Performance Management For Dummies

Chapter 16

Offering Financial and Nonfinancial Rewards

IN THIS CHAPTER

Setting up financial and nonfinancial rewards

Connecting performance management with different types of rewards

Implementing an effective contingent pay plan

One of the purposes of performance management is to make administrative decisions about employees. And of those, decisions about rewards, which used to be labeled “compensation and benefits,” are the most meaningful consequences of a performance management system for many employees.

Clearly, most people are interested in their personal growth and development. But pay is often at the top of the list in terms of people’s needs — although they may rarely admit it openly. Also, from the perspective of organizations, compensation shapes the culture because it sends a very clear message about what behaviors and results are more or less valued.

In this chapter, I cover the two main types of rewards: financial (also called “tangible”) and nonfinancial (also called “intangible”). These are the basic ingredients of a reward systems. Also, you learn about how to connect performance management to different types of rewards.

Not All Rewards Are Created Equal

Until ...