high on the desirables list for employees but there’s one other thing consistently proving to be just as essential in today’s workplace: predictability. Both a consistent schedule and a pay rate has proven to not only be beneficial to an employee outside of work, it’s shown to make them more productive while on the clock. Those bonuses to reach certain goals may have been unnecessary all this time when offering a higher base pay and reasonable work hours could have paid off just as well.


And we all know what it means when an employee enjoys a health work-life balance: your company culture suddenly becomes desirable enough to both keep and attract top talent. That alone probably sounds pretty enticing to change the pay structure, yes?


Want to take a look at your pay structure to find room for improvement? We can help you implement a policy that makes sense for both employer and employee, hence benefiting both your company culture and profits. Win-win.


Contact us today!