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

Astron Solutions

Nowhere is this situation seen more clearly than in the balance between fixed and variable pay, since employee compensation in many industries is a company’s single largest expense. Why incentive Plans Fail: They seek to change or control behavior.

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

Astron Solutions

employers gave out performance-based bonuses. SHRM goes on to share data from the Willis Towers Watson General Industry Salary Budget Survey-U.S. In the meantime, however, we’d love to hear your thoughts on incentive compensation! Compensation General Incentive Pay Plans

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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.

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)? There is no shortage of research and data on either side of this questions. (a) This is your brain. (b)

Matching Incentive Promotions to Partner Personality Types


When it comes to the incentives that motivate us to work harder, we tend to respond differently based on our personalities. Sure, most of us greatly appreciate a generous bonus, commission or restaurant gift card in response to our achievements. Those same principles should apply as you’re designing the channel incentive promotions that are likely to motivate the people working for your partners, distributors, dealers, and others in the channel.

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.

5 Ways To Recognize Employees in the Transportation & Logistics Industry


That’s an especially big problem in an industry already facing high turnover. The transportation and logistics industry faces two serious headwinds. First, the industry suffers from consistently high turnover-in some cases close to 100% annualized.

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 ?

Is “Annual Incentive” a Contradiction in Terms?

Compensation Cafe

In the best cases, these schemes are designed to differentiate among performance levels, rewarding effort and results with annual merit pay increases and other annual incentives. Unfortunately, some recent data suggest that they may not be as effective as originally believed.

Is Your Safety Incentive Program Illegal Under OSHA?


What went wrong with the traditional safety incentive program? Many non-compliant safety incentive programs are based on lagging indicators; that is, success is built upon past activities and events that dictate that a company is headed in the right direction where safety is concerned.

6 Things You Think Are True, But Aren’t (Compensation Edition)

Compensation Cafe

Incentive pay motivates people to perform. It has been sold to businesses that a great incentive program can motivate a person. Incentive plans are there to remind everyone of what is important and to reward them if they stay focused and achieve their objectives.

How SRS Distribution Overcomes Industry Challenges with Culture Management


Do things with character and integrity as a responsible industry participant. However, SRS didn’t have hard data to support its hunches or make educated decisions about where to focus its energy. Magnifying Strengths to Troubleshoot Industry Challenges.

Cafe Classic: To Innovate in Rewards, Get Outside the Rewards Profession

Compensation Cafe

They will come from business leaders and others with talent management smarts (but perhaps not the "credentials") -- particularly (but not exclusively) those in emerging and fast-growth organizations and industries -- who are willing to experiment, put new ideas to work and learn from their efforts.

Study 60

Thank You for 10, 360 and 180,000 Reasons

Compensation Cafe

Even more importantly I truly want to thank each of you who have sent me a note, asked me a question or just walked up to me at some industry event and said hi. Every time it happens, I know that I have contributed, just a bit, to the industry that feeds my curiosity and my family.

You ARE Being Replaced by AI

Compensation Cafe

Base with a 31.69% target incentive level, based on the fourteen individually weighted metrics recently established by our big data mining exercise in conjunction with our actuarially-modeled best-case scenario using the recent new pricing model from that academic team at MIT.”.

Cafe Classic: All Decisions Are B.A.D. Decisions

Compensation Cafe

decisions, relying on the Best Available Data known at the time. Even compensation experts, supposedly the most analytical of HR types, have difficulties with data. decisions, made according to the “best available data” when action was required. .

Algorithms and Formulas Are Us

Compensation Cafe

We are moving rapidly into an increasingly “data-driven” age of Human Resources and Compensation. This data is translated into information. The age of data geeks is upon us and we need to be able to use that to our advantage. A perfect example of this is survey data.

Compensation Dentistry (part 1)

Compensation Cafe

Most of us do our regular maintenance and keep our base pay in line with our philosophy and relevant data. Annual and long-term incentive plans are often not as well cared for. Yes, incentive plans can be harder than base pay.

Cafe Classic: Follow the Leader is Dangerous, but So is Being the Leader

Compensation Cafe

From one side, we are asked to build programs based on survey data and peer group analysis. Far too often the survey data wins this battle, based not on “best fit”, but instead on a mythical “best practice.”. Often compensation survey data reports on a self-fulfilling prophecy.

