Performance Linked

July 21, 2012 (LBO) – Sri Lanka’s ‘pay for performance’ schemes should be carefully designed to be fair and transparent and linked to a firm’s short and long term goals while incorporating the organization’s core values, top corporate executive said. Performance based pay schemes can also drive employees to focus excessively on hitting targets to gain rewards at the expense of other things that would help the organization.

It can cast a shadow over self-esteem, teamwork, and creativity of employees and lead to increased frustration among individuals and teams.

Peiris said its performance management system at John Keells Holdings is based on the core values of trust, integrity, excellence, caring and empathy.

“If people don™t live by those values irrespective of their operational performance they will be marked down,” Peiris said.

Tillakawardana said performance based reward schemes should be transparent and clearly communicated to employees if the organization expects to change the employee’s behavior to become more productive.

“Sometimes pay performance schemes are there but not very well communicated. End of the year no one knows how it has been worked out,” Tillakawardana said.

“This has no effect because you are