Cherry and Green, both of whom are principals at HR consultant Hay Group, offer the table below to show how incentives fit into the total rewards picture. They offered their remarks at a recent webinar hosted by BLR/HR Hero.
Value of being a member of the organization
Value of your role
Value of your results
More flexible, little stability
Value of your contribution to a particular initiative
Recognition, spot bonus
Cherry suggests that typically incentives should:
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In assessing the best plan design for your situation, consider the following enablers and barriers to variable pay:
Cherry offers a table to emphasize the factors that help make an incentive program successful:
Watch out for those uncontrollable factors, says Green. For example, in wineries, you might be tempted to measure workers on the quantity of grapes, but that’s a factor of weather. So it’s better to measure, production or waste or some other factor more within control of the workers.
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Green outlines six approaches to incentive design for non-exempt employees. The table below shows advantages and disadvantages for each approach.
In tomorrow’s Advisor, the rest of the incentive types, plus great news—your job descriptions are updated, ADA-compliant, and ready to go with BLR’s SmartJobs.
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