Expert insights. Personalized for you.
Could it be that we are designing and communicating incentives for our highest performance all wrong? A recent study titled “ Reappraisal of incentives ameliorates choking under pressure and is correlated with changes in the neural representations of incentives ” appears to show that the fear of losing a reward allows people to perform at the edge better than the desire for earning more award. MORE
Editor's Note: Three cheers for Dan Walter's cogent and Classic advice on how to make pay for performance more successful in your organization. Pay for performance continues to rise. However, the failure of pay for performance is rising almost as fast. MORE
When describing their annual incentive plan (STI) most organizations will highlight to eligible employees the upside reward opportunities provided by the plan. That is, the better your personal performance the greater the reward. MORE
How clear is the line of sight between your performance pay programs, strategically linked performance metrics and the organizational strategy? Do your managers see these performance measures as they really are (imperfect proxies for larger, intangible strategic constructs), or do they focus on the performance measures themselves as the ultimate goals? Managers will receive bonuses tied directly to their survey scores. MORE
Even small companies ( I’m looking at you, Mr/Ms HR Manager of a company with less than 250 employees ) can incorporate these elements into their compensation planning without too much stress. We want to instantly think that we can drive performance or discourage behaviors through monetary incentives. Here are a few: Bonuses. Group incentives. Variable compensation tied to business performance is the same thing. This Hinges on Performance. MORE
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. Dan Walter is a CECP and CEP and works as Managing Consultant for FutureSense. Dan has written several industry resources including an issue brief on Performance-Based Equity Compensation. MORE
These are just a few of the scenarios that can happen in performance management and salary discussions -- but remember that we'll be doing most of these discussions on video this year. Picture what it's like to have someone celebrate a personal best in your office. MORE
If you want to put one of best employee incentive programs in your workplace, you might need to step out of your own comfort zone and move away from cash rewards. Traditionally, employee incentives programs use cash rewards tied to a specific individual achievement. A bonus. But studies show that while cash incentives for employees’ motivation might work for a short-term boost, they can be counterproductive in the long run. MORE
How do you address employees who aren’t performing? I joined 15Five’s Director of People Science, Courtney Bigony and Chief Culture Officer, Shane Metcalf, in a recent webinar where we addressed ratings and compensation as they relate to performance reviews. In my book, Next Generation Performance Management , I differentiate between Performance Management 1.0 (PM and Performance Management 2.0 (PM is not tolerating poor performance. MORE
A friend of mine likes to say: “It’s not that incentive pay doesn’t work well, it’s that it works TOO well. 5,300 professionals and managers fired. Like any well-designed incentive compensation plan, Wells Fargo’s started with a strong company culture and a simple goal that required special effort. Where was the team whose counter-incentive plan was based on finding and correcting fraudulent activity on the part of plan participants? MORE
While the details on the ground at IGN Entertainment may have changed since then, their inspired peer-to-peer bonus plan brings us a great example of how we might engage employees in rewarding the heroic actions of their peers during our challenging times today. This post first ran in 2011. MORE
Many early-adopter organizations who jumped aboard the train to abolish employees’ performance ratings are finding themselves on a challenging journey that is characterized by two key questions: What does the elimination of ratings do to the organizational culture of high performance which is still propagated and undisputed in most of those organizations? Delegating these decisions to individual managers or to some machine-based algorithms is not the answer. MORE
Performance management system failure most often comes down to a lack of clear purpose. However, a lack of alignment can also derail performance management systems. Is Performance Management Aligned? While the performance review or appraisal process is usually the key point in managing performance, it is only one element of the performance management system. Managers are usually on the hot seat for failures. MORE
When we make performance management purely rules-based the people who score best are often those who are the best at following the rules, not the best at building company value. Our performance reviews and management systems, as well as our incentive plans and reward programs must all account for the fact that human beings are doing the performing. Lately it seems like many companies are considering getting rid of performance review scores altogether. MORE
