The longstanding practice in the company of basing pay primarily on position tenure, shifting to pay for performance will require careful planning, implementation, and operation to facilitate the organizational change that produces a performance-based organizational culture. Such organizational change impacts readiness for implementing pay for performance, but company need not wait for the ideal organizational culture to be present before they move forward. Pay for performance can serve to drive an organizational culture in the desired direction (Kaplan & Norton 2001).
Company must tailor pay for performance systems to their mission and environment