Work harder. Work smarter. Get rewarded.
From executive suites to assembly lines, employees increasingly are getting the chance to pocket extra money by giving a little more to the job.It can be as simple as showing up for work every day. Or, it can be exceeding production quotas or taking on extra responsibility, such as learning how to operate new equipment.
"It's a chance to prove you're better than cost of living," said Kim Rauh, a Parker high school teacher who may earn extra pay for a good evaluation, completing additional education and volunteering for extracurricular activities.
Managers say performance-based pay is a win-win situation because it boosts production and efficiency and gives employees some control over their earning power. Labor unions, however, call it nothing more than a '90s version of the carrot-and-stick philosophy.
"The issue of individual variation of pay is really the antithesis of the union, which says it will treat everybody the same," said Steven E. Gross, who analyzes employee compensation for William M. Mercer Inc. "What companies struggle with is paying premium wages for non-premium performance."
Called merit increases, bonuses, profit-sharing or performance pay, the programs reward employees who meet or exceed a predetermined set of standards, either as an individual or as a group.
Until recently, such bonuses were mainly limited to executives or overproducing salesmen.
But they have caught on as a way to motivate rank-and-file workers with the work world shifting into a high-technology, predominantly non-union era, said David Y. Denholm, president of the Public Service Research Council in Vienna, Va.
"An auto worker working on an assembly line was doing exactly what he was told to do, exactly how he was told to do it," Denholm said. "No matter how hard an auto worker works on that assembly line . . . it runs at the same rate.
"A person using information, using their intellectual capacity, will have a far greater influence on their own productivity . . . because they are making decisions, doing things with their minds," he said.
Gross said merit increases also build a variable into annual wage hikes that gives companies some wiggle room if the economy softens and performance levels fall.
Since 1995, 48 percent of 1,800 organizations surveyed by Mercer have added employees to incentive plans, and 41 percent have boosted the amount of money available in incentive programs, according to a newly completed study.
The shift represents a fundamental change in labor relations, one that unions have fought in a wide spectrum of industries, from blue-collar jobs to teaching and the medical profession.
A performance-pay plan was one of the key sticking points in a recent 15-day strike at US WEST Inc.
Company officials insisted the plan was necessary for repair technicians to improve customer service as the regional Baby Bell telephone company encounters increasing competition.
Leaders of the Communications Workers of America contended the company could not set fair measurements for repair technicians, and that such plans actually hurt customer service .