Executive management
Question
Is there any evidence to support the introduction of performance-related pay and bonuses, for example for the senior management of a non-profit organisation?
Answer
The trend of moving away from fixed classifications defined according to training and the length of service is being observed at many organisations. At the same time, it is difficult to find the right balance between the two poles (training/length of service and performance focus) that also gives consideration to the different cultures found at a social level. Depending on the company, this requires a lot of tact, as you will then suddenly find yourself in a situation in which young employees earn more than long-serving, loyal employees with a little less punch.
From my perspective, any classification system needs to be based on a mix of criteria, including the professional requirements as per the requirements profile and job description (basic training, special advisory approaches, IT, etc.), a small percentage incentive for many years of service (i.e. level increase) and a performance component. Depending on the area in which somebody is working, it needs to be defined what is understood by performance.
As social organisations do not make a profit (or are not allowed to by the subsidy providers), no bonuses are paid. There are, however, other forms of recognition that can be deployed as an incentive for long-serving employees: increased support in terms of finance and time for further training, participation in important or interesting congresses, delegation to important project groups and paid holidays. There are even organisations that pay for their management staff to enjoy a wellness week after a particularly stressful period.
