Website Launched:  12/26/1994 Last Update:  2/14/2013 The Integrity Center, Inc. "objective risk management services" (972) 484-6140 [ Since 1984 ] HOME Reference Articles   SCREENING Check List Backgrounds TUTORIALS SERVICE MENU FCRA THIS COMPANY Our Methods Why Use Us Myths Pitfalls CHECK MYSELF CHECK NANNY USEFUL LINKS Library Statistics PRESS RELEASE The Integrity News Vol. XI No. 33 ISSN 1081-2717 December 16, 2002 Business Week December 16, 2002 (pgs. 90-92) Compensation --- Now It's Getting Personal "One size fits all compensation schemes are dead --- now, companies drill down  into their employee data to zero in on the  perks that will most spur your personal  productivity." CUSTOMIZING COMPENSATION The OLD Human Resources Approach vs. The NEW Human Capital Management Approach The OLD Way Pay is based on salary grades or hourly rates Bonuses are tied to Unit and Company performance Benefits are standard throughout the company Management strategies are modeled after the best practices at high- performing companies Career structures are predetermined The NEW Way Pay is based on achieving goals Bonuses are tied to Individual Performance Benefits are tailored to employee groups Management strategies are based on an  internal analysis of current employees Career structures are sculpted to individuals "This is the new thinking in the new HR." "With the new technologies, companies  can now accurately measure the ROI on their employees." "Get ready for the next wave of pay-for- performance. Think of the whole process as piece-rate pay updated for the 21st century." "The new compensation schemes enable companies to: blow the cover off dead-wood, transform payroll from a fixed to a more flexible cost, and let stellar producers reap outsized rewards." "Companies are slicing and dicing employee data --- considering things such as tenure, commute time, education, and the office conditions that you are willing to tolerate --- to predict your behavior when they customize your individual compensation package." "Instead of a relatively collective workplace, a new era is approaching in which people working alongside one another, doing the same jobs, could have wildly different deals." Does this remind you of airline fares ? Of course, all of this has to be done without sabotaging morale. Teamwork can implode. Some experts worry that this approach will make everyone a free agent. Other experts worry that this could all lead to legal objections, especially when it comes to rewarding or penalizing employees differently. 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