Incentive compensation plans are based on the theory that rewards drive behavior. Applied to your organization, incentive compensation plans enable will enable you to produce targeted results by rewarding employees who are responsible for those results. Although commissions (sales based) are likely the most well-known example of an incentive plan, the arrangement exists at various levels of an organization.
Rewarding high performers, at the expense of low performers, correlates strongly to greater overall organizational performance. However, successful incentive plans require advanced research, planning, performance tracking and evaluation to confirm that the incentive plan is working as intended. If employees do not believe the organization’s goals are realistic, and that they have a realistic chance of benefiting financially from their organization’s success, then the incentive pay plan will be unsuccessful.
Either as part of a complete compensation study or as a stand-alone project, Richardson Compensation Consulting, LLC can design an effective incentive plan that’s communicated in a way that garners trust among employees, 2) compliant with all legal requirements and 3) aligned with the organization’s business objectives and HR strategy.