Employees back performance related pay

Rotorua employees would be more productive if their pay was tied to performance and they could work more from home, a new survey has found.

The Kelly Global Workforce Index surveyed more than 120,000 employees in 31 countries - including over 3500 Kiwis - and found we had one of the lowest levels of performance-based pay in the Asia Pacific region.

Rotorua Chamber of Commerce chief executive Roger Gordon said while he was unsure how many local businesses gave employees performance-based pay benefits, the scheme was not suitable for all workplaces.

"It depends how critical the achievement of KPI [key performance indicators] is to that company.

"So key performance indicators are - for example - for the achievement of a certain level of sales, or a certain level of contracts."

While performance-based pay benefited the real estate industry, the same could not be said for a doctor, Mr Gordon said.

"You couldn't really imagine a case where a heart specialist was paid [extra] for the number of heart operations he did - that wouldn't be appropriate."

Mandy Pol, recruitment specialist at Talent ID, said many larger local companies used performance-based pay as it helped get employees invested in the company.

However she said it was unlikely to be successful unless the employee was able to control their workload. "It can be rather demotivating to know that you can not achieve your target because you are relying on other people or do not have the resources or authority to act."

The latest Statistics NZ figures show the median weekly income for those in paid employment in the Bay of Plenty region was $740 a week - below the national median of $800.

Rotorua-specific figures were unavailable.

The survey found that just over a third (36 per cent) of Kiwi workers had a portion of their pay tied to individual performance or productivity targets.

Nearly 60 per cent of employees in the Asia Pacific had some form of performance-based pay, with the highest rates in China, Indonesia and Thailand (75 per cent).

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

However, half of Kiwi employees not currently receiving performance pay said they would lift their performance if their earnings were linked to achievement or productivity.

Kelly Services NZ spokeswoman Wendy Hewson said it was clear from the survey that more local businesses could achieve greater levels of productivity if they introduced some form of performance-based pay.

The survey also found 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.

Respondents said key benefits included minimising the time and expense of commuting and working with fewer interruptions - resulting in greater focus and productivity, and more flexibility to deal with unexpected personal requirements.

Disadvantages included the loss of opportunities for collaboration and networking, a feeling of isolation from colleagues and managers, and reduced access to company information and involvement.

However, a third of employees who worked from home also said they worked longer hours and took fewer breaks.

Ms Pol said working from home was becoming more common in Rotorua, but its success depended largely on the type of organisation, supervisor and the employee themselves.