In Part 4 of this 5 part series, let’s take a quick look at the final 3 of these important questions. 3)     Should we also have a long‐term incentive plan (LTIP), and if for which employee groups? We believe that…

In any organization’s discussion of it, there are inevitably questions that arise about incentive compensation: Do incentive plans impact employee behavior in a positive manner? If so, what are the essentials of a short-term incentive plan (STIP)? Should we also…

In part 1, we identified the objectives of performance-based pay. In this article, we’ll discuss the concept of a compensation philosophy. An organization’s compensation philosophy refers to the set of guiding principles that drive decision making about compensation.  This philosophy…

This is the time of the year that organizations start preparing for their year-end performance evaluations and compensation.  Most organizations (small, mid-sized & large) already use a performance-based approach to compensation. That’s because performance-based pay has proven to be the…

For Year End 2016 – 2017, the median base pay increase for employees is projected to be 3.0% across almost all industries.  This will mark the 5th consecutive year that pay increases have held around the 3.0% increase mark. Pay…

In Parts 1 & 2 of this series, we identified the following related to Performance-Based Pay: Objectives Pay elements Balance between fixed (base) pay & variable (incentive) pay Characteristics of Key Performance Indicators (KPIs) In Part 3, we want to…

In adopting a performance based pay philosophy, every organization has to: 1)    Determine the right balance between guaranteed compensation (base pay) & variable compensation (incentive/bonus compensation), including: ➡ If not all employees, which employee groups’ compensation should include a variable…

Objectives of performance based pay Developing a Performance Based Pay (also called Pay for Performance) philosophy starts with an organization clearly identifying what it wants to achieve with it.  Here is an example of the three objectives that a Trinity…

Employee compensation is one of the biggest expenses of companies, but too many companies lack sufficient knowledge as to how to effectively manage it.  Yet these same companies regularly examine & seek to adopt (or adapt) best practices when it…