Pay for performance sounds straightforward in theory – reward your best people more, and they'll stay motivated while driving better business results. But in practice, it's one of the most complex challenges compensation leaders face.
How do you objectively define a "top performer"? What happens to your reliable, steady contributors when all the focus goes to standout achievers? And how do you handle high performers who are already at the top of their salary bands?
For our Reward Community Office Hours in June 2025, Ravio's Chief People Officer Vaso Parisinou was joined by Ekaterina Potter, Global Director of Total Rewards at commercetools, who shared candid insights on implementing pay for performance at a rapidly scaling tech company.
If you missed it, below you’ll find the full recording as well as the key takeaways and insights from the webinar.
One of the biggest challenges with pay for performance models is ensuring consistent, objective evaluation of what constitutes "high performance" across an organisation.
Ekaterina shared how commercetools evolved from ad-hoc performance assessments handled primarily by C-suite leaders to a comprehensive system that involves all managers.
“One thing we’ve really changed is that now all managers are taken on a journey to work through performance management, ensuring they fully understand the need for it, grasp the different categories of how we evaluate performance, and are clear on all the concepts and terminology involved.”
At commercetools, a combination of several things helps to ensure that performance evaluations are as objective as possible:
A central theme of the discussion was challenging the assumption that companies should be aiming to hire and retain the best possible performers across the board.
“There’s always a significant proportion of the workforce that are solid, robust workers, and I believe that most organisations need those employees,” Ekaterina explained.
The speakers highlighted several important considerations:
This doesn't mean accepting mediocrity, but rather recognising that a healthy organisation needs different types of contributors.
💡 Ideas for supporting your reliable performers:
One of the most practical challenges discussed was how to reward high performers who are already at or above the maximum of their salary range without creating outliers – a common situation as companies mature and high performers accumulate increases over time.
The poll results from the webinar showed this is a widespread challenge, with lump sum bonuses (44%) and salary increases (23%) being the most common approaches.
Ekaterina shared commercetools' approach: “Our managers are instructed not to put forward salary increases that would make team members exceed their range. In some exceptional cases where there’s clear justification we will allow increases above-band, but typically we look to pull other levers to reward that individual for their contributions.”
For those at or above band maximum, commercetools uses:
Perhaps the most important takeaway from the discussion was Ekaterina's emphasis on peer-to-peer learning: "Pay for performance is a topic where there isn’t one right answer, and I don't think anyone can have the ultimate knowledge on the subject – I’m seeing this discussion very much as a peer-to-peer exchange.”
That’s exactly why we run our monthly Reward Hours sessions: an opportunity for Reward leaders to come together to discuss challenging areas and hear how different companies approach those challenges in different ways.
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