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Pay-for-Performance Plans Would Increase Productivity, Employees Say

Almost a third of American workers whose pay is not tied in some way to their performance believe they would be more productive if they had a greater interest in the companies that employ them through benefits such as profit sharing, according to a survey from temporary staffing and outsourcing firm Kelly Services.

The findings are part of the Kelly Global Workforce Index, which obtained the views of approximately 13,000 workers in the United States.

The survey found:

25 percent of U.S. workers are currently in an arrangement where some of their pay is tied to performance targets.

Gen X (aged 30-47) employees are much more likely to be receiving performance-based pay than Gen Y (aged 18-29) or those in the Baby Boomer generation (aged 48-65).

Men are more frequently in performance pay plans than women.

However, of those not receiving performance pay, almost a third (31 percent) say they would be more productive if their earnings were connected to performance outcomes, particularly Gen Yers and males.

Almost a third say they would be more productive
if earnings were tied to performance outcomes.

Additionally, the survey found there is strong support for employers taking a more proactive role in improving the health of their workforce, with 84 percent saying that employer-provided health initiatives should be part of their employment package.

"There is a high degree of interest from employees in having a portion of their compensation tied to the financial performance of their employers," said Mike Webster, Kelly Services executive vice president and general manager. "However, the survey suggests that nonfinancial compensation including wellness programs are gaining appeal. These programs can yield benefits for both employers and employees by creating a more productive and energetic work environment."

Other Findings

Results of the survey also show that:

Among all U.S. respondents (those with and without pay tied to performance), 51 percent say that profit sharing motivates or would motivate them to perform at a higher level.

Among major U.S. regions, the largest concentration of workers receiving performance-based pay is in northern New Jersey and Memphis, Tenn., (both 33 percent), followed by Portland, Ore., (32 percent), Tampa, New York City, and Raleigh-Durham, N.C., (all 31 percent).

Those industries with the highest rates of performance-based compensation are financial services, travel and leisure, retail, and business services.

Aside from salary, the reward that rates highest is health benefits, followed by flexible hours and retirement benefits.

More than two-thirds (67 percent) believe that employers should provide incentives to encourage a healthier lifestyle for such changes as quitting smoking, losing weight or taking up exercise.

The employer-provided health benefits that are most attractive were health insurance, followed by gym access or discounts, a smoke-free environment, and corporate exercise programs.

Stephen Miller is an online editor/manager for SHRM.

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