Understanding the overall business strategy, in order to make this this work a good understanding of the specific goals of the company must be in place. The compensation plan needs to align with and reinforce the company’s mission, goals, HR strategy and compensation philosophy ("9 Critical Steps For Successful Pay For Performance Compensation Plans", 2016).
Pinpointing the source of poor performances within the company, what is causing employees to not perform well? Is it truly something that would be solved by offering them more money? Or is it something else? It can be easy to assume that the issue is compensation but it is not always the cause for poor performance.
Having key strategic objectives, for example if you are wanting to improve customer satisfaction the way you offer the pay-for-performance will vary compared to if you are needed to improve productivity or process improvement. You need to have a clear understanding of exactly what areas you want to see improvement in and apply the pay-for-performance accordingly in order to make it work.
There needs to be a clear outline of actions needed so that employees have a complete understanding of what is expected of them in order to meet the goals. Communication is going to huge and objections need to be communicated to managers and employees, allowing them time to review. Once it is in process communication needs to continue, as ongoing feedback will be needed to update employees on their progress. You are going to have to remain engaged and keep in mind that this is an ongoing process.
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