Economic experts expect a growing economy will continue to support healthy profit and further employee wage hikes. At the same time, economists are starting to see early signs of an eventual correction.
One more hazard for performance-based pay: Employees left out of the program may resent their inability to earn bonus compensation. That’s why it’s important to include everyone – even those for whom it’s difficult to measure quantifiable workplace results.
In a tight labor market, employers must take steps to avoid the loss of their top-performing employees. Steps can include providing performance feedback, allowing employee sufficient autonomy and considering pay for performance models.