Although remote work, as a result of the COVID-19 pandemic, has been on the labor market for almost 3 years, it can still be considered a relatively new creation – as there are still no relevant regulations relating to it or knowledge on how to manage people performing their duties outside the office. Companies face numerous problems, for example, connected to compensation, communication or performance management. This challenge becomes even more daunting when a company hires people not only from the domestic market, but also from abroad, where the labor market is governed by different rules. What is the best compensation and performance management model for remote workers? Read on to find out more.

Performance management model for remote workers – table of contents:

  1. How to compensate remote workers?
  2. How to manage the performance of remote workers?
  3. Summary

How to compensate remote workers?

In the case of office workers, compensation policies are usually established according to local market conditions – but in the case of remote workers, this rule is considered to be wrong. The same is true when setting the salary based on the employee’s location, since a remote worker can move around and perform their duties from anywhere in the country or abroad. Of course, geographic mapping should be carried out, but it’s also worth analyzing whether remote work is to be just an option, or whether the company will rely on hiring employees outside the office – this fact can’t be ignored.

Companies most often opt for a local compensation plan at this point, adjusting salaries according to conditions specific to the company’s headquarters (e.g., rates prevailing in the capital city, but offered to people living in smaller towns or villages where the cost of living is lower). However, a good solution seems to be the introduction of location-based salaries – e.g., for a given part of the country or the world, or depending on the market (lower cost of living vs. higher cost of living).

Such a solution seems to be the fairest and helps to reach talent in different locations, although of course it is not without drawbacks (it requires, for example, continuous monitoring of multiple markets, which significantly increases staffing costs).

performance management model

How to manage the performance of remote workers?

Remote work raises a number of concerns among managers leading teams in various industries, but without a doubt the biggest one is linked to the lack of control over remote workers, and thus – potential problems in managing their performance. Although most statistics show that the employees’ productivity while working outside the office increases, there are still many managers who have a negative attitude towards this mode of work.

This is because there is no way to check what task an employee is performing at a given time or exactly how much time they spent on each duty (and whether they were engaged in other activities during working hours). Many employers, on the other hand, feel that it is worth trusting them regardless of where they work.

Managers who can’t overcome this fear may choose to implement performance management processes for remote workers. How? A number of solutions can be mentioned here (from regular work reviews, for example, once a week, and creating a remote work policy, to implementing tools that track computer activity), but the best one seems to be to introduce a results-based work environment (setting KPIs) and making sure that regular feedback sessions are held, which can easily show how work has progressed over a given period.

Setting goals that employees are held accountable for achieving by a certain date, fosters the development of the company as a whole, while motivating them to perform their duties successfully. Introducing regular strategy meetings also helps to review recent activities and decide what should be implemented next. If we add performance appraisals (e.g., quarterly or semiannual), we can stop worrying about productivity, because we will monitor it regularly – and, based on the results, draw conclusions about the results of the employee’s efforts.


The labor market around the world is constantly transforming, and companies wishing to offer the most attractive and competitive employment conditions must introduce innovative solutions or policies, also in the area of compensation and performance management of remote workers. The two models presented above seem to be the most suitable for people who want to work away from home.

However, it is certainly worth testing different solutions in this regard – in order to find the most suitable one for a particular company (in terms of the industry where it operates, size, type of the company, number of employees, market position, etc.). It will also be a good step to commission a survey and get to know the opinions of potential remote workers on the discussed solutions.

Read also: What is a chief heart officer?

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Author: Nicole Mankin

HR manager with an excellent ability to build a positive atmosphere and create a valuable environment for employees. She loves to see the potential of talented people and mobilize them to develop.