Is “Annual Incentive” a Contradiction in Terms?
FEBRUARY 15, 2016
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. The results from a recent Willis Towers Watson survey suggest only 20% of organizations find that merit pay is an effective driver of individual performance, while 50% say the same of their annual incentive programs. There is a design element to explaining the ineffectiveness of annual incentives.