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.” But, if you ask the people at the very top, they will usually tell you that people shouldn’t expect to get paid on their bonus. That leaves three that don’t fit our normal incentive models. MORE
What happens when you disappear raises, slim down bonuses, freeze salaries and/or jack up benefit costs? Many managers yearn to gussy up titles as a way of making employees feel better in a down market. As you know, managers have a bad habit of over-promising. MORE
Previously, we wrote about the pressing need to solve the performance management puzzle that baffles so many of our organizations. To “solve” performance management, we not only need to address each piece of the puzzle but we also must come to terms with a new set of realities. Here are five of the most critical new realities that, once embraced, will help us all solve the performance management puzzle: 1. MORE
From the article: Trying to gain a better understanding of the trends shaping the competitive environment has always been critical for managers. What might the possible scenarios mean for how we manage and reward our employees? MORE
Comparing incentive plans to a pandemic response seems like a stretch, but great incentive plans are all about stretching. Stretching company performance. Every good incentive plan project starts with a simple question. MORE
The survey also included responses to this question from HR professionals and managers, offering a good comparison point. According to them, ‘managers and executives leading by example’ and ‘a shared mission and values’ were some of the top attributes of culture. MORE
A recent Mercer 2019 Global Performance Management Study highlights the changing business scenario and the need for a more flexible and employee-oriented performance management system. What Makes a Difference in Performance Management? MORE
The new sales incentive plan was not well received. All the worldwide regional managers in the audience spoke up in loud protest when it was announced at the global sales conference. 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. MORE
I recently ran into a study on effective performance management practices that I want to share with you. Not because it says anything really new, but because it does a great job on focus and insight, attributes we can all use when it comes to performance management. whether employees perceive that central elements of performance management are designed well and function fairly." MORE
Editor's Note: Incentives are a tool. Incentives are not the cause of bad reinforcement programs, any more than forests should be blamed for the existence of warfare. Some opponents of incentives show the same thinking that would condemn trees because they may be shaped into spears, arrows and catapults instead of being turned into sturdy houses or inspiring artworks. Because incentives are powerful, they should be designed and implemented with great care. MORE
If you want to spend additional money on employee compensation without generating any impact on outcomes or behaviors, then give employees a bonus based completely on your discretion and tell them only that it is based on your judgment about what they deserve. MORE
At the end of the fiscal year, the department has information about raises which they transfer to managers who send it down the line. Talking things through using reference materials will also help everyone calm down a bit (see below) and build back her/his relationship with the manager. MORE
Because they act as signposts, they are visible both to your project team and to management. Projects can and will be stopped by your project sponsors or senior management when milestones are ignored or signal poor clarity of purpose. MORE
A new business year brings with it both the end and the beginning of the company’s annual management incentive plan cycle. While the left hand is busy processing performance assessments and award payouts the right hand is getting ready to launch the new cycle. MORE
While the Kazoo Employee Experience platform is primarily driven by spontaneous, timely employee recognition — some employees want specific incentives and directions for their behavior. This is where our Behavior Bonus functionality comes in. It’s a key part of a successful performance enablement program. Using Incentives for Performance Enablement. Behavior Bonus is, in its essence, an incentive tool. Real World Performance Enablement. MORE
Today is a steaming jolt of quadruple espresso in response to the Wells Fargo incentive pay mess. Let me start with the fact that I have been interviewed a few times about this story and even I was surprised by my response to the question, “What companies in the financial world are considered to have good incentive programs?” and Jim Brennan’s Excessively Successful Incentives ). Even worse, rather than adapting the incentive plan over time. MORE
Plus, you can help them manage their time effectively by communicating a single Total Rewards calendar for benefits, performance management and total compensation. "Total Rewards" makes a great title for an employee statement because it sums up what's on the page. MORE
