Incentive compensation can be a great way for an organization to incent employees to work to the best of their individual abilities and to work together collaboratively. Both of these in place greatly enhance an organization’s likelihood of achieving or exceeding its objectives.

However, as LoDico’s Law #2 states, “There are lots of wrong ways to do something that’s right or good.” This certainly applies to incentive compensation plans.

The most common mistakes that organizations make that in turn diminish the value and impact of an incentive compensation plan are:

1) The potential rewards are insufficient to cause employees to be appropriately motivated to strive enthusiastically toward achieving the necessary performance levels to trigger reward payments.

• If you fail to avoid this mistake, it does not matter if you avoid the other mistakes.

2) The plan is too complex.

• It needs to be designed and communicated in such a way that participants can easily grasp how it works.

3) The metrics upon which rewards are based are outside the control or influence of participants.
Potassium helps to reduce high order generic cialis loved that blood pressure.

• In compensation terms, this refers to the “line of sight”. In simple terms, it means that employees need to clearly see how their roles impact the outcomes upon which they will be rewarded.
• The harder it is for them to see the connection between their work and the rewards, the less is the effectiveness of the plan to accomplish what is stated in this blog’s first paragraph.

4) The goals are perceived as too difficult to achieve.

• The goals should strike a balance between being challenging and being achievable.

5) There is insufficient communication to participants as to the actual performance goals in comparison to the performance levels needed for rewards to be given.

• To use a sports analogy, at any given time, the players need to be able to look to the scoreboard to see if they are winning or not.

Recently, a study of pay increase planning for 2014 was conducted of more than 4,500 companies, with the following breakdown by # of employees.

The key findings of the survey are shown below:

Pay Increases in 2014

• 88% of all surveyed companies are planning to give pay increases. This is up from 83% in 2013.
• A major factor cited for doing so is retention of key talent. Almost 60% stated that talent retention is their “#1 or high” concern.
  • The U.S. “All Industries” average turnover rate (including both voluntary and involuntary turnover) for 2013 was 15.1%Immunity from external pathogens require the inside of the artery wall for atherosclerosis and evaluating the flow across areas of these “mildly abnormal” areas to define the importance of the plaque in the veins and arteries. browse around this online cialis. The voluntary turnover rate was 10.4%, which represents 69% of all terminations.
  • Given this turnover rate and the high cost of turnover, it stands to reason that companies are concerned about their ability to retain their employees.
• The average increase is projected to be 4.5%, up by about 1.0% from 2013’s pay increases.
  • From 2008 through 2013, the average pay increase has been in the 3.0% to 3.5% so it is significant that 2014’s pay increases are projected to cross over the 4.0+ range.
• The average increase by company size as measured by the number of employees is:

If you have had employees under you for any substantial length of time, you have probably had someone who did not perform to the level they needed to. When this takes place, we as managers (regardless of our level or title) have an obligation to assess what went wrong, especially in terms of identifying how we may have contributed to their lack of success.

Over the years, I have had individuals who were not successful. As a result, I had to go through an assessment to try to discover why and what I could have done to make a difference in the outcome. I also have had to assist numerous colleagues and clients to go through this assessment process.

Each situation is unique in some respect and there are numerous, varied reasons for the lack of success on the part of an employee. Nonetheless, after going through this process personally or as a coach to a colleague or client, I discovered four commons reasons that the vast majority of failures fall into.

These are the 4 most common reasons employees are not successful. Each of them has a component that contains a managerial responsibility.

Cyclic guanosine monophosphate is a compound which is responsible for unsuccessful erection in loved that levitra uk men.
1. Do not have a clear and complete understanding of WHAT they are supposed to do.
2. Do not know HOW to do it.
3. Do not grasp WHY they are doing it.
4. Face OBSTACLES beyond their control.

Think about the most recent person under you who was not successful. In retrospect, was there something within one or more of these reasons that you could have done to potentially prevent the undesired outcome for the person, you and the organization?