Recruiter calls for more performance pay

Media release 22 May 2008

Recruiter calls for more performance pay

Too few New Zealand companies are using performance pay to motivate their employees, says one of Auckland’s leading recruiters.

The 2008 Robert Half Auckland Salary Guide reveals that 42% of finance and accounting professionals do not receive any form of performance pay.

The guide is based on a survey of more than 1,100 finance and accounting professionals, ranging from accounts payable/receivable to CFOs, across all industries and sectors.

Nine percent of those surveyed said a proportion of their salary was based on company performance, 12% said a proportion was based on personal performance and 37% said a proportion was based on company and personal performance combined.

But that left 42% who did not receive performance pay of any kind.

And in most cases, performance pay accounted for less than 10% of employees’ salaries. This rose as salaries increased – 38% of those earning $100,000 or more had 15% or more of their salary at risk.

Megan Alexander, senior manager with Robert Half said that, at 58%, the proportion of employees who received performance pay was up slightly from 56% last year and 53% in 2006, but it still showed too many employers did not realise the benefits of incentive-based pay.

“A properly-administered performance pay scheme, using a formula all staff can understand, provides a great incentive for increased productivity,” Ms Alexander said.
“Companies really need to take this seriously as an effective tool for improving staff efficiency and engagement.”

Another worrying trend revealed by the survey was the number of people who did not have regular salary reviews, said Ms Alexander. Six percent of those surveyed said they negotiated their salary package less than once a year and another 13% said they never negotiated their salary package.

“That means 20% of Auckland’s finance and accounting professionals do not have regular salary reviews which, in a tight labour market, is quite a shocking statistic,” she said. “If employers want to hold on to valuable staff, and prevent them being poached by the competition, they must offer regular opportunities to review salary and other benefits.”

The 2008 Robert Half Auckland Salary Guide is based on a survey of 1,158 finance and accounting professionals, carried out from 28 January to 15 February 2008. The results of the survey were collated and analysed by Galaxy Research, an independent accredited market research company.

To order a free copy of the guide visit www.roberthalf.co.nz

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