More performance pay, say NZ workers

Workers say they would put in the hard yards if their pay was linked to performance, but at least one union says money is not a magic bullet for higher productivity.

A global survey, which includes the view of 3500 New Zealand workers, has found that almost half who are not on performance-based pay believe they would perform at a higher level if their earnings were linked to performance or productivity.

The Kelly Global Workforce Index questioned more than 120,000 employees from 31 different countries.

According to the survey, New Zealand has one of the lowest levels of performance-based pay in the Asia Pacific region, with just over a third of employees having a portion of their pay tied to individual performance or productivity targets.

Nearly 60 per cent of employees in the Asia Pacific have some form of performance-based pay, with the highest rates in China, Indonesia and Thailand.

Only Australia had lower levels of performance-based pay in the region with 29 per cent.

Public Service Association national secretary Brenda Pilott said performance pay was used in local and central government during the late 80s and 90s, and didn't work then.

"It was presented as a way to reward effort and lift performance. What was not made explicit was that it was a way to contain salary costs and circumvent the collective bargaining process, Pilott said.

"We don't believe performance pay leads to improved performance - especially in the public sector because unlike the private sector work is not profit-driven or influenced by things such as sales margins."

There was a lot of evidence showing that when people doing the same job were paid differently, it created unhealthy workplace competition and eroded any sense of teamwork or collegiality, which could ultimately affect work programmes and productivity, she said.

However, Employers and Manufacturers Association employment services manager David Lowe performance-based pay was "the norm".

"What the survey is saying is `If I'm doing a good job and my remuneration is dependent on me doing a good job, that is enough to incentivise me to work well wherever I happen to be'.

"And that's true."

It was a reflection of how the "modern" workplace worked, he said.

Kelly Services general manager commercial New Zealand Wendy Hewson said it was clear from the survey that more businesses could introduce some form of performance-based pay in order to achieve greater levels of productivity.

The survey also found that while only a quarter of the workforce spent at least one day a week working from home, those who did believed they were more productive.

Lowe and Pilott both said working from home was dependent on the worker and the job.

Lowe said while sometimes it worked, there could be some jobs where interaction between employees was important.

Pilott said it should be included as part of flexible working arrangements with good support in place for those staff who wanted to take advantage of it. However not everyone would want to work remotely and it shouldn't be imposed without agreement.

Hewson said a third of all employees who worked from home, said they tended to work longer hours and take fewer breaks when they were away from the office.

"Employers need to work closely with their staff to understand what motivates them - whether that is an incentive scheme or the opportunity to spend at least part of the week working from home."