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

Implementing apay-for-performancesystem begins by clearlyestablishing expected results. This includes definingperformance outcomesthat are tied to organizational goals. Without clear targets, it’s impossible to fairly measure or reward performance.

Extract from HRCI-aligned HR knowledge: Within theTotal Rewardsdomain, SPHR guidance includes “aligning pay with strategic objectives” and starting with theidentification of business-critical outcomesbefore deciding payout levels. Clear performance criteria ensuretransparency, fairness, and accountabilityin compensation design.