Baking is to Science as Cooking is to Art, Pay = Both

Compensation Cafe

The company is unique in industry, location and compensation philosophy. Data sets, like great veggies or herbs, are often only available in small quantities at certain times of the year. The data sets are larger and less volatile. Incentive pay professionals are chefs.

Leading Vendors Announce Quizzify Partnerships to Satisfy Forthcoming Wellness Incentive Rules


The ruling upends the wellness industry by proscribing “voluntary” incentives for screenings and health risk assessments as of January 2019. Having safe harbor status is just a bonus.”

Ignore Parity. This Ain’t NASCAR!

Compensation Cafe

Most Compensation Philosophies could easily be converted to, "We pay almost identically to our peers, because the survey data is easiest to follow that way, and we are trying to get lucky enough to get a few great people who will either help us be slightly more competitive or avoid a big crash.”.

Cafe Classic: How Much More is Enough?

Compensation Cafe

Later, as I worked on metrics and goals for a long-term incentive plan, this brief conversation came back to me. We have to be better than simply citing survey data as our reasoning. Base Salaries Compensation Philosophy Incentives/Bonuses Pay for Performance

Your Employee Referral Program Guide: The Benefits, How-tos, Incentives & Tools


Your Employee Referral Program Guide: The Benefits, How-tos, Incentives & Tools. Here’s everything you need to know about employee referral programs, including benefits, how-tos, incentives, and tools. Establish an incentive structure for inspiring employee referrals.

5 Ways Credibility Comes with Communication

Compensation Cafe

Matching to market data generally seems either random or restrictive, depending on the communicator. Incentive plans seldom have back-testing to show the actual impact of past programs. Very few things in our industry are business-ending.

Why Do You Pay Women Less?

Compensation Cafe

The data isn’t perfect but isn’t very disputable either. Just so we are clear, incentive pay makes the wage gap worse. Usually, targeted incentive pay is a determined as a percentage of base pay. The leveraging of both short-term and long-term incentives magnifies the pay gap. The higher the position, the higher weighting of incentives to the base. Dan has written several industry resources including an issue brief on Performance-Based Equity Compensation.

Shock & Awe

Compensation Cafe

For those accustomed to only US surveys, you will find that the available data in many countries is more limited than what you’re accustomed to seeing, as are the number of companies involved. Availability of locally-grown survey data is another challenge.

Speed, Velocity and Acceleration in Pay

Compensation Cafe

Much of the data we use in compensation is like this. Most pay data provides as little information as the speed of a car in a race. It is like some of what the compensation industry considers to be “better” pay data.

You've Got to Start Somewhere!

Compensation Cafe

Market tested your incentive rates? Before you introduce the new, industry-standard compensation plan, how does compensation work in the company NOW? By the time you have 100-200 employees, you've decided to check your offers with some market data.

OMG! You Were Right All Along!

Compensation Cafe

Remember that time you spent weeks modeling a new incentive plan only to have it shot down? It’s difficult to stand your ground when a CEO or department head pushes back on a new incentive plan. Sometimes we have better data.

Cafe Classic: Are You Still Playing Follow The Leader?

Compensation Cafe

Or was your analysis complete once the survey data suggested a common trend? Then again, the reported "average" may be no more than an arithmetic exercise that is less a strong trend than rather a convenient manipulation of data points.

Cafe Classic: What Do CFOs Wish Compensation Professionals Knew?

Compensation Cafe

If you give me charts and summaries, back it up with full data sets. Dan has written several industry resources including an issue brief on Performance-Based Equity Compensation than Dan refers to as informative written Ambien.

Performance Pay for Gig Workers?

Compensation Cafe

There isn’t a lot of reliable data about this growing piece of the workforce. For time-sensitive tasks, a small early delivery bonus could be the little extra incentive your gig worker needs to make sure things are wrapped up on time.

Eternal Sunshine of the Spotless Mind

Compensation Cafe

What did your survey data look like three years ago? We make hundreds of small decisions like this every time we benchmark compensation, determine incentive pay levels, set goals, and decide on merit increase minutiae.

Corporate Social Responsibility, Corporate Performance and Executive Compensation

Compensation Cafe

If you're interested in how the data set was constructed, what models were estimated, etc., She teaches undergraduate and graduate courses on economic theory and labor economics in the College of Arts and Sciences and in Cornell’s School of Industrial and Labor Relations.