Creating an Effective Measurement Philosophy

Most businesses have job descriptions, a document communicating what a person is to accomplish. You might say it describes what someone is paid to do. 

Imagine an unusual, but well-organized business, unique because it doesn't have job descriptions. How would its leaders communicate to employees what they were paid to do? Is it possible? You bet it is! It's done through an incentive compensation plan. The paycheck becomes the report card. 

A good job description and a good compensation plan should accomplish the same goal. Are both needed? Rather than spend time designing sheets of paper with requirements on them, why not sit down with the employee and discuss what you want done and create an incentive plan that motivates the person to do it? 

Determine what you want accomplished, then find an effective, motivating way to reward for it. You'll discover the traditional job description is no longer necessary. What's better than giving the employee an automatic performance review with every paycheck? You will find people automatically doing what they get paid to do. 

Everyone wants positive motivational leverage on their money. That's exactly what happens when compensation is aligned with responsibility. An effectively aligned incentive compensation package can:  

Increase profitability 

Increase responsiveness to customers 

Increase individual and team productivity 

Provide important performance feedback to employees 

Provide employees with a record of performance 

Increase PEP–Per Employee Productivity 

Increase variable, reduce fixed payroll cost 

Provide constant reinforcement of successes 

Increase employee motivation