Supporting Pay for Performance with the Right Technology

Most pay-for-performance initiatives fail to deliver results. Close examination of failed initiatives by early adopters reveals several common causes. Foremost, HR departments are often burdened by traditional administrative challenges and therefore unable to find the necessary time to adequately execute a strategic initiative like pay for performance. Also, once companies deploy a pay-for-performance technology solution, they rarely follow through with the education and training necessary to ensure that managers understand the value of the initiative and how to use the technology properly. The technology solution itself can also be a roadblock to success if it does not integrate tightly with other critical HR applications and support a robust array of functionality. Without these three elements—strategic HR, management buy-in, and the right technology solution—pay for performance is unlikely to succeed and often leads to a series of negative consequences for HR and the entire organization.