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Carol Johnson's headshot
Carol Johnson Controller

How effective is incentive compensation?

Asked on March 9, 2015

What have you and your company found to work best when offering incentive compensation? What hasn't worked?

Answers

Ernie Humphrey CTP's headshot
Ernie Humphrey CTP VP, Thought Leadership • March 9, 2015

Carol, I have moderated a few webinars for Proformative on this topic. You might find the webinar recordings useful:The Science of Incentive Compensation Programs: The DNA of What Works (https://www.proformative.com/events/science-incentive-compensation-programs-dna-what-works), and Achieving Growth and Profitability through Better Compensation Planning (https://www.proformative.com/events/achieving-growth-profitability-through-better-compensation-planning).

Also, I contributed a blog, Incentive Compensation: The Anatomy of Competitive Advantage ( https://www.proformative.com/blogs/ernie-humphrey/2014/12/05/incentive-compensation-plan) based on one of these webinars that may also offer a bit of insight.

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Mark Matheny VP - FInancial Planning and Analysis • March 11, 2015

Taking the best of various companies' plans I have been involved with: One set of goals for all employees that is available on a consistent basis. EBITDA, for example. (Individual performance is a separate measurement that impacts merit increase, not incentive.) Uncapped so there is a desire to keep driving improvement. Consistent plan for a number of years rather than changing the metric every year. (Base may change, but metric is consistent.)

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Filed Under: Human Capital
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