Four hard questions managers will face on incentive compensation management

by on June 11, 2009 · 0 Comment POSTED IN: HR Info Center

Incentive compensation management is usually based on ever-increasing team and corporate performance

  1. “I didn’t get my bonus because there’s no way I could influence results.”
  2. Incentive compensation management decisions are often more a reflection of group performance. If we don’t achieve more than expected as a company, we don’t make more profit than expected as a company most bonuses aren’t funded properly.

    And if the incentive compensation management plan is not funded properly, your individual component of that isn’t near as important. If we fund it properly, if we’ve done all the things on the big picture, then your smaller portion of the thing kind of kicks in. But most good bonus structures are going to have 65%, 75% of the emphasis based on group performance in which you could influence, probably more than this was indicating but not on a one to one basis.

  3. ” I did great but all those slackers on my team caused me to lose out. The team incentive idea is unfair.”
  4. This may be another argument you will encounter about the disparity between individual and group incentive compensation management plans

  5. “Last year, we did great. This year, we increased the bonus criteria dramatically it’s almost like we’re being punished for doing well. We’ll never hit these new goals.”
  6. That question brings up the basics behind incentive compensation management. Employees kind of get used to a certain threshold and expect that the following year. It’s pretty much the way most people do it, most companies do it. We’re all built on a growth model and the critical question asked is: “What have you done for me lately and how do we continue to grow the organization?”

  7. “I know I’m working off-site three days a week this year but why did my – why did you decrease my salary? I do the same amount of work.”
  8. Usually that’s – a company doing that kind of thing is trying to cut costs. And they’re trying to sell the idea, in this case, that being at home, not having to go to the Laundromat or buy an expensive wardrobe on those days is going to save you money, let alone the commute in and out. There are some costs associated with them getting set up and everything else.

    This looks like a way for that company to try to make it through difficult times or new times. And they’re sharing the pain a little bit with you in that reorganization. Reality is you’re probably doing okay. But that’s the reality.

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