Compensation Cafe: Promotions, Bonuses, Raises, Recognition – When They Work (and When They Don’t)

RecognizeThis!

You can’t give all employees promotions, bonuses, or raises. My post this week on Compensation Cafe was triggered by it being “the season of giving.” ” Many companies distribute annual bonuses around the holidays, leading me to ponder the best time and use for bonuses as well as the other major reward methods of promotions, raises and, of course, recognition. Recognize This! - They become an expectation and it’s a very poor use of budget.

Money for Motivation: How Incentive Based Pay Works

UpstartHR

Last week I was talking with some folks about using compensation to drive employee behavior, and it occurred to me that I have never shared anything about that topic here. We want to instantly think that we can drive performance or discourage behaviors through monetary incentives.

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Is Santa Administering Your Incentive Plan?

Compensation Cafe

The end of the business year, when managers everywhere turn their thoughts to – bonuses! For many of us in the trenches true pay for performance is an elusive concept best remembered from Compensation 101 textbooks, suitable only for life as it should be, not as it is.

Promotions, Bonuses, Raises, Recognition - When They Work (and When They Don't)

Compensation Cafe

You can’t give all employees promotions, bonuses, or raises. Promotions are valuable, but we must ensure promotions are also real in that they advance a person’s career with the appropriate compensation increase. To state the obvious, raises change base compensation levels.

Do Your Incentive Plans Motivate Choking?

Compensation Cafe

Could it be that we are designing and communicating incentives for our highest performance all wrong? This study specifically looked at the impact of incentives on motor and neurological performance in high-pressure situations. Dan is a leading expert on equity compensation issues.

One Way to Revive Tired Old Compensation

Compensation Cafe

I’ve been reading a lot lately about what Compensation will look like in the future and I remembered a project that I had once worked on. Yes, some companies offered flex benefits but this situation included cash compensation as well. What if they handed over control to employees to configure the amount of their own benefits, perks, and cash compensation creating a package unique to their own personal situations. Compensation needs to be too.

A Possible Direction for 21st Century Rewards

Compensation Cafe

And the incentives to get performance management right – which are already considerable in a globalized/first mover advantage/tournament economy - are going to be even greater if base pay ceases to be one of the levers to pull. .

Retention and Rewards: The Double Edged Sword

Compensation Force

As one example, some organizations have elected to deliver a premium-level compensation package to their employees. Base Salary Management Bonus/Incentives Compensation Philosophy Pay for Performance Employee retention is a double edged sword.

my boss keeps touching my hand, the point of bonuses, and more

Ask a Manager

What’s the point of giving bonuses? Please explain to me the point of bonuses in the workplace. I understand bonuses for exceeding sales quotas for sales people or a “sharing of the wealth” when a company has a spectacular year. But why give employees an “incentive” for what is basically doing the job they were hired to do? How do these bonuses benefit the company? It’s five answers to five questions. Here we go….

There May Still Be Enough Time!

Compensation Cafe

You may have already completed performance appraisal discussions, but performance should certainly be part of the discussion when 2014 increases and bonuses are covered with employees. Treat yourself our popular ebook, Everything You Do (in Compensation) Is Communication.

The (Surprising) Facts About Motivation

Kazoo

The default style management has used to motivate their employees is the stick and carrot incentive. For starters, if the incentive isn’t compelling it doesn’t work. What kinds of incentives might a company use to influence employee behavior?

Update: Employee Compensation at Wells Fargo

Compensation Cafe

Compensation Cafe has covered Wells Fargo's pay practices since 2009, when the Bank canceled prefunded employee recognition and rewards events in the midst of the Recession, blaming it on federal government restrictions on bank practices following the subprime mortgage crisis.

A Quick-Start Guide to Creating a Salary Structure for Your Company

Insperity

Define compensable leverage for your company. Compensable leverage refers to how much more or less salary rate increases in your company, overall, compared to the market rate increase for higher-paid positions in the organizational hierarchy.

Cafe Classic: Predicting the Next 10 Years of Compensation

Compensation Cafe

As someone who spends a lot of time designing and honing long-term incentive programs, I thought I’d skip 2014 and make some predictions about time frames that compensation people really have to worry about. Many current compensation programs will still be in effect.

Inquiring Minds Want to Know

Compensation Cafe

In the past once a deal was officially signed the acquired company was “dumped” on HR/Compensation to handle the integration. Employees had questions and HR/Compensation had no answers. And since everything we do in compensation is communication , Compensation professionals need to shine. Regardless of how compensation will be structured between the two companies after the acquisition is final, employees on both sides will be concerned about what is happening.

Two Types of Compensation People

Compensation Cafe

Compensation people seem to come in two types: employee judges and employee advocates. Another group (which I will carelessly label "advocates") prefers to ignore individual performance distinctions and instead would confer identical generous compensation rights to all employees. Advocates" consider all compensation an employee entitlement tied to membership in the group. Do compensation professionals truly display a basic preference between judging and advocating?

Part III - Where Should We Take Employee Rewards in the Future?

Compensation Cafe

2014, The changing landscape of employee rewards: Observations and prescriptions. Part 1 of this series argued that employee compensation has become a stagnant field. Almost every employee should be part of an incentive plan that has a payout opportunity of 10% of base pay.

“I know the perfect person…”

HR Times

Posted by Robin Erickson on October 21, 2014. Certainly, financial and other incentives are important motivators. The average range for bonuses is $500 to $4,000, depending on the job. 3 Your company should define its own bonus structure based on its budget, culture, available resources, and hiring needs. Whether incentives are cash or some other type of reward, establish award payment timing before beginning the program so employees know what to expect.

