Comments on: Incentive Compensation and Total Reward Strategies During a Recession http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html Mon, 21 May 2012 16:04:42 +0000 http://wordpress.org/?v=2.6 By: Incentive Travel During a Recession: The Benefits « Corporate Incentive Travel http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html#comment-4034 Incentive Travel During a Recession: The Benefits « Corporate Incentive Travel Wed, 04 Feb 2009 06:48:25 +0000 http://leapcomp.com/?p=669#comment-4034 [...] Incentive Compensation and Total Reward Strategies During a Recession [...] [...] Incentive Compensation and Total Reward Strategies During a Recession [...]

]]> By: admin http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html#comment-3430 admin Wed, 07 Jan 2009 16:59:48 +0000 http://leapcomp.com/?p=669#comment-3430 Ann, Paul - Thanks for having done all the hard work in finding, compiling and interpreting those survey results! Derek - thanks for the comment. You are right and I didn't mean to make it sound like I believe motivation is only important in a down economy, or that motivation and reducing employee turnovers were the only reasons to develop a variable compensation strategy. There are many other very important reasons for incentive compensation to exist (whether in good or bad time) including increasing revenues (through an increased performance), and decreasing cost while making them more predictable. Ann, Paul - Thanks for having done all the hard work in finding, compiling and interpreting those survey results!

Derek - thanks for the comment. You are right and I didn’t mean to make it sound like I believe motivation is only important in a down economy, or that motivation and reducing employee turnovers were the only reasons to develop a variable compensation strategy. There are many other very important reasons for incentive compensation to exist (whether in good or bad time) including increasing revenues (through an increased performance), and decreasing cost while making them more predictable.

]]> By: Derek Irvine http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html#comment-3427 Derek Irvine Wed, 07 Jan 2009 14:32:44 +0000 http://leapcomp.com/?p=669#comment-3427 Another important point as companies do "plan clean up" as Paul mentions -- most companies, especially large global organizations -- have multiple, disparate and largely untracked recognition efforts in place. Simply by consolidating all of these programs into one consistent, governable and compliant program, companies can save up to 50% of their current investment in recognition. Before cutting programs, company leaders should audit what they already have in place and find efficiencies through consolidation first. Another important point as companies do “plan clean up” as Paul mentions — most companies, especially large global organizations — have multiple, disparate and largely untracked recognition efforts in place. Simply by consolidating all of these programs into one consistent, governable and compliant program, companies can save up to 50% of their current investment in recognition.

Before cutting programs, company leaders should audit what they already have in place and find efficiencies through consolidation first.

]]> By: Derek Irvine http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html#comment-3426 Derek Irvine Wed, 07 Jan 2009 14:16:07 +0000 http://leapcomp.com/?p=669#comment-3426 Julien, very insightful post, especially your comment: "In a strong economy, one of the major arguments in favor of incentive compensation is employee retention. During a recession, the main argument is to keep employees motivated." I would argue keeping employees motivated to produce at their highest level of effort -- be fully engaged employees, if you will -- should be a priority in any economy, strong or slow. Company leaders always need employees delivering their best effort, particularly when that effort is fully aligned with company goals, objectives and values as well. A recession only amplifies the need as leaders now need to overcome employee fear, anger and resentment in addition to the rumor mill to get that best level of effort. Strategic employee recognition programs are a key tool to ensure employee effort is maximized, aligned with company objectives, and reflective of company values. These programs of course are useful sales incentive and similar initiatives, but strategic recognition is far more effective when applied to the entire employee population. All employees need recognition for their efforts and validation that their work is appreciated -- now more than ever. If those recognitions are tied to a company value demonstrated or strategic objective achieved (or contributed to), then employees begin to see how their individual efforts contribute to company success. This is by far the most positive and effective way of encouraging repetition of precisely those actions company leaders need from every employee to succeed in this recession. I blog about this need for recognition in an ailing economy here: http://globoforce.blogspot.com/search/label/recognition%20in%20an%20ailing%20economy Julien, very insightful post, especially your comment: “In a strong economy, one of the major arguments in favor of incentive compensation is employee retention. During a recession, the main argument is to keep employees motivated.”

I would argue keeping employees motivated to produce at their highest level of effort — be fully engaged employees, if you will — should be a priority in any economy, strong or slow. Company leaders always need employees delivering their best effort, particularly when that effort is fully aligned with company goals, objectives and values as well. A recession only amplifies the need as leaders now need to overcome employee fear, anger and resentment in addition to the rumor mill to get that best level of effort.

Strategic employee recognition programs are a key tool to ensure employee effort is maximized, aligned with company objectives, and reflective of company values. These programs of course are useful sales incentive and similar initiatives, but strategic recognition is far more effective when applied to the entire employee population. All employees need recognition for their efforts and validation that their work is appreciated — now more than ever. If those recognitions are tied to a company value demonstrated or strategic objective achieved (or contributed to), then employees begin to see how their individual efforts contribute to company success. This is by far the most positive and effective way of encouraging repetition of precisely those actions company leaders need from every employee to succeed in this recession.

I blog about this need for recognition in an ailing economy here:
http://globoforce.blogspot.com/search/label/recognition%20in%20an%20ailing%20economy

]]> By: Paul Hebert http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html#comment-3423 Paul Hebert Wed, 07 Jan 2009 11:07:32 +0000 http://leapcomp.com/?p=669#comment-3423 I think both you and Ann have hit the nail on the head - companies will use the economic issues we're facing as the excuse to do some plan clean up. I have seen it happen with staffing - layoffs due to "economic" reasons when in reality it was a cover to let some people go that should either have been let go before or never hired in the first place. SPM/ICM adjustments will be the same. It's a much easier path to blame the economy than yourself or your staff for making the initial mistake. I do think during tough economic times we see an "evolutionary" die off of companies and ideas that just didn't have the ability to live through the changes. It's just part of the circle of life. I think both you and Ann have hit the nail on the head - companies will use the economic issues we’re facing as the excuse to do some plan clean up. I have seen it happen with staffing - layoffs due to “economic” reasons when in reality it was a cover to let some people go that should either have been let go before or never hired in the first place.

SPM/ICM adjustments will be the same. It’s a much easier path to blame the economy than yourself or your staff for making the initial mistake.

I do think during tough economic times we see an “evolutionary” die off of companies and ideas that just didn’t have the ability to live through the changes. It’s just part of the circle of life.

]]> By: Ann Bares http://leapcomp.com/2009/01/incentive-compensation-and-total-reward-strategies-in-a-recession.html#comment-3413 Ann Bares Wed, 07 Jan 2009 01:45:09 +0000 http://leapcomp.com/?p=669#comment-3413 Julien - Thanks for the link! Cutting back the use of sales performance tools makes about as much sense as eliminating variable pay programs - but these studies seem to suggest there is a fair amount of short-sighted thinking out there these days. It will be an interesting year, won't it?! Julien - Thanks for the link! Cutting back the use of sales performance tools makes about as much sense as eliminating variable pay programs - but these studies seem to suggest there is a fair amount of short-sighted thinking out there these days.

It will be an interesting year, won’t it?!

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