Learning Corner with Jeffrey Pfeffer: Less Is Better Than More When it Comes to Incentives

Cornerstone On Demand

Zimmer commented on a bonus program I had written about where each store employee (except the store manager) would receive $20 if the store met its “good" sales target for the month, and $40 if it met its “excellent" sales goal. Incentives are a poor substitute.

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.

2019 Holiday and Incentive Calendar


For each date, we’ve also included a list of feature ideas and suggestions – so whether you’re looking to expand your rewards catalog, swap out your Behavior Bonuses, or create new onboarding redemptions, we’ve got you covered! January Holidays and Incentives.

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. Like any well-designed incentive compensation plan, Wells Fargo’s started with a strong company culture and a simple goal that required special effort.

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.

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.

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!

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.

How To REALLY Design an Incentive To Drive Behavior

What is Paul Thinking

Incentive for Reducing Travel Costs. “If you book according to the air travel policy, you get 10 points,” a travel consulting expert told the paper. “If you book a hotel within the policy, you get 10 points. If you do all three, you get a bonus of 20 points.”

Incentive Pay is Like a Par 4 Golf Hole

Compensation Cafe

He has co-authored ” Everything You Do In Compensation is Communication ”, “The Decision Makers Guide to Equity Compensation” , “Equity Alternatives ” and other books. It was a glorious day, the conditions were perfect, and the smell of just cut grass filled the air.

Woulda, Coulda, Shoulda: An Incentive Compensation Story

Compensation Cafe

Not the least of them was the creation, design and management of the company’s long-term incentive program. She also combined all of these skills to build and manage her incentive compensation plans. This year the two main incentive plans did not perform as expected.

5 Reasons to Design Your Incentives Like IKEA Furniture

Compensation Cafe

Use their methods for building your incentive plans. Your incentive plan should be designed to ensure even the unexpected isn’t a surprise. When you build an incentive plan, take the time to customize the tools for planning, modeling and tracking progress. Make sure your incentive plan delivers on its promise. Your incentive plans can benefit from being far more translatable.

Long-Term Incentives for a Short Term Generation

Compensation Cafe

Second, this means that the majority of these workers do not intend to benefit from the entirety of their Long-Term Incentives (LTI). Designing LTI to attract, motivate and retain the “next” generation: Opportunity 1: Consider “Mid-Term Incentives” that link to Long-Term Incentives.

Cafe Classic: Is Your Incentive Plan a Strategy Killer?

Compensation Cafe

Editor's Note: Do your incentive plans make the right decisions seem wrong and discourage the choices most critical to your organization's future? Are your incentive plans designed to support or defeat your organization's business strategy?

Get Your Office Involved: Holiday Giving + New Year Incentives


Here at Kazoo, we’re able to earn points through Behavior Bonuses when we donate any item during the month of December. Kazoo has some great choices directly within our store, or you can simply incentivize your employees to donate points with a Give Back Bonus.

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.

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.”

Cafe Classic: Are Competitive Incentives a Turn Off for Women, a Turn On for Men?

Compensation Cafe

Editor's Note: As a woman, a mother of two (young adults: one male, one female) and a science book nerd, I found Louann Brizendine's book The Female Brain fascinating for its deep dive into the neurological and even endocrinological differences in our brains.

Why signing bonuses won’t save transportation’s talent shortage

PI Worldwide

The current school of thought is to offer signing bonuses. With several of the biggest names in the game offering sign-on bonuses—and money being a strong motivator to start driving—this seems like a good solution. Signing bonuses aren’t a sustainable solution to the transportation talent shortage. Increasing bonuses for drivers will eventually cause freight prices to rise, which will cost these businesses their customers. Read e-book.

Best of the Force: What do ROWE and Incentives Have in Common?

Compensation Force

What do ROWE and incentives have in common? Reading Tim's post, and the incredible discussion in his comment stream, I was struck by what I believe ROWE has in common with incentives. With incentives, we tie cash awards to achieving results. Bonus/Incentives Pay for Performance

Best of the Force: What do ROWE and Incentives Have in Common?

Compensation Force

What do ROWE and incentives have in common? Reading Tim's post, and the incredible discussion in his comment stream, I was struck by what I believe ROWE has in common with incentives. With incentives, we tie cash awards to achieving results. Bonus/Incentives Pay for Performance

Go Team – And Me Too! Incentives for All


Over the past few years, there has been a lot of negative press about incentives. Specifically that incentives don’t work, they are a hangover from “motivation 1.0” Incentives do a great job of focusing attention, focusing behavior and signaling what we think is valuable.

