How employers can improve pay and incentive programs

Barely half (52 percent) of employees say their employer does a good job explaining pay programs and employers agree — just 53 percent say their employees understand how base pay is determined, according to a Towers Watson infographic.

Some employers do better than others in this area — they offer a highly evolved employment deal, defined by Towers Watson as one that is "formally articulated, well executed, customized for different employee segments and differentiated from those of competitors."

Highly evolved employers do three things differently when it comes to pay programs:

  • Communicate with employees about how base pay and short-term incentives are determined
  • Equip managers to execute pay programs effectively, like providing tools and training to reflect performance in pay decisions and have discussions with employees
  • Differentiate pay based on performance

More articles with Towers Watson:

How relative performance indicators can be used to determine executive compensation
The new physician employment model and malpractice insurance: What you don't know could cost you
Employers expect healthcare costs to rise in 2015 

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