Editor's message: Many organisations link either all or part of the pay awards made to individuals to an assessment of their performance - measurements of performance can include competencies, skills and knowledge as well as results and achievement of objectives.
However, a performance-related pay scheme (also called a merit pay scheme) has to be carefully designed to ensure it will fit with the organisational culture and values and have the confidence of employees.
Although performance-related pay awards are common in certain sectors of the economy - such as finance - they account for only around a quarter of the pay awards made each year.
Sheila Attwood, managing editor, pay and HR practice
Updated to include information on trends in performance management.
Almost a quarter of pay settlements recorded by XpertHR are based on individual performance. Here we look in more detail at these pay awards and how organisations allocated pay increases over the 2015/2016 bargaining year.
As employers start to plan their pay award budgets for 2017, XpertHR looks back at the pattern of pay awards over the past year.
In this week's podcast we discuss how employers can measure, and then reward, employee performance, as well as highlighting some of the issues that employers should be aware of when using performance-related pay rises.
XpertHR editors Laura Merrylees and Sheila Attwood discuss the practical implications of running a performance-related pay scheme, from how to measure employee performance to the key role that line managers play.
Our survey looks at the practicalities of running a performance-related pay scheme and the effect that this method of reward actually has on employee performance.
Practical guidance on introducing a performance-related pay rise scheme.
We take a look at performance-related pay schemes, including how performance is measured and pay rises are determined.
Latest XpertHR analysis examines pay awards based on individual performance in the year to the end of August 2015, including how organisations allocate pay increases to individuals.
Definition from the XpertHR glossary.
HR and legal information and guidance relating to performance-related pay.