Double the Incentive – Reduce the Impact


I am a fan of incentives. I’ve on record defending them when the book Drive came out 8 years ago and basically tried to shunt them into the dust bin of management and motivation ideas. Incentives are great when seeking to break behavioral inertia. Incentives are very powerful.

6 ways to make sure your employee bonus program doesn’t fail


Offering a generous employee bonus program can be just the right incentive to keep highly motivated employees from looking for work elsewhere. When it comes to bonus programs, not all are created equal. Say you implement a bonus program and then realize that it is flawed – either it is too hard to attain and is causing morale to suffer, or it is too easy and the payout could cost you more than you bargained for – both scenarios can be detrimental.

59 Awesome Employee Engagement Ideas & Activities for 2018 (Plus 10 New Bonus Ideas)


59 Awesome Employee Engagement Ideas & Activities for 2018 (Plus 10 New Bonus Ideas). Free bonus: Download this entire list as a PDF. Includes 5 bonus ideas not found in this post. Throw away that meeting rule book and schedule meetings without agendas or target outcomes.

How Employee Incentive Programs Can Benefit from Behavioral Economics

HR Daily Advisor

He was tasked with coming up with a new incentive plan for employees—particularly its sales reps—that aligned with the company’s new corporate strategy, Brewer explained to an audience at WorldatWork’s Total Rewards 2017 conference in Washington D.C.

Here's Why Cash Bonuses Don't Work for Referrals


The value of the employee referrals hiring channel is old hat in the recruiting world, with some companies going as far as offering exorbitant bonuses in exchange for access to their employees' networks. What seems to be the issue with cash bonuses for referrals?

Employee Motivation: Why Bonuses May Not Be the Answer


Traditionally money was seen as the main incentive used to motivate employees. Higher productivity results in higher salaries and bonuses. In his 1960 book “The Human Side of Enterprise” he outlined two management styles that require different types of motivators. This has created a paradigm shift away from annual performance reviews based on X Theory incentives and towards a mission driven environment that fosters creativity, ownership and self-direction.

Communication is Gasoline

Compensation Cafe

He is a leading expert on incentive plan and equity compensation issues and has written several industry resources including the only resource dedicated to Performance-Based Equity Compensation. Imagine buying a brand new car. You have spent months saving up and doing research.

Compensation Dentistry (part 1)

Compensation Cafe

Annual and long-term incentive plans are often not as well cared for. Just like the fact that most kids don’t grow up wishing to be a dentist, few compensation professionals aspire to be mavens of incentive plans. Yes, incentive plans can be harder than base pay.

coworker bogarts all the food at work events, asking for a bonus when resigning, and more

Ask a Manager

Can I ask for a bonus when I’m resigning after being underpaid for two years? Is there a case I can make for some kind of parting bonus? Bonuses are generally used as a way to retain good employees. Because you’re leaving, they have no incentive to give you a bonus on your way out. I make a lot of purchases for our office, as well as help book travel for people. It’s five answers to five questions. Here we go….

Compensation Dentistry – The Tooth Fairy Years (part 2)

Compensation Cafe

Learning how to create a basic compensation philosophy, applying a pay strategy and pricing approach consistently and thoughtfully considering the long-term ramifications of incentives given today are all pieces of building a good compensation habit. Baby Teeth, Why care?

Is Your Pay Plan a Trust Buster?

Compensation Force

Enter Charles Green, author of the classic business book The Trusted Advisor and CEO of Trusted Advisor Associates. Bonus/Incentives Communication Compensation Philosophy

This Valentine’s Give Them Pizza and Say Thanks

Compensation Cafe

A new study, from Dan Ariely, of “ Predictably Irrational ” fame suggests that very short-term cash incentives may not be doing what we think they are doing. Ariely’s new book is “ Payoff: The Hidden Logic That Shapes Our Motivations.” It’s Valentine’s Day.

Stop Building Sinking Ships

Compensation Cafe

wrote an article asking, “ Should You Scrap Your Long-Term Incentive Plans? ” Ships are part of the foundation that is long-term incentives. And yet, our Long-Term Incentive Plans look very much alike and very much unchanged over the past two decades.

Compensation Dentistry – The Orthodontist (part 3)

Compensation Cafe

He has three metaphors for every occasion and is a leading expert on incentive plan and equity compensation issues. He has co-authored ” Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation” , “Equity Alternatives ” and other books.

Don't Do That! Bad Habits and Compensation

Compensation Cafe

New incentive coming up next year? I've written before about the value of the book, "The Power of Habit" by Charles Duhigg. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans.