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02/23/2010

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Laura, one more vote for keep it as simple as possible. For as long as I've been working in this field I have been wishing that incentive designs could be simpler. It's so difficult to see "what's in it for me" when the answer is buried in interdepedent measures complicated by multipliers. The logic of these designs make sound business sense, but they often have little emotional power because the complexity defuses a sense of achievement. Simple and straightforward has real power --and some scoreboards pull this off.

What do you do when there is just nothing in it for "them". We are preparing to take a small family run business and restructure the entire compensation package. Our principal is hell bent on making the package multi-leveled (to maintain the advantage to the company at all times) effectively making a non-program - program.

My own salary has been cut by 50% and I just can't seem to find the words to communicate how these actions WILL impact the business. Anyone worth anