Back to Piecework: Many Companies Now Base Workers' Raises On Their Productivity --- Employees Who Lag Behind Stand to Lose Their Jobs In BankAmerica Division --- Bottom of the Fifth Quintile
Denise Wise, a San Francisco office worker who processes payroll accounts in BankAmerica Corp.'s business-services division, has earned $4,000 in incentive bonuses this year under a pay-for-performance plan designed to reward the productive and punish the deadwood among the bank giant's 86,000 employees.</br></br>She is understandably happy with pay-for-performance. "If you work effectively, there's something in it for you," Ms. Wise says. "That {incentive} wasn't always there before."</br></br>But three of 24 colleagues in her office weren't pleased at all. Although the office achieved 100% of its incentive-plan goals in the first quarter of this year, the three, including a man who had worked there for more than 20 years, didn't get any bonus money at all because their individual performance lagged behind the group's. That long-time employee eventually left the company, Ms. Wise says.</br></br>Pay-for-performance can be ruthless, but it is nonetheless one of the hottest management and labor trends around, according to compensation consulting firms. Under such plans, middle- or lower-level workers are supposed to be judged as their high-powered executive bosses often are, receiving higher raises, bonuses or prizes for excelling on a variety of specific and often computerized measurement indexes. Employees who don't measure up receive little or no pay raise, or are even fired.</br></br>A recent survey of 600 companies by Hay Management Consultants found that one-third intend to push pay-for-performance down the corporate ladder; about 11% currently do so. Another survey, by Hewitt Associates, finds a surprising surge in the use of incentive bonuses for all sorts of workers.