Bringing Corporate America into Line

In corporate America it is impossible to reward high performers because of the way performance is measured.

Each position should be rated hourly or salaried up-to and including the position of Chairman of the Board and assign dollars to the job either by the hour, week, month, etc. Each year if the incumbent passed the performance review, meaning they were not fired, they receive a cost of living raise. Based on their performance they would be given an amount of money, with no regard to percentage. The amount could be in two parts such as one for their performance and one for the performance of their group or department or the company. That would be their pay for that year.

The common way is to reward people for the rest of their work life for good jobs early in their career even if they fail to meet performance criteria and due to age or gender or other EEO points the they, in affect, have tenure.

The current way makes it impossible to catch people up to the appropriate level and is especially harmful to women who have been slighted in the past.

Dollars assigned to positions should reflect that fact that the CEO can fail if a lower paid individual fails in a critical position or time so the highest pay should not exceed a percentage of the lowest paid employee. If the lowest paid position is $15,000 per year then the CEO should not exceed "N" times, such as 100 times or $1,500,000. Position should be the only consideration and not the fact that one person is paid more than another person and you want to catch them up. If they want more money they take a different job or increase their performance rating. For new employees they might have a certain amount withheld for 6 months or so until they prove that being new does not affect performance. At the end of the six months they are paid the same base as another employee who has been there for 30 years.

Ratings for people in management or supervisory positions should consider the ratings of the people under them. For example a manager should not be rated higher than n% of the people within their area of responsibility. Of course at least two other people chosen by the HR department or someone who can be trusted should agree with the supervisors ratings of the people within their area. That goes all the way to the top.

With the current commonly accepted practices women will continue to be slighted. The basic rating system must change.