Trust Managers to Run Incentive Compensation Management Effectively

by on June 22, 2009 · 0 Comment POSTED IN: HR Info Center

Incentive Compensation Management Relies On Trust

Managers will become more effective managers if they’re able to handle issues related to incentive compensation management by themselves. They should be able to answer very basic questions. HR shouldn’t dictate how incentive compensation management should be run. You really should manage the compensation system on a budget basis.

Your job, for example, with a salary increase percent or a merit increased budget is to manage that budget. You may find that some managers are over the budget. When you finally get their recommendations it could be that some of them are under it. I don’t think your job is to really say, “You’re too far over, you’re too far under.” I actually think that somebody else’s job to say that.

Needless to say, you do want your responsibility to be to make sure that that budget is here on a company wide basis. It’s probably up to the boss or the CEO to say, “Go back and trim your salary increases.” You can’t tell, small organization you might be able to tell, a large organizations probably not. You may just have a hot performing group or a group out of whack in the performance ratings and that have over spent their merit budget. That’s a possibility and it maybe the right thing to do in this situation.

If you set the guidelines, set the budgets, train your managers and trust them, they’ll do a good job handling incentive compensation management.

Most employees don’t think their managers are very strong leaders. We should have lots of training for managers and address weaknesses. Part of our job in the Human Resources area is to build strong managers.

And there was a pole here recently by Gallup that suggested that good managers are actually a little bit different than other managers. They select their staff based on talent rather than experience or education. They somehow are able to see what people are able to do regardless of what their experience or education are, they actually help them to find what the objectives are and outcomes. And they let them run with it. They literally just get out of their way and let them do their thing.

They also have a tendency of focus on individual strengths. If you have played on teams sports, you know that lots of coaches have different styles but one of these styles that actually think works very well is building their team around the individuals that they have. In playing to the team or in the individual’s strengths, try to manage around the weaknesses if you can. And then just make sure you have the right person in the right job on one of these people who tend to think that any individual can be a star. It’s just finding the right job for her or him.

Edited Remarks From “The 7 Deadly Sins Of Employee Compensation Plans (And How To Fix Them)” by Rick Olivieri

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