Astronology®: 2020 Compensation Budgeting Forecast Part 2: Incentives, Bonuses, and Variable Compensation

Astron Solutions

The design and implementation of variable compensation programs continue to grow throughout 2019 and it appears that this trend will continue into 2020. WorldatWork found that 84 percent of surveyed organizations used variable pay as part of their compensation program in 2019.

Compensation Cafe: The Contradiction of Annual Incentives

RecognizeThis!

Incentives are only effective when they match the timeframes of employees’ motivation to perform. In light of a recent Willis Towers Watson report on the ineffectiveness of annual incentives, I wanted to take a closer look at how and why they motivate employee behavior.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

The Intent to Incent is Our Sun

Compensation Cafe

Incentive plans are one of the most complex aspects of pay and rewards. All of these simply orbit around the most important element of any effective incentive plan. The purpose of an incentive plan can only be absolutely clear if we avoid assumptions.

Variable Pay: Is There a Difference Between a Bonus and an Incentive?

Compensation Today

PayScale’s 2017 Compensation Best Practices Report (CBPR) revealed that nearly three-quarters of organizations give some type of variable pay. At a time when increase budgets are tight, organizations are starting to shift their rewards towards variable pay over fixed costs (salary).

Compensation Air Traffic Control

Compensation Cafe

The swirl of tasks and requests can make a compensation professional feel more like they work in air traffic control. You are probably sitting at your desk (or sofa) trying to determine which thing s needs to be brought home first. Or, follow him on Twitter at @ DanFutureSense.

Astron’s Yearly Compensation Review Part II: Incentives, Bonuses, and Variable Compensation – Oh Boy!

Astron Solutions

As Astron’s clients begin their 2019 compensation program budgeting, we are often asked whether or not the practice of providing variable compensation will grow, shrink, or remain about the same as in 2018. employers gave out performance-based bonuses. Photo by Lukas from Pexels.

Incentives and The Rule of Three

Compensation Cafe

Designing an effective incentive plan is always a challenge. Over many years I have come to rely on what I call the Incentive Plan Rule of Three. No more than three metrics (KPI), no more than three defined goal levels, no more than three incentive plans for any one individual.

Taming the Incentive Beast

Compensation Force

Left on their own, with no boundaries or constraints, incentive plans will often multiply like rabbits. I recently spoke with a compensation professional who claimed that her organization has over 300 incentive plans in place. Good luck in taming YOUR incentive beast!

6 Ways Incentive Plans are Like COVID-19 Planning

Compensation Cafe

Comparing incentive plans to a pandemic response seems like a stretch, but great incentive plans are all about stretching. Stretching your compensation budget. Every good incentive plan project starts with a simple question. Or, follow him on Twitter at @ DanFutureSense.

The Dark Side of Incentives

Compensation Cafe

When describing their annual incentive plan (STI) most organizations will highlight to eligible employees the upside reward opportunities provided by the plan. But there’s usually less talk about what happens when times are tough, as incentive communication tends to focus on the positive.

Cafe Classic: Are Your Compensation Plans Mission Critical?

Compensation Cafe

Editor's Note: As we move forward through and (hopefully) beyond the pandemic into a recovering economy, we'd better make sure our compensation plans are on point and mission critical. at Northwestern University’s Kellogg School and enjoys reading in her spare time.

Woulda, Coulda, Shoulda: An Incentive Compensation Story

Compensation Cafe

Inside that company, worked a compensation professional (“Yolanda”) who juggled many projects. Not the least of them was the creation, design and management of the company’s long-term incentive program. Yolanda was very good at her job.

Key Factors to Manage Employee Merit, Bonus & Incentive Plans Effectively

HRsoft

There are many ways to incentive performance in an organization. Typically grouped together under the umbrella term “pay for performance plans,” employers may choose among merit programs, bonus options, and individual or team incentive plans. In order to manage employee merit, bonus, and incentive plans effectively, however, it’s important to first understand the key differences among these types of pay.

Is Your Annual Bonus Guaranteed?

Compensation Cafe

When worried organizations consider methods to get their arms around (control) high payroll expenses, they typically turn a blind eye to the variable pay component, to annual bonuses or incentives. Just be careful not to over-compensate the incentive payments to make up any loss.

Planning for an Equity Compensation Pandemic

Compensation Cafe

At first, the unknowns throw us off-kilter. While most of the recent volatility is due to the uncertainty of how the virus will impact the world, at least a little of it is due to years of a bull market that has given investors the ability to cash out with impressive gains.

What COVID means to compensation

HRExecutive

This is the second in a series on compensation during the pandemic. The coronavirus pandemic has upended scores of traditional HR structures: hiring, recruiting, onboarding and compensation. This is the second in a series on compensation during the pandemic.

Compensation Communications that Hit the Mark This Time

Compensation Cafe

What have data and analytics got to do with compensation communications? Imagine you had to tell the Compensation Committee that the company couldn't afford one of their proposals. Take a look at the number of new hires that you have.

Compensation Dentistry (part 1)

Compensation Cafe

Compensation programs can often be the same. Annual and long-term incentive plans are often not as well cared for. It is the rare compensation professional who gets excited about these impending issues. Yes, incentive plans can be harder than base pay.

2018 Compensation Budgeting Forecast Part 2: Trends in Incentive Compensation

Astron Solutions

Astron Solutions has been tracking the increase in organizations instituting short- and long-term incentive plans among our client organizations over the past year. Current Use of Bonus / Incentives. of organizations paid bonuses to their exempt employees in 2017, down from 54.3%

Compensation Communications: Should I Say How I Feel?

