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

Compensation Today

Is there a difference between a bonus and an incentive? Under the umbrella you can find any number of bonuses, incentives, commissions, and other cash comp that is contingent on something happening. Bonus” falls under the umbrella. Choosing Incentives or Bonuses.

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. By Derek Irvine.

Do You Know What A Bonus Is?

TLNT: The Business of HR

Bonuses Compensation & Benefits Incentives Pay for Performance Pay Increases & Raises Wages, Pay, & Salary FeaturedI’ve had an important lesson reinforced for me.

Best of the Force: The Perils of Stretch Goals and High Incentive Hurdles

Compensation Force

Dan Markovitz's HBR blog post, The Folly of Stretch Goals , brings to mind a development in my own management incentive plan design work over recent years, as my clients and I address heightened concerns about risk and unintended consequences. What does this mean for incentive design?

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Compensation Cafe: Employee Engagement and Incentives Compensation

RecognizeThis!

Then today, I blogged “The Tricky Business of Incentive Compensation,” examining research on when and how incentives can motivate, given the typically low performance of such schemes. by Derek Irvine. Recognize This!

Beware of Bonus Pitfalls: Overtime and Nonexempt Employees

HR Daily Advisor

I received a call recently from an employer that wanted to know if it could exclude a newly created job category from an annual bonus program. The employer told me it hadn’t thought about doing so because this bonus was paid only once, on an annual basis.

Cafe Classic: Can Incentives Rise Above the Bad Rap?

Compensation Cafe

Editor's Note: I notice that people tend to gather at the two extremes of thought regarding financial incentives. Group 1 regards incentive compensation as the antidote to all ills, the solution to every problem that exists in human motivation and performance.

Turtles Confirm that Incentive Pay Works!

Compensation Cafe

The discussion regarding the efficacy of incentive compensation is ongoing. We tend to think of incentives as based on job descriptions and tasks people normally perform. Instead of the incentive being pushed on recipients it was only available via request.

The Not-so-secret Formula to Making Incentives Work

RecognizeThis!

To be effective, recent research suggests incentives are best paired with recognition. Whether or not incentive programs are effective has been a long standing question, spanning multiple academic disciplines. Bonus & Incentives Social Recognition employee motivation incentives

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!

Friday Five: Year-End Bonuses

Workology

Between scrambling to finish our holiday shopping, avoiding embarrassing ourselves at the office party, and planning our spring vacation – soon, friends, it’s coming soon – we’re busy seething over someone else’s year-end bonus. It’s that time again.

Your Brain on Incentives

Compensation Cafe

b) This is your brain on incentives. What can we possibly learn about incentive compensation from functional magnetic resonance imaging (fMRI)? Incentives/Bonuses Pay for Performance incentive pay pay for performance performance pay variable pay

SHRM 2017: Mykkah Herner and Pay Incentives

HR Daily Advisor

Today I attended a session by Mykkah Herner, the Compensation Evangelist at Payscale, entitled Effective Incentive Plan Design. The focus of his talk was on variable pay plans and how they fit into an overall pay incentives strategy. Bonuses, he says, “may or may not have a plan.

How Do Team Bonuses Impact the Bottom Line in a Retail Setting?

Compensation Cafe

Some things are easy to measure: revenue per quarter, profit margin, average incentive pay received by employees per month, and so forth. Other things, like measuring the increase in revenue or the change in profit per dollar spent on incentive pay, are a bit more difficult.

Cafe Classic: The Key to the Successful Annual Bonus is Truth, Clarity & Alignment

Compensation Cafe

Editor's Note: With today's Classic, a call to walk the talk - or at least honestly talk the walk - when it comes to annual bonus awards. This gets them out of the admittedly difficult (particularly these days) task of pre-defining goals and bonus parameters.

Incentive Pay is Like a Par 4 Golf Hole

Compensation Cafe

Executive Compensation Incentives/Bonuses Pay for Performance Sales Compensation Stock/Equity Compensation bonus equity compensation golf incentives LTI par 4 performance units sales compensation sales pay short term incentive

How To REALLY Design an Incentive To Drive Behavior

What is Paul Thinking

Incentive for Reducing Travel Costs. If you do all three, you get a bonus of 20 points.” This company was using the article as a way to communicate to potential clients that using points-based incentives are the way to reduce travel costs.

[Infographic] Top 10 Best Workplace Incentives

Get Hppy

Vacation bonuses. But are incentives like these actually worth it? Morale-boosting workplace incentives will reduce turnover and its associated costs. Many companies hesitate to start incentives programs because of the costs it will incur. Gourmet meals. Game rooms.

Tips for Safety Incentive Programs

HR Daily Advisor

A safety incentive program is one option for employers to implement to help to improve safety in the workplace. What Are Safety Incentive Programs? First off, what are we talking about when we say “safety incentive program”?

Employee Bonuses 101

Namely

There is a lot to be aware of when it comes to bonuses. Small HR teams have a lot on their plate already, so bonus season can seem even more time consuming and chaotic. To help, we’ve compiled four essential elements to consider when setting up a bonus system. Timing Bonus cadence can take a variety of forms. There have been cases made for annual, semi-annual , holiday, and even spot bonuses. What do you want bonuses to achieve?

An Unpopular Sales Incentive Plan Design Fiasco

Compensation Cafe

The new sales incentive plan was not well received. Their disapproval disappointed the corporate headquarters compensation experts tasked with the duty to faithfully but delicately comply with the incentive program guidelines supplied by the division's senior management.

Everyone Gets a $100,000 bonus!

Compensation Cafe

When 1,380 employees got a $100,000 bonus each, the story should have made headlines everywhere. The brilliant bonus decision was a wonderful example of a corporation that cares deeply about its employees.

Incentives Without Teeth

Compensation Cafe

The title of this post probably had you thinking about incentive plans that required real goals to be met before payment was earned. Many companies have incentive plans without links between individuals, teams, departments and the company as a whole.

Autonomy, Incentives and Motivation

Compensation Cafe

With this kind of autonomy, monetary incentives reinforce intrinsic motivation. Even competitive incentives awarded on a discretionary basis have this reinforcing effect. Incentives are not viewed as an instrument of control.

Hot topic: Paying bonuses

Strategic HCM

There's an interesting piece in HR Magazine today questioning whether bonuses are an effective reward mechanism. The article includes comments from Craig Newman, chief executive of Woodford Investment Management which gave up paying bonuses last year.

Cafe Classic: Competition Is Good, Except When It’s Not - The Difference between Incentives and Recognition

Compensation Cafe

Editor's Note: Incentives and Recognition are key elements of a total reward portfolio, but they work in different ways and are better suited to different purposes. I’m often asked, “What’s the difference between incentives and recognition? Ensure Incentives Remain on Track.

17 Words About Incentive Pay

Compensation Cafe

The 17 words listed align incredibly well with common incentive plan designs. A quick review of incentive pay basics. This is another situation where many people would be very disappointed if they didn’t “get their bonus.”

Should You Scrap Your Long-Term Incentive Plans?

Compensation Cafe

If you're like most companies, you provide stock options, restricted stock grants, and other long-term-incentives to your senior executives. But do you know why you provide those incentive packages? But are those incentive packages working ?

What’s a Signing Bonus? Should You Offer One?

FingerCheck

If you’re looking to attract new talent, a signing bonus is one way to sweeten the compensation package you offer to highly qualified candidates. Unlike traditional benefits like healthcare insurance, paid sick days, and vacation/paid time off, a signing bonus is a one-time benefit paid at the start of employment with the company. . The typical signing bonus is given at a rate of between 5-10% of the base salary and is taxed at 25%.

Excessively Successful Incentives

Compensation Cafe

The only thing worse than an incentive that doesn’t work is one that works all too well. Wells Fargo is just the latest company to be ethically embarrassed and financially distressed by a fiasco involving excessively motivational incentives.

Cafe Classic: Reviewing Your Incentive Plan: A Three-Tiered Conversation

Compensation Cafe

Editor's Note: Reviewing existing incentive plans is part of the job for many of us. Many of you are - or will soon be - in the throes of reviewing your employee incentive plan, trying to determine how (and in some cases. Incentives/Bonuses

The 5 Elements of a Good Incentive Plan

Compensation Today

Offering incentives is a practice that has seen increased popularity over the past decade. In PayScale’s 2017 Compensation Best Practices Report , over 60 percent of organizations surveyed said they give individual incentives, and nearly a quarter of them reported giving team incentives.

Bonuses and the New FLSA Overtime Regulations

HR Daily Advisor

Under the final regulations, employers will now be able to count nondiscretionary bonuses, incentive payments, and commissions toward as much as 10% of the salary to determine whether they have reached the salary threshold for exemption from overtime. By Susan Prince , JD, M.S.L.,

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. ” 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. Bonus & Incentives Social Recognition bonuses compensation cafe promotions raises recognition and reward Recognize This! -