Compensation

1
Session VII

• Compensation

2
Reward System Integration

• Goal Superior shareholder rewards
• For example reward top management only when
  competition is outperformed
• Determine the real contribution of the SBUs
• Involve frontline managers and workers in the
  process
• Include CSF attainment in the reward system
• Avoid sub-optimizing rewards

3
Jack Stack of SRC on Incentive Compensation

• Incentive compensation is not the same as profit
  sharingyou need cause and effect
• Incentive compensation thrives upon employees
  knowing that they make a difference
• The process must connect actions, decisions,
  results and rewards
• Dont be afraid to change the components of the
  plan

4
GE on Incentive Compensation

• Basics
• Let people know what is expected of them
• Measure those expectations
• Guidelines for Success
• Dont tie pay to power or time of service
• Make compensation comprehensible
• Broadcast success
• Make rewards timely
• Remember that bonus dont last forever
• Augment with non-monetary incentives if necessary
  
• WFO suggestion allow subjectivity for unforeseen
  events
• Modify practices for cultural differences
• Lighten up...youll never be perfect! (and
  neither will your system)