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year. To not adjust for such would eventually have that <br />position's pay continue to decrease over the years in <br />relation to its purchasing power. <br />DISCUSSION - As discussed when the plan was implemented it <br />provided for the position compensation based on both the internal <br />and external factors and was to be the level that someone <br />performing at the expected level for the job. This however did <br />not provide a way to monetarily reward persons who are doing a <br />better than expected level of performance. The problems with <br />some of these systems have included the basis for these <br />incentives and they have earned permanent increases in their pay <br />based on one years performance. <br />Recognition of someone's meritorious service to an organization <br />can take several forms, some of which have been used in the past. <br />The use of monetary incentives to influence such performance has <br />been done in several ways for many years in the private sector. <br />Some have been based on the amount of production, specific goals <br />and objectives, overall organizational profitability, cost saving <br />ideas, etc. <br />General schemes for monetary incentives fall into the following <br />categories: <br />A* Pay for Performance - This can be either through <br />general goals and objectives or based on the financial <br />results of the organization, a specific department or <br />where possible to individuals. Issues related to this <br />are the basis and sometimes arbitrariness of that basis <br />on which they are distributed. <br />B. i,^i.£a^i.ons Attainment - Persons have been <br />rewarded for obtaining certaFn qualifications (apart <br />from their job rating) to recognize the fact that the <br />employee is more valuable when they are more highly <br />trained and able to do other jobs. Such plans provide a <br />more "objective" basis because certain factors for <br />criteria have to be met, however, these qualifications <br />do not always directly translate to job relevant <br />criteria. <br />Specific Achievements - Certain <br />organizatFons reward employees either for specific <br />meritorious projects, tasks, suggestions, etc. Such are <br />generally in the form of a lump sum payment with a <br />formula for determining the amount and the individual <br />recipients . <br />(Attachment A discusses use of pay for performance systems in the <br />public sector.) <br />Any incentive program is going to have those who question the <br />fairness of the distribution. If there is not a differentiation <br />in distribution among the employees, then the question of whether