If an organization has a history of giving employees salary increases based on years of service (tenure) - and

Question

If an organization has a history of giving employees salary increases based on years of service (tenure) - and not based on performance. What recommendation would you make on how to change salary increases based on tenure to pay-for-performance. Also, how do you think the workers will receive this new structure?

Answer 1

If I owned the comany I would.......

a. start discussing the change with employees well iin advance, and repeat the message frequently.

b. clearly communicate the criteria for salary increases (linked to achievment of goals, not sucking up) and that poor performers get ZERO increase

c. remind long tenured employees how valuable they are

d. design a system to make sure that everyone but poor perfromers gets an increase - based on cost of living and inflation.

Of course people will resist change and be nervous about it, but if you manage the change correctly,  you can minimize the negative impact. You may get some turnover, but it will probably not be your best people. Eventually, it will pay for itself many times over.