However, you must achieve those goals by motivating others in your organization.
Here are 6 steps to making your incentive compensation a success. Determine what the plan intends to accomplish Identify, in detail, the improvable conditions desired, and the likely, attainable behaviours necessary to achieve them. Analyse for appropriateness in your environment. And really determine what you want.
Be specific, because in compensation, it's not what you wish for, hope for, or even plan for A client wanted to reduce worker's compensation claims and their subsequent costs in two of their facilities. Needless to say, this one got ugly before better, to be sure.
Determine participants Realise that missing a key employee or position can put a wrench in the viability and success of the entire plan.
Consider more inclusion than exclusion. The key to success in incentives - the basis of which behaviour is changed - is that the right people must be motivated to do the right things.
If you exclude a group of people, specifically, from an applicable incentive, don't be shocked when they don't put that particular goal achievement at the very top of their daily "must-do" list.
Human nature kicks in here, and employees will, first and foremost, do the things that most benefit their self-interest.
This doesn't mean they're mercenaries, it simply means they're human. Develop clear performance goals These should be simple, supported by historic, valid information, and clearly quantifiable.
Think total goals - the fewer the better. If you exceed 4 or 5, you've gone too far, and are trying to do too much with the plan.
Model the potential payouts to ensure affordability.
Be prepared to pay for incremental improvement, not just home runs. I was working with a metal smelter once; we were implementing a gain-sharing plan whereby line employees would share in all financial improvements from a predetermined threshold. Where we argued, of course, was where to initially put that threshold.
I wanted it at or near the three-year historical performance levels; the client wanted it several percentage points below that. Employees can sniff out one-sided deals.
Determine logistics This includes dates of incentive consideration, payout dates, what is and isn't considered, plan revision procedures, termination payouts, and effective dates of the plan.
All plans should have a starting date and ending date. We want incentives to always remain something extra, don't we? Don't even get me started on how many incentive plans I've encountered that evolved into a bonafide employee entitlement.
Participants must realise the attention given to the incentive plan, clearly understand its parameters and intent, and have ample knowledge to successfully achieve those behaviours necessary to reach various incentive levels.
Tell participants, in plain, easy-to-understand English, what the plan is designed to do, and what your expectations are for their performance within the plan. Sort of like the "whereas" parts of the recitals at the beginning of a contract. Further, the communication should be brief, and again, easy to understand.
If you need four pages for an incentive plan, I'll tell you what you have: One page, maybe a page and a half, for the actual "who does what, and who gets paid" part; the rest to tell participants how they can lose out under myriad conditions. Be direct, and realise there will be judgement calls along the way.
Determine what worked, what didn't, and what can easily be modified or improved for better results. Check payouts against modeling done earlier for accuracy and variations. Don't rely solely on a consultant's expertise. Make sure it passes your own sniff test, and that real dollars are appropriately in play, on both the incentive target side, and the payout side.reasons for this, including the complexity of rewards and their assessment criteria.
The article makes the case for addressing this situation, for not only are rewards a major cost, but there is research evidence to indicate that pay and reward arrangements can. Setting up a compensation plan for your company can be great for employee retention.
establishing a pay-for-performance culture to drive compensation decision making. A compensation system. Retirement plans are an important part of a total rewards benefits package. This course presents a broad overview of employee retirement plans. You’ll take a look at qualified and non-qualified retirement plans, the various plans within those categories, and the advantages and disadvantages of each plan.
High-Deductible Health Plans: A Way to Save on Taxes; Factors to Consider when Establishing an ESOP. ESOPs have many advantages, but they don’t work for every business. For starters, The maximum is typically 25% of pay, up to certain limits.
Establishing chapter 11 establishing rewards and pay plans introduction but the focus in this chapter is pay. rewards review types of reward plans intrinsic rewards.
Download presentation powerpoint slideshow about 'chapter 11 establishing rewards and pay plans' alta an image/link below is provided (as is) to download presentation. Glatfelter is committed to a pay-for performance philosophy in support of achieving the Company’s goals.
We achieve this philosophy by establishing pay practices in the form of fixed and variable compensation, that focus on long-term and short-term performance as well as furthering the goals of Glatfelter.