I was wondering what is the level of compensation that would be perceived by someone as a fair reflection of contribution? After studying this for a while I concluded that 15% is the tipping point, above which people feel rewarded as opposed to just fairly compensated.
At 5% most people perceive the gesture as a correction and do not attach any rewarding value. Examples in this category include adjustments for inflation, convenience fees, acceptable margin of error etc.
10% is considered an entitlement by most people – expectation of discounts built into the price, reasonable profit margins, bonus for meeting expectations etc.
A compensation factor around 15% starts to receive a rewarding meaning: tips for waiters in a restaurant, eye catching discounts for “on sale” advertising. When it comes to a salary increase, unless it is at this level a person will interpret it as being either a simple correction (5%) or the result of a regular performance review (10%). Only at 15% the increase will be perceived as promotion related.
Tuesday, September 9, 2008
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment