Seven core principles of incentive compensation management
  • Blog post

Seven core principles of incentive compensation management

Incentive compensation management should optimize a win-win situation for both the company and the employees

  1. Stop de-motivating people with your compensation management system.
  2. Base performance evaluations on relative results and eliminate negotiations as part of compensation management
    In later posts, we’ll show you how you can use league tables in other ways to overcome some of the typical problems that we have.

  3. Ensure that rewards in your compensation management system support the company strategy and values.
    In many cases, we pay for things that are often contrary to strategy. Not even supporting it, but often, it’s working against it. Let’s focus on how we can bring those back.
  4. Base your incentive compensation management on rewards , base rewards on performance of teams.
    And we’ll talk about the difference between incentive compensation management based on individuals and team comp

  5. Create a positive peer pressure to perform.
  6. Recognize and celebrate exceptional performance.
    Some teams have driven results far better than anybody would ever have been able to predict. Look at compensation management as a total picture, not just dollars and cents

  7. Give everyone a stake in the success.
    Later posts will talk about what that can mean in terms of what you’re trying to do.

 

Edited remarks from the Rapid Learning Institute webinar: “How to Avoid Incentive Pay Plan Disasters” by Steve Player

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