Has your annual management incentive process become more bureaucratic (get those appraisal forms in on time!) But if you want to manage compensation, never mind lead or direct it, you have to stop playing follow the leader. MORE
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. Thousands of employees were discharged over scandalous fraudulent practices that generated illegitimate bonuses and enriched salespeople while bilking their clients. MORE
3 Performance Management Best Practices for Healthcare Sep. Too often healthcare workers are simply told “you need to do the following 25 things,” says John Lutz, Principal at ECG Management Consultants , consistently rated as one of the top healthcare consultancies in the U.S. Instead, performance management needs to sync with the overall mission of the organization. When workers feel disconnected from their mission, performance lags and outcomes decline. MORE
Surprisingly, management often tries to keep the dead horse alive. Instead of “dismounting”, management tries (as a last ditch effort) to revive the dead horse in question. However now the company really needs to set employee performance goals in sync with FY business goals. MORE
Can your employees tell the difference between a raise and a bonus? After all, we often don't make much of a communication effort when we award bonuses. Most employees don't really understand that business performance affects merit budgets. MORE
The Annual Performance Review is Dead! One of the main issues that HR leaders face when considering a progressive performance management program is how to revamp their employee compensation strategy. Alan Colquitt is one of the world’s greatest experts in the field of HR and performance management. Courtney: In your book, Next Generation Performance Management , you differentiate between Performance Management 1.0 (PM MORE
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. Each employee of Hilcorp was granted a one hundred thousand dollar Christmas bonus for their individual contributions to company success. No differentiation by title, grade, base pay, seniority, performance, race, sex, hair-color, weight or other irrelevant variables. MORE
Compensation Cafe
FEBRUARY 16, 2021
Can your employees tell the difference between a raise and a bonus? After all, we often don't make much of a communication effort when we award bonuses. Most employees don't really understand that business performance affects merit budgets.
15Five
SEPTEMBER 26, 2018
How do you address employees who aren’t performing? I joined 15Five’s Director of People Science, Courtney Bigony and Chief Culture Officer, Shane Metcalf, in a recent webinar where we addressed ratings and compensation as they relate to performance reviews. In my book, Next Generation Performance Management , I differentiate between Performance Management 1.0 (PM and Performance Management 2.0 (PM is not tolerating poor performance.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
15Five
AUGUST 28, 2018
The Annual Performance Review is Dead! One of the main issues that HR leaders face when considering a progressive performance management program is how to revamp their employee compensation strategy. Alan Colquitt is one of the world’s greatest experts in the field of HR and performance management. Courtney: In your book, Next Generation Performance Management , you differentiate between Performance Management 1.0 (PM
Compensation Cafe
JANUARY 9, 2020
When describing their annual incentive plan (STI) most organizations will highlight to eligible employees the upside reward opportunities provided by the plan. That is, the better your personal performance the greater the reward.
Compensation Cafe
JULY 19, 2019
I recently ran into a study on effective performance management practices that I want to share with you. Not because it says anything really new, but because it does a great job on focus and insight, attributes we can all use when it comes to performance management. whether employees perceive that central elements of performance management are designed well and function fairly."
Compensation Cafe
MAY 5, 2020
Comparing incentive plans to a pandemic response seems like a stretch, but great incentive plans are all about stretching. Stretching company performance. Every good incentive plan project starts with a simple question.
Possible Works
MAY 29, 2020
A recent Mercer 2019 Global Performance Management Study highlights the changing business scenario and the need for a more flexible and employee-oriented performance management system. What Makes a Difference in Performance Management?
Compensation Cafe
SEPTEMBER 13, 2016
A friend of mine likes to say: “It’s not that incentive pay doesn’t work well, it’s that it works TOO well. 5,300 professionals and managers fired. Like any well-designed incentive compensation plan, Wells Fargo’s started with a strong company culture and a simple goal that required special effort. Where was the team whose counter-incentive plan was based on finding and correcting fraudulent activity on the part of plan participants?
Compensation Cafe
JANUARY 3, 2019
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. Dan Walter is a CECP and CEP and works as Managing Consultant for FutureSense. Dan has written several industry resources including an issue brief on Performance-Based Equity Compensation.
Compensation Cafe
JUNE 20, 2016
When we make performance management purely rules-based the people who score best are often those who are the best at following the rules, not the best at building company value. Our performance reviews and management systems, as well as our incentive plans and reward programs must all account for the fact that human beings are doing the performing. Lately it seems like many companies are considering getting rid of performance review scores altogether.
Compensation Cafe
SEPTEMBER 29, 2016
Today is a steaming jolt of quadruple espresso in response to the Wells Fargo incentive pay mess. Let me start with the fact that I have been interviewed a few times about this story and even I was surprised by my response to the question, “What companies in the financial world are considered to have good incentive programs?” and Jim Brennan’s Excessively Successful Incentives ). Even worse, rather than adapting the incentive plan over time.
|
Compensation Cafe
FEBRUARY 5, 2019
Could it be that we are designing and communicating incentives for our highest performance all wrong? A recent study titled “ Reappraisal of incentives ameliorates choking under pressure and is correlated with changes in the neural representations of incentives ” appears to show that the fear of losing a reward allows people to perform at the edge better than the desire for earning more award.
Compensation Cafe
DECEMBER 15, 2015
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. Each employee of Hilcorp was granted a one hundred thousand dollar Christmas bonus for their individual contributions to company success. No differentiation by title, grade, base pay, seniority, performance, race, sex, hair-color, weight or other irrelevant variables.
Compensation Force
MARCH 18, 2020
While the details on the ground at IGN Entertainment may have changed since then, their inspired peer-to-peer bonus plan brings us a great example of how we might engage employees in rewarding the heroic actions of their peers during our challenging times today. This post first ran in 2011.
Compensation Cafe
JULY 21, 2016
The new sales incentive plan was not well received. All the worldwide regional managers in the audience spoke up in loud protest when it was announced at the global sales conference. 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.
Compensation Cafe
JULY 24, 2019
Editor's Note: Incentives are a tool. Incentives are not the cause of bad reinforcement programs, any more than forests should be blamed for the existence of warfare. Some opponents of incentives show the same thinking that would condemn trees because they may be shaped into spears, arrows and catapults instead of being turned into sturdy houses or inspiring artworks. Because incentives are powerful, they should be designed and implemented with great care.
Precheck
SEPTEMBER 13, 2018
3 Performance Management Best Practices for Healthcare Sep. Too often healthcare workers are simply told “you need to do the following 25 things,” says John Lutz, Principal at ECG Management Consultants , consistently rated as one of the top healthcare consultancies in the U.S. Instead, performance management needs to sync with the overall mission of the organization. When workers feel disconnected from their mission, performance lags and outcomes decline.
ATD Human Capital
MARCH 22, 2016
Performance management system failure most often comes down to a lack of clear purpose. However, a lack of alignment can also derail performance management systems. Is Performance Management Aligned? While the performance review or appraisal process is usually the key point in managing performance, it is only one element of the performance management system. Managers are usually on the hot seat for failures.
Compensation Cafe
SEPTEMBER 14, 2016
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. Thousands of employees were discharged over scandalous fraudulent practices that generated illegitimate bonuses and enriched salespeople while bilking their clients.
UpstartHR
NOVEMBER 24, 2014
Even small companies ( I’m looking at you, Mr/Ms HR Manager of a company with less than 250 employees ) can incorporate these elements into their compensation planning without too much stress. We want to instantly think that we can drive performance or discourage behaviors through monetary incentives. Here are a few: Bonuses. Group incentives. Variable compensation tied to business performance is the same thing. This Hinges on Performance.
Compensation Cafe
JANUARY 15, 2021
A new business year brings with it both the end and the beginning of the company’s annual management incentive plan cycle. While the left hand is busy processing performance assessments and award payouts the right hand is getting ready to launch the new cycle.
Compensation Cafe
AUGUST 6, 2020
Plus, you can help them manage their time effectively by communicating a single Total Rewards calendar for benefits, performance management and total compensation. "Total Rewards" makes a great title for an employee statement because it sums up what's on the page.
