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.

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.

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.

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. This year the two main incentive plans did not perform as expected.

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.

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.

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. It usually does exactly what it is designed to do, even if that wasn’t your intent.”.

Critical Incentive Pay Lesson from a Jeopardy Champion

Compensation Cafe

This is where we can leverage Jeopardy to improve incentive plans. Most incentive plans are very heavily weighted toward “winning.” When you have already earmarked your potential incentive compensation, this risk of losing some of it can stop you from earning all of it. Incentive plans can be designed to offer measurable value if a real effort is made even when results may not be achieved. This provides an incentive to try.

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.

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!

Compensation Wormhole

Compensation Cafe

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. Showing the growing value of long-term incentives can put Velcro into the seat of your employees’ pants. Time Travel.

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?

Don't Do That! Bad Habits and Compensation

Compensation Cafe

Everything we do in compensation is communications. Change management should be the foundation of 90% of compensation communications. New incentive coming up next year? No wonder there can be so much frustration about the effectiveness of compensation communications.

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.

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.

Incentive Pay is Like a Par 4 Golf Hole

Compensation Cafe

He is passionately committed to aligning pay with company strategy and culture and considered a leading expert on equity compensation issues. Dan has written several industry resources including a recent Performance-Based Equity Compensation issue brief.

Cafe Classic: Putting on Your Explorer Cap via Appreciative Inquiry for the Compensation Pro

Compensation Cafe

Editor's Note: More than a few of us number nerds populating the field of compensation have a Classic deficit in the soft skills required to constructively explore and understand the territory and circumstances surrounding employee and organizational performance. .

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: Driving Your Compensation Programs in Reverse

Compensation Cafe

Dan Walter, master of the compensation metaphor, shines a light on the Classic problem we all face at one time or another - particularly those of us who work in or serve smaller, entrepreneurial organizations. We think it’s OK and want to fix our bonus program by the end of this year.

Cafe Classic: What Do CFOs Wish Compensation Professionals Knew?

Compensation Cafe

Editor's Note: We recently featured Dan Walter's Classic post on what CEOs want from compensation professionals. Recently I provided some insight into what your CEO is thinking when you talk to them about compensation. Heck, they even enjoy being compensated (like most of us!)

Cafe Classic: Can Your Compensation Plan Tell Time?

Compensation Cafe

Editor's Note: In this wonderful Classic, Dan Walter reveals how great compensation plans share characteristics with the analog clock, one of the oldest and most amazing of human inventions. How much are your compensation programs like an analog clock?

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?

Be a Compensation Paleontologist

Compensation Cafe

Is your compensation structure a Payalotasaur? No matter your approach to pay, you are probably acting as a Compensation Paleontologist to get things done. The best compensation pros do much the same thing. Only compensation professionals can prevent this.

Communication is Gasoline

Compensation Cafe

Your new compensation program is the car. The rest is the story of nearly every new program in the world of compensation. In truth, it is an essential component that makes compensation go. Compensation plans are much the same. Imagine buying a brand new car.

Progressive Performance Management: Why Your Employee Compensation Strategy Is Holding You Back

15Five

One of the main issues that HR leaders face when considering a progressive performance management program is how to revamp their employee compensation strategy. Courtney: In your book, Next Generation Performance Management , you differentiate between Performance Management 1.0 (PM

Thank You for 10, 360 and 180,000 Reasons

Compensation Cafe

The recognition of each of you reading this post, and anyone who has ever read a post on the Compensation Café. He has three metaphors for every occasion and is a leading expert on incentive plan and equity compensation issues. This post is about recognition.

Cafe Classic: What Do CEOs Really Want from Compensation Professionals?

Compensation Cafe

As it turns out, CEOs want the same thing from their compensation leaders that they want from finance, technology, marketing, engineering and other leaders. I don’t want to learn your “language” of HR and compensation. Editor's Note: What does the CEO want from you?

Compensation Work and Skin in the Game

Compensation Cafe

I think it could raise some interesting questions about how compensation jobs and functions are defined and organized. . How quickly could you (compensation professional) get your head around the differences in skills, practices and behaviors needed?

11 Reasons Your Equity Compensation Survey Data is Wrong

Compensation Cafe

And, with equity compensation the final answer is even squishier than other types of compensation. Equity compensation really is that messy. It is (at least) variable, variable, variable, variable, variable, variable, variable, variable, variable, variable, variable compensation.

Cafe Classic: The Compensation Cookbook

Compensation Cafe

Editor's Note: Here, for a little midweek fun, we bring you Jim Brennan and his long-awaited, utterly authoritative and instantly gratifying dictionary of compensation decisions. The Compensation Cookbook will solve all your problems.

How to Make Headway on Pay Transparency

Compensation Cafe

What I'm talking about is giving employees enough information to understand how compensation decisions are made in your culture. After all, it's not just compensation information you'll be sharing but, eventually, a whole new open-book pay-for-performance philosophy.)

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: 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.

Cafe Classic: The Compensation Cookbook

Compensation Cafe

Editor's Note: In today's post, Jim Brennan serves up his Classic tale of The Answer to our compensation design and practice challenges. . The Compensation Cookbook will solve all your problems.

Suppressing Excessive Compensation

Compensation Cafe

Some giants in the compensation consulting community have spoken out in the past, motivated by a sincere sense of guilt for encouraging the tremendously disproportionate top executive pay that resulted from their prior yeoman work enabling unreasonable compensation.

Cafe Classic: 5 Lessons from a Failed Startup Applied to Compensation

Compensation Cafe

As I read them, I realized each one applied to the world of compensation just as much as they did the world of entrepreneurs. I thought I’d share these with the Compensation Café readers and invite readers to add their own lessons. We all need to clean our compensation house more often.

You ARE Being Replaced by AI

Compensation Cafe

Just a few months ago the last compensation professional on earth was terminated by their corporate overlord. People must be attracted, motivated and even retained (except for those poor saps from the compensation department.) September 5, 2028. The day has finally arrived.