Pay-for-Performance Strategies
Some organizations have a pay-for-performance strategy, which means that we are rewarded for meeting
preset objectives within the organization. For example, in a merit-based pay system, we might be
rewarded for meeting or exceeding performance during a given time period. Rather than a set pay
increase every year, the increase is based on performance. Some organizations offer bonuses to employees
for meeting objectives, while some organizations offer team incentive pay if a team achieves a specific,
predetermined outcome. For example, each player on the winning team of the 2010 NFL Super Bowl
earned a team bonus of $83,000, [5] while the losing team of the Super Bowl took home $42,000. Players
also earn money for each wild card game and playoff game. Some organizations also offer profit sharing,
which is tied to a company’s overall performance. Gain sharing, different from profit sharing, focuses on
improvement of productivity within the organization. For example, the city of Loveland in Colorado
implemented a gain-sharing program that defined three criteria that needed to be met for employees to be
given extra compensation. The city revenues had to exceed expenses, expenses had to be equal to or less
than the previous year’s expenses, and a citizen satisfaction survey had to meet minimum requirements.