Compensation Cafe
MARCH 5, 2021
The survey also included responses to this question from HR professionals and managers, offering a good comparison point. According to them, ‘managers and executives leading by example’ and ‘a shared mission and values’ were some of the top attributes of culture.
Compensation Cafe
OCTOBER 1, 2020
These are just a few of the scenarios that can happen in performance management and salary discussions -- but remember that we'll be doing most of these discussions on video this year. Picture what it's like to have someone celebrate a personal best in your office.
Compensation Cafe
FEBRUARY 1, 2018
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.” But, if you ask the people at the very top, they will usually tell you that people shouldn’t expect to get paid on their bonus. That leaves three that don’t fit our normal incentive models.
Compensation Cafe
JUNE 16, 2020
What happens when you disappear raises, slim down bonuses, freeze salaries and/or jack up benefit costs? Many managers yearn to gussy up titles as a way of making employees feel better in a down market. As you know, managers have a bad habit of over-promising.
Compensation Cafe
JANUARY 5, 2021
Because they act as signposts, they are visible both to your project team and to management. Projects can and will be stopped by your project sponsors or senior management when milestones are ignored or signal poor clarity of purpose.
Reviewsnap
JANUARY 21, 2014
Previously, we wrote about the pressing need to solve the performance management puzzle that baffles so many of our organizations. To “solve” performance management, we not only need to address each piece of the puzzle but we also must come to terms with a new set of realities. Here are five of the most critical new realities that, once embraced, will help us all solve the performance management puzzle: 1.
Compensation Cafe
AUGUST 14, 2020
If you want to spend additional money on employee compensation without generating any impact on outcomes or behaviors, then give employees a bonus based completely on your discretion and tell them only that it is based on your judgment about what they deserve.
SuccessFactors
JANUARY 23, 2017
Many early-adopter organizations who jumped aboard the train to abolish employees’ performance ratings are finding themselves on a challenging journey that is characterized by two key questions: What does the elimination of ratings do to the organizational culture of high performance which is still propagated and undisputed in most of those organizations? Delegating these decisions to individual managers or to some machine-based algorithms is not the answer.
Compensation Cafe
SEPTEMBER 23, 2020
Editor's Note: Three cheers for Dan Walter's cogent and Classic advice on how to make pay for performance more successful in your organization. Pay for performance continues to rise. However, the failure of pay for performance is rising almost as fast.
Compensation Cafe
JANUARY 19, 2021
Has your annual management incentive process become more bureaucratic (get those appraisal forms in on time!) But if you want to manage compensation, never mind lead or direct it, you have to stop playing follow the leader.
Compensation Cafe
APRIL 17, 2017
How clear is the line of sight between your performance pay programs, strategically linked performance metrics and the organizational strategy? Do your managers see these performance measures as they really are (imperfect proxies for larger, intangible strategic constructs), or do they focus on the performance measures themselves as the ultimate goals? Managers will receive bonuses tied directly to their survey scores.
Compensation Cafe
JUNE 25, 2020
At the end of the fiscal year, the department has information about raises which they transfer to managers who send it down the line. Talking things through using reference materials will also help everyone calm down a bit (see below) and build back her/his relationship with the manager.
Kazoo
MARCH 16, 2017
If you want to put one of best employee incentive programs in your workplace, you might need to step out of your own comfort zone and move away from cash rewards. Traditionally, employee incentives programs use cash rewards tied to a specific individual achievement. A bonus. But studies show that while cash incentives for employees’ motivation might work for a short-term boost, they can be counterproductive in the long run.
Compensation Cafe
APRIL 8, 2020
From the article: Trying to gain a better understanding of the trends shaping the competitive environment has always been critical for managers. What might the possible scenarios mean for how we manage and reward our employees?
Compensation Cafe
DECEMBER 11, 2020
Surprisingly, management often tries to keep the dead horse alive. Instead of “dismounting”, management tries (as a last ditch effort) to revive the dead horse in question. However now the company really needs to set employee performance goals in sync with FY business goals.
40 
Let's personalize your content