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HR Magazine: (Top) Pay for (Best) Performance

By Steve Bates  1/1/2003
 

HR Magazine, January 2003Vol. 48, No. 1

Goalsharing at Corning

Rewarding employees for meeting important goals - whether or not the company is raking in lots of money - is the heart of the "goalsharing" program at Corning Inc. in Corning, N.Y. Started in the early 1990s, the variable pay plan can give each U.S.-based Corning employee an annual bonus of up to 10 percent of salary.

Employees helped develop the system, which is reviewed and adjusted annually at the business unit level by committees that include workers, managers and union representatives.

One-fourth of the bonus is based on earnings per share of company stock for the preceding year. The rest of the payment depends on how well the worker has met job performance goals established for his or her business unit over the year.

"One of the basic premises of goalsharing is that every employee would have line of sight" to the corporate goal, says Larry Lukefahr, Corning's manager of variable pay programs. Individual performance standards "are set with the idea that each employee can somehow contribute to meeting that goal."

"Everybody must improve from where they ended up last year", says Hank Jonas, the corporation's manager of organizational effectiveness. But in addition, "everybody has an equal chance of success."

It's not always easy to set goals that satisfy the interests of the employee and the company, Lukefahr and Jonas note. A research scientist "might say 10 failures is a success. How do you measure 10 failures and pay someone for 10 failures?" asks Lukefahr.

And it's not always easy to explain handing out bonus checks when the company is losing money. "I've had a lot of people look at me like I'm crazy because where they're coming from is profit sharing," notes Jonas. Corning has a portfolio of businesses, some of which are in the black, which helps support bonuses for all eligible workers.

"I envisioned that there would be good times and bad times," Jonas says. "We want it to fairly reflect how we're doing as a company in good times and bad."

Adds Lukefahr: "Our employees are very aware of goalsharing and how goalsharing works." In Lukefahr's seven years at Corning, he says, "I've never heard anybody question goalsharing."

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