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How to design, introduce and run a performance-related pay scheme

A guide explaining how to design, introduce and operate a performance‑related pay scheme, including legal, contractual and equality considerations.

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By Sylvia Doyle

A guide to designing and running a performance‑related pay scheme, including scheme design, performance assessment and key legal and equality considerations.

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  • What is performance-related pay?
  • The benefits of using performance-related pay
  • Risks and challenges
  • Deciding whether to use performance-related pay
    • Reviewing current pay arrangements
    • The performance management framework
    • The pay budget
    • Equality and performance-related pay
    • Contractual issues
  • First steps
  • The role of line managers
  • Employee buy-in
  • Scheme design
    • Scope
    • Performance assessment
    • Timing of performance reviews and pay awards
    • Performance ratings, pay and progression
    • Using other measures alongside individual performance
  • Implementation
  • Performance-related pay scheme review

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About the author

Sylvia Doyle

Sylvia is managing consultant of Reward First People Consulting. She is also a Fellow of the CIPD and a CIPD programme lead tutor for its postgraduate reward programmes.

Her expertise includes: pay structures; total reward; variable pay; executive remuneration; and strategic reward to develop pragmatic reward solutions.

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