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Question 89/151

The first step in implementing a pay-for-performance system is to:

A. Determine the amounts to be paid for achievement

B. Establish the expected results

C. Establish mutually accepted standards

D. Negotiate the annual appraisal plan

Correct Answer: B

Implementing a pay-for-performance system begins by clearly establishing expected results. This includes defining performance outcomes that are tied to organizational goals. Without clear targets, it's impossible to fairly measure or reward performance.
Extract from HRCI-aligned HR knowledge: Within the Total Rewards domain, SPHR guidance includes "aligning pay with strategic objectives" and starting with the identification of business-critical outcomes before deciding payout levels. Clear performance criteria ensure transparency, fairness, and accountability in compensation design.

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