Talking about performance at work is never easy. Especially when an employer decides to reward it with salary increases or one-time bonuses. It delights the recipients while risking alienating those who are left out. We explored this sensitive topic with Sarah Jodoin-Houle, CRHA, an HR consultant specializing in total compensation and communication.
Is rewarding performance with bonuses or salary increases a good practice for an organization?
Sarah Jodoin-Houle: It depends on the organizational culture, but overall, I think it is. When you survey employees, it’s one of the first things that comes up: they see recognition in receiving compensation that reflects their efforts and commitment.
If an employer doesn’t acknowledge performance differences in pay, they’ll disengage their high performers. You can see this in environments where raises are tied solely to market rates or seniority. People who go the extra mile feel shortchanged.
How can a company link the two concepts — compensation and performance?
S. J-H.: It’s a delicate question. Failing to recognize performance or quality of work demotivates high performers. However, if you go too far with the “I’ll give you a carrot if you’re a good employee” approach, that demotivates people too.
Sometimes the word “performance” simply doesn’t land. In healthcare, for example, the goal is to maintain a human-centered approach. The idea isn’t to treat as many patients as possible per hour; it’s about doing your job well. The notion of performance is still there, in the sense that you’re striving for quality work, but the term itself will be avoided.
In that case, how can it be named?
S. J-H.: We often talk about skills development or progression within a given role. Then salary scales are put in place that are tied to that skills development. That’s how the link to performance is made.
Are there contexts where compensation must be explicitly tied to an employee’s financial performance?
S. J-H.: In a consulting firm that sells hours, there’s the concept of billable hours. Performance is then tied to the idea of delivering a certain volume of work within a given timeframe. Ultimately, you want to find the strategy that makes sense for the business.
At the same time, you also have to acknowledge that some portion of performance will always remain subjective. If an employee is toxic, doesn’t collaborate well with colleagues, and behaves poorly, but delivers impressive numbers, they may be “productive” — but they’re not performing. If a company chooses to measure performance solely through figures or success metrics, it completely removes the human element from the equation.
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