Compensation Design

There are such a wide variety of incentive mechanisms, some more complex than others.  Traditionally these are structured and geared toward the sales and executive teams of an organization.  Here is the opportunity though based on human behavior: the level of compensation will determine who joins your organization, and it's the sensitivity of that compensation that will determine their motivation.   While this may not be entirely true for certain people, it is true at a macro level.  After all, compensation programs need to be designed for the functional areas; designing them at the individual level is simply unscalable.

Every area of a business is organized around a set of processes.  In certain organizations these processes are more well defined than others.  In compensation design, alignment to those processes and expectations is mission critical.  Traditionally this is easiest to achieve with a sales team by compensating for how much they sold.  That said, sales processes have evolved and now often includes cross functional participation in the sales process.  Again, the fundamental is still true, aligning compensation to the sales process expectations for that functional area ring through.  We can also expand on this concept and begin applying it to all areas of a business by simply understanding the main outcomes expected from the key processes they are responsible for and aligning the compensation for the relative value they create.

This last comment on compensating for the value they create is most critical.  At the end of the day, paying compensation to an individual or a team that is above the value they are responsible for will never make it past a credible finance team.  That's way we evaluate "what if" scenarios every time we design a compensation program.  It needs to be both motivating for the teams and affordable to the business.  To do this, we'll work with your respective functional leaders, HR, and finance teams to get this right in a way that creates a step function change in your employee engagement and operating performance.