What Incentives Can Do, What Incentives Cannot

Compensation Force

Incentive compensation. Powerful stuff when used well and - unfortunately - potentially even more powerful when misused and misdirected. Chip and Dan Heath said it well. Incentives are dangerous, and not just because people game them. Incentives are like that jet engine.

Taming the Incentive Beast

Compensation Force

Left on their own, with no boundaries or constraints, incentive plans will often multiply like rabbits. I recently spoke with a compensation professional who claimed that her organization has over 300 incentive plans in place. Good luck in taming YOUR incentive beast!

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Variable Pay: Is There a Difference Between a Bonus and an Incentive?

Compensation Today

Is there a difference between a bonus and an incentive? Under the umbrella you can find any number of bonuses, incentives, commissions, and other cash comp that is contingent on something happening. Bonus” falls under the umbrella. Choosing Incentives or Bonuses.

The Real Cost of Mismanaged Incentives: Wells Fargo

Compensation Cafe

Well, so much for the warm-hearted caffeinated, pick-me-up from the Comp Café. Today is a steaming jolt of quadruple espresso in response to the Wells Fargo incentive pay mess. I answered that if I had been asked a few weeks ago, Wells Fargo would have been on the list.

Is Your Annual Bonus Guaranteed?

Compensation Cafe

When worried organizations consider methods to get their arms around (control) high payroll expenses, they typically turn a blind eye to the variable pay component, to annual bonuses or incentives. Just be careful not to over-compensate the incentive payments to make up any loss.

The Dark Side of Incentives

Compensation Cafe

When describing their annual incentive plan (STI) most organizations will highlight to eligible employees the upside reward opportunities provided by the plan. But there’s usually less talk about what happens when times are tough, as incentive communication tends to focus on the positive.

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.

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.

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.

Behavior Bonus: Performance Enablement

Kazoo

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. Using Incentives for Performance Enablement.

If Bonuses Don’t Work – What’s the Right Incentive for Referral Programs?

marenated HR

Chances are high your company offers employees a monetary bonus when they refer a candidate who then is hired (and who stays with your company for a set number of months). But there’s a problem: Referral Bonuses Don’t Work! Answer: as powerful as referral bonuses are when employees refer people they know to you, they only work if employees actually refer job candidates. And if she stays long enough, who is responsible for asking for the bonus? Well, I have no say.

If Bonuses Don’t Work – What’s the Right Incentive for Referral Programs?

marenated HR

Chances are high your company offers employees a monetary bonus when they refer a candidate who then is hired (and who stays with your company for a set number of months). But there’s a problem: Referral Bonuses Don’t Work! The Bonus Offered Is “Meh.”. Well, I have no say.

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. Wells Fargo just paid $185M in fines and penalties because its employees fraudulently opened additional accounting for people who were already customers.

Cafe Classic: Don't Blame Incentives

Compensation Cafe

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. Because incentives are powerful, they should be designed and implemented with great care.

Friday Five: Year-End Bonuses

Workology

Between scrambling to finish our holiday shopping, avoiding embarrassing ourselves at the office party, and planning our spring vacation – soon, friends, it’s coming soon – we’re busy seething over someone else’s year-end bonus. Well, no, they don’t.

Stop Wasting Money on Signing Bonuses: 3 Recruiting Incentives That Actually Work

Yello

Candidates may feel great about getting a 5–25% bonus check but having to sign a scary-sounding contract detailing what’s going to happen if they leave too soon feels icky. And if word gets out that signing bonuses were offered to some employees and not others?

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

Astron Solutions

employers gave out performance-based bonuses. In its final review, SHRM focused on how organizations determine the measures of short-term incentive pay, with a reference to the Empsight 2018 Policies, Practices & Merit survey report ( [link] ). Photo by Lukas from Pexels.

Autonomy, Incentives and Motivation

Compensation Cafe

Typically, we think of a pay for performance system as having well-defined edges. With this kind of autonomy, monetary incentives reinforce intrinsic motivation. Even competitive incentives awarded on a discretionary basis have this reinforcing effect.

The Not-so-secret Formula to Making Incentives Work

RecognizeThis!

To be effective, recent research suggests incentives are best paired with recognition. Whether or not incentive programs are effective has been a long standing question, spanning multiple academic disciplines. Well, it turns out to not be quite that simple. by Derek Irvine.

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.

Compensation Cafe: Promotions, Bonuses, Raises, Recognition – When They Work (and When They Don’t)

RecognizeThis!

You can’t give all employees promotions, bonuses, or raises. ” Many companies distribute annual bonuses around the holidays, leading me to ponder the best time and use for bonuses as well as the other major reward methods of promotions, raises and, of course, recognition. Bonus & Incentives Social Recognition bonuses compensation cafe promotions raises recognition and reward Recognize This! -

Matching Incentive Promotions to Partner Personality Types

Workstride

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.

Money for Motivation: How Incentive Based Pay Works

UpstartHR

We want to instantly think that we can drive performance or discourage behaviors through monetary incentives. Here are a few: Bonuses. Group incentives. This is identical to the fixed/variable cost discussion as it pertains to economics as well.

Incentive Pay is Like a Par 4 Golf Hole

Compensation Cafe

The practiced CEO performed well and graciously accepted that there are times when second place is just fine. Joe did well and used some of his winnings to pay for a set of lessons for Kathy.

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 planned her year well and executed with the precision of a heart surgeon. She also combined all of these skills to build and manage her incentive compensation plans.

Tips for Safety Incentive Programs

HR Daily Advisor

A safety incentive program is one option for employers to implement to help to improve safety in the workplace. What Are Safety Incentive Programs? First off, what are we talking about when we say “safety incentive program”?

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.

Employee Bonuses 101

Namely

There is a lot to be aware of when it comes to bonuses. Small HR teams have a lot on their plate already, so bonus season can seem even more time consuming and chaotic. To help, we’ve compiled four essential elements to consider when setting up a bonus system. Timing Bonus cadence can take a variety of forms. There have been cases made for annual, semi-annual , holiday, and even spot bonuses. What do you want bonuses to achieve?

Cafe Classic: Does Your Incentive Plan Work?

Compensation Cafe

Editor's Note: Are your incentive plans rolling along on autopilot? When is the last time that you reviewed the effectiveness of your management incentive plan? For example, is one of the goals of your incentive program to change behavior? That's why it's called incentive.

The 5 Elements of a Good Incentive Plan

Compensation Today

Offering incentives is a practice that has seen increased popularity over the past decade. In PayScale’s 2017 Compensation Best Practices Report , over 60 percent of organizations surveyed said they give individual incentives, and nearly a quarter of them reported giving team incentives.

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. All of the familiarity, ease, and well-thought-out designs would be pointless if the final product sucked. Make sure your incentive plan delivers on its promise.

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.

Incentive Programs for the Hourly Workforce

Kazoo

College students may not be interested in PTO bonuses but new apparel is pretty dang cool. At my company, we have a program called “Seeds of Incentive” or more simply put Seeds. In the last year we did a major facelift to our safety incentive program.

Cafe Classic: Reviewing Your Incentive Plan: A Three-Tiered Conversation

Compensation Cafe

Editor's Note: Reviewing existing incentive plans is part of the job for many of us. For my money, the best way to get a handle on how well a plan is serving your needs and what changes should be made to position it for the upcoming year is via a hierarchy of internal conversations.

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?

The Best Employee Incentive Programs For Businesses: 4 Tips

Genesis HR Solutions

Is the line between “employee appreciation” and “employee incentive” a little blurry to you? However, I think it’s important that we do attempt to clarify the differences, because effective employee incentive programs serve a different purpose than employee appreciation programs.

Excessively Successful Incentives

Compensation Cafe

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.