The HR Hub Incentive compensation
Aug 10, 2021
In this discussion with David Pan, Director of Global Compensation and Analytics, listeners dive into the nuances of incentive compensation. He shares pitfalls like favouritism and the risk of bonuses becoming perceived as base pay. The conversation emphasizes clear communication, the importance of a tailored compensation philosophy, and innovative structures like equity plans. Pan also highlights the value of team performance over individual bonuses and the need for flexibility in goal setting to adapt to organizational changes.
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Clear Communication of Bonus Targets
- Clearly communicate bonus targets and performance triggers to employees.
- Ensure employees understand goals to effectively drive desired behaviors.
Compensation Philosophy Shapes Bonuses
- Bonus structure depends on the organization's compensation philosophy.
- Components may include corporate, business unit, and individual performance weightings.
Who Benefits Most From Incentives
- Incentives best suit roles with large output variance impacting the business.
- Bonus programs also foster employee inclusion and investment in company success.