Tie Promotions to Performance

Tie Promotions to Performance

What Kochanski has found is that promotions are poorly managed. Budgeting for the cost seems to help. Promotions should be related to growth and turnover. If you’re promoting faster than that combination, you’re adding cost and making the organization top heavy.

You need to track and report across units, with calibration. Certainly require several levels of approval, Kochanski says

Entitlement Promotions	Real pay for Performance
Time-based No budget Varies significantly period to period No tracking or reporting Few standards Approval process unclear Opportunity for favoritism	Performance -based Cost is budgeted Tracked and reported across units Promotions calibrated Requires multi-level approval

For example take a look at these criteria and how they may affect compensation.

Criterion		Assessment
Degree of increase in responsibilities	Moderate		More significant	Signifi-cant
Performance compared to expectation	Effective		Very effective	Exceptional
Current salary relative to mid-point of new grade	High		Same	Low
Current salary relative to others in similar jobs in new grade (with similar skills, knowledge, competencies, and experience)	High		Same	Low
Depth and breadth of skills and knowledge (assumes demonstration)	Moderate		Higher	High
Recommended increase	Modest Increase 3% –5%		Moderate Increase 5% –8%	Significant Increase 8% –10%