Compensation Cafe

Many of our colleagues would say that compensation has nothing to do with feelings. On the other hand, feelings have a lot to do with compensation COMMUNICATIONS. Addressing feelings through compensation communications is tricky business. Let's look at an example.

5 Lessons from Glittery Smelly Incentive Plan Mistakes

Compensation Cafe

It turns out that incentive compensation doesn’t just work, it can work too well at motivating the wrong behaviors. Make sure you design your incentive plan to reduce the possibility and rewards for cheating. Incentive plans are difficult to get perfect.

Incentive Compensation Management Software

HRsoft

Compensation planning on its own is a complex topic. A robust compensation framework must be internally equitable, externally competitive and compliant with pay and labor laws. Incentive compensation planning takes the concept a step further.

The Time is Now. Compensation Pros Must Rise to the Challenge.

Compensation Cafe

For at least a few decades, this has been the way of things in the world of compensation. Now is just such a time for compensation professionals. The current crisis has exposed the dusty corners of compensation practices. Take a good hard look at your pay programs. (Go

Using Incentive Compensation Software to Drive Performance

HRsoft

Incentive compensation is the process of paying employees based on the performance of an entity. While it is among the most effective means of driving desired outcomes in an organization, it can also lead to increasing complexity for compensation professionals.

8 Ways the Minneapolis Skyway is Like Incentive Compensation

Compensation Cafe

After using the Skyway to get from my hotel to the conference site, I realized that the system was exactly like incentive compensation. Simply replace the word “Skyway” with “Incentive Plan” and you’ll easily see the lesson learned.

6 Types of Bonuses and Perks for Employees

HR Digest

. Bonuses are a way to show appreciation of an employee’s effort or performing a task beyond and above the call of duty. He says structured bonus programs are still very popular with organisations and on average companies are planning to budget 13 per cent of their payroll for bonus expenses.

When Incentive Pay Goes Rogue!

Compensation Cafe

A friend of mine likes to say: “It’s not that incentive pay doesn’t work well, it’s that it works TOO well. When this happens, compensation professionals usually cry foul. Get every customer to have at least 8 financial products through Wells Fargo.

The Real Cost of Mismanaged Incentives: Wells Fargo

Compensation Cafe

Today is a steaming jolt of quadruple espresso in response to the Wells Fargo incentive pay mess. If you have been under a log for a couple of weeks, please start by reading a couple of earlier Compensation Café Articles (my own When Incentive Pay Goes Rogue!

Should You Offer a Signing Bonus?

HR Daily Advisor

Whether you call it a hiring bonus, a signing bonus, or a sign-on bonus, the idea is the same: It’s a bonus offered to a job applicant to entice him or her to accept the position. Should You Offer a Signing Bonus? Should You Offer a Signing Bonus?

Incentive Plans Work Too Well (here’s the trick)

Compensation Cafe

It's not that incentive plans don't work well, it's that they can work too well in motivating unintended consequences. Are any incentive compensation experts shocked by this? The failed Wells Fargo incentive plan and Tax Reform are similar.

Cafe Classic: Re-Thinking Compensation At Professional Services Firms

Compensation Cafe

Editor's Note: As pay transparency and equity concerns draw ever more attention, it's interesting to revisit Stephanie Thomas's Classic post about black-box models of compensation and their fit, to the unique world of professional service firm partnerships or.

Compensation Wormhole

Compensation Cafe

Let’s look at it from the perspective of an employee who is doing a good, but not outstanding job. This amount will also impact your future bonuses and other pay. Many of us can do a better job communicating the benefits of culture and incentive pay programs. Time Travel.

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. Or, follow him on Twitter at @ DanFutureSense.

The Tricky Business of Incentive Compensation

Compensation Cafe

One solution has been to implement incentive compensation or “pay for performance” plans. Given concerns about the low performance of incentive compensation schemes, though, when and how such incentives truly motivate behavior has remained an open question.

Another New Year- Time to Think About Bonuses

Affinity HR Group

With 2019 over and at the dawn of a new decade, it’s an ideal time to think about bonuses for 2020. Organizations of all sizes and across all industries use bonus programs as an important component of total compensation. There are many different types of bonus programs.

Cafe Classic: Is it Safe to Incent Safety?

Compensation Cafe

Should rewards be used to incent greater attention to safety? Is it a good idea to include safety metrics in a broad-based employee incentive plan? I recently came across an interesting article in Incentive Magazine about safety incentives.

Equity Compensation is Like The Iditarod

Compensation Cafe

Speaking of frozen things, let’s talk about equity compensation and The Iditarod Trail Sled Dog Race. Like a well-designed equity compensation plan, The Iditarod is long and not for the faint of heart. All of these things can also be said of a successful equity compensation program.

Why Today’s Incentive Thinking Is Different

Achievers

Too often in human history, this meant that people with less power were simply compelled to work, and incentives — if they existed — consisted merely of being allowed to survive. The Central Challenge of Giving Incentives. Stats That Prove the Value of Incentives.

Compensation Cafe: Chasing Best Practices

RecognizeThis!

A recent report from PayScale, which I covered in this post on Compensation Cafe , helps to provide some useful data around compensation practices, particularly among top-performing and average companies. Bonus & Incentives Best Practices compensation performance

Can Your Employees Make a Difference? What Does Your Incentive Plan Say?

Compensation Force

I am floored by how many times, during the design of an employee incentive plan, management will trot out the assumption/foregone conclusion that individual employees are unable to make a meaningful contribution to overall organization - or business unit - performance measures.