10-2
                   What Is Pay-for-
                      Performance?
            Pay for performance plans signal 
            a movement away from 
            entitlements.
            Pay will vary with some measure 
            of individual, team, or 
            organizational performance.
    McGraw-Hill/Irwin                     © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
                                                                     10-3
              Obstacles to Pay-for-
                       Performance
     Difficulties in specifying and measuring 
       job performance
     Problems in identifying valued rewards
     Difficulties in linking rewards to job 
       performance
    McGraw-Hill/Irwin                     © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
                                                                     10-4
          Exhibit 10.1:  Use of Different
               Variable-Pay-Plan Types
    McGraw-Hill/Irwin                     © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
                                                                     10-5
             Exhibit 10.2:  Base vs. 
                       Variable Pay
    McGraw-Hill/Irwin                     © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
                                                                     10-6
         Pay-for-Performance Plans: 
                         Short Term 
       
       
           Merit Pay 
           Merit Pay 
       
       
           Lump-Sum Bonuses
           Lump-Sum Bonuses
       
       
           Individual Spot Awards
           Individual Spot Awards
       
       
           Individual Incentive
           Individual Incentive
           Plans
           Plans
    McGraw-Hill/Irwin                     © 2005 The McGraw-Hill Companies, Inc. All rights reserved.