Part I - Malaise in the Employee Rewards: What’s Going On?

Compensation Cafe

Sales compensation has always been a different beast: it has different buyers and economic cycles than employee rewards, and sales incentives constantly evolve to meet new business needs.

Heed These 5 Performance Management Realities—Before It’s Too Late!

Reviewsnap

Many still hold annual reviews but these meetings are used primarily to address development and career pathing issues—and to discuss compensation (annual pay raises, bonuses, etc.). If your organization uses a top-down approach—placing accountability only on your managers—employees have precious little incentive to take ownership of their goals or become involved in their own development.

A Quick-Start Guide to Creating a Salary Structure for Your Company

Insperity

Define compensable leverage for your company. Compensable leverage refers to how much more or less salary rate increases in your company, overall, compared to the market rate increase for higher-paid positions in the organizational hierarchy. It’s important to determine the desired compensable leverage for your company. Another option is to get creative and find other ways to compensate the person. This might include establishing incentive or bonus plans (i.e.,

4 more reader updates

Ask a Manager

One point I didn’t make in my original post was that HR was more agreeable to the idea of providing financial incentives for exceeding goals than they were to consequences for failing to meet goals (some commenters asked about that). Once I got them to consider the two issues separately, we were able to move ahead quickly with teapot makers who exceed their goals being eligible for a modest bonus at the end of the year.

Moving In Reverse Towards the Future

Compensation Cafe

Even as tradecraft veterans increasingly endorse open transparency in reward systems and recommend robust communications about compensation as the desired best practice, the consensus actua l practice is moving away from that ideal. Confusion about compensation is spreading.

A Word to the Wise, Once Again!

Compensation Cafe

That was the first sentence in the April 15, 2014 Compensation Cafe article. As I said back in 2014, when your company's internal practices become a topic for public discussion, you need to be alert. Margaret is a Board member of the Bay Area Compensation Association (BACA).

Is Your Annual Incentive Pay Plan the Right Fit For Your Business?

Insperity

You need to develop an effective incentive plan. Overall, the most common strategy is an annual incentive pay plan. In 2014, 90 percent of publicly traded firms offered such plans, according to a WorldatWork and Deloitte Consulting LLP report. But is an annual incentive pay plan really the best way to motivate employees? How an annual incentive pay plan works. An annual incentive pay plan should: Reward high performance. Benefits and Compensation

Is Your Annual Incentive Pay Plan the Right Fit for Your Business?

Insperity

You need to develop an effective incentive plan. Overall, the most common strategy is an annual incentive pay plan. In 2014, 90 percent of publicly traded firms offered such plans, according to a WorldatWork and Deloitte Consulting LLP report.

How Well Do Numbers Speak for Themselves?

Compensation Cafe

Fiscal year 2106 total compensation was $860,198. Base pay $750,000; bonus $100,000; non taxable pay $10,198. Total compensation ranked fifth in the Big Ten , and three of those above her are being paid more than a $1,000,000.

Clearing Away the Cobwebs

Compensation Cafe

When things finally started to improve around 2014, we were really tired, so repetitive work was right up our alley. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans.

Where Have All the Raises Gone?

Compensation Cafe

Last month The New York Times ran an article bemoaning the loss of pay raises in favor of one-time bonuses and non-monetary rewards. Cited in the article, analyst firm Aon Hewitt calls this a “drastic shift” based on the firm’s annual survey on salaried employee compensation.

Are Contingencies in Commission Agreements Worth the Paper They’re Written On?

HR Daily Advisor

Employers that compensate employees by commission should pay attention to these two cases before withholding commission payments from departing workers. The plan consists of three types of incentive compensation: an individual component, a forfeiture component, and a discretionary component.

Fishing for Facts about Pay Inequity

Compensation Cafe

Friday brought another bombshell about pay to gladden the hearts of compensation people looking for more work. It expands the prior two August 2014 executive orders for pay equity inspections at federal contractors. beyond being an additional task for compensation people.

New Year, Same Story: 2016 Forecast Is For Another Year of 3% Raises

TLNT: The Business of HR

” Yes, you read that right — next year’s salary hike is projected to be the same 3 percent increase employees received this year and in 2014. More annual, short-term pay incentives.

BLR’s 2017–2018 Pay Budget and Variable Pay Survey

HR Daily Advisor

in 2014, and 38.1% Myriad other challenges were also noted, including: Administering compensation: 14.5%. 2017 Bonuses. last year) paid bonuses to their exempt employees in 2017, with 18.4% (up from 15.7% 2018 Bonuses. last year) provide long-term incentives.

Cafe Classic: There May Still Be Enough Time!

Compensation Cafe

Editor's Note: It may not be too late to positively impact those year-end compensation conversations happening at your organization. Explaining consistently to all employees, how the budgets have been allocated for merit increases and bonuses.

It’s Back – New Federal Overtime Rule Proposed

HRWatchdog

According to the DOL, this increase could result in more than a million additional American workers eligible for overtime compensation. Therefore, employees who do not earn the minimum salary threshold will no longer qualify for these exemptions and must be paid overtime compensation.

Performance Management Disrupted: Empowering Individuals and Teams to Do Their Best

Bersin with Deloitte

When he took on his role in 2014, attrition was high and compensation was below market, yet performance ratings were higher than he expected. The system tied bonuses to each team’s scorecard rating, so it incented them to work collaboratively.

10 Rules for Employee Retention Your Competition Will Hate

Insperity

Some companies are offering unhappy employees a “pay-to-quit” bonus. This simple “perk” can be a big incentive for your employees to stay. Compensate. Consider performance-based incentives that give your employees a chance to earn more money.