Is your paycheck now tied to your performance? Discover the shift in compensation trends.

  • 28% of companies are incorporating incentive pay into new roles.
  • Incentive pay is becoming more common across various job roles, not just sales.
  • Workers report mixed feelings about bonus-based compensation, with some feeling misled.
  • Clear and attainable bonus structures are crucial for employee satisfaction.
  • Companies are gradually shifting to pay-for-performance plans.

A growing number of Americans are finding themselves in jobs where part of their pay is not guaranteed. According to a 2024 survey by the Alexander Group, 28% of over 300 companies are integrating incentive pay into new positions. Traditionally, this model has been prevalent among sales personnel and executives, but now it is expanding to include roles like accountants, HR managers, and marketing assistants. Employers believe that linking pay to performance can enhance productivity, and many high achievers are excited about the potential for increased earnings. However, some employees are concerned about the risks involved, as they may end up earning less than expected. For instance, Hannah Brown, a chief of staff at WalkMe, shares that she has a quarterly target bonus of 11% of her salary, which is partly based on her department’s performance and her personal goals. While jobs closely related to sales are more likely to adopt this pay structure, companies like WalkMe are applying it across various roles. The key to employee acceptance often lies in how transparent and fair the bonus system is. Some workers feel frustrated when bonuses are used to compensate for lower base salaries. Miriam Gershenson, a job seeker, experienced this firsthand when a consulting firm offered her a salary that was 10% lower than expected, with the rest dependent on bonuses tied to performance metrics. She ultimately declined the offer, emphasizing the need for a stable base salary. At WalkMe, most employees not on sales commissions can earn quarterly bonuses starting at 8% of their salary, with the potential to earn up to 120% of their target bonus based on performance. Shira Shriki, a procurement manager at WalkMe, appreciates the clear and attainable bonus structure, which she has consistently met since joining the company. As companies gradually transition to incentive-based pay, experts advise job seekers to ensure that bonuses are tied to measurable performance metrics and to be prepared for fluctuations in earnings. Dan Goodman, an employee advocate, suggests that candidates should expect the worst and hope for the best when it comes to bonus compensation.·

Factuality Level: 7
Factuality Justification: The article provides a detailed overview of the trend towards incentive pay in various job roles, supported by survey data and personal anecdotes. However, it includes some subjective opinions and anecdotal evidence that may not represent the broader workforce experience, which slightly detracts from its overall objectivity.·
Noise Level: 7
Noise Justification: The article provides a detailed analysis of the trend towards incentive pay in various job roles, supported by examples and quotes from individuals affected by these changes. It discusses both the potential benefits and drawbacks of such compensation structures, holding employers accountable for their practices. However, while it presents relevant information, it could benefit from a deeper exploration of the long-term implications and systemic effects of this trend.·
Public Companies: SAP (SAP), Gong (N/A)
Private Companies: WalkMe,CaptivateIQ,Alexander Group
Key People: Hannah Brown (Chief of Staff), Miriam Gershenson (Former Recruiter), Shira Shriki (Procurement Manager), Mark Schopmeyer (Co-founder and Co-CEO), Simon Frey (Head of Customer Outcomes), Dan Goodman (Employee Advocate)

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Financial Relevance: Yes
Financial Markets Impacted: The practice of incentive pay is impacting companies’ payroll costs and employee compensation, potentially affecting the income stability for some workers.
Financial Rating Justification: This article discusses the increasing trend of incentive pay programs in various industries, where a part of workers’ pay becomes contingent on completing prescribed goals. This can lead to higher productivity but also introduces risk and uncertainty for employees regarding their income. It has implications for companies’ payroll costs and may impact employee satisfaction and job hunting decisions.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses trends in incentive pay and employee compensation but does not report on any extreme event that occurred in the last 48 hours.·
Move Size: No market move size mentioned.
Sector: All
Direction: Up
Magnitude: Medium
Affected Instruments: Stocks

Reported publicly: www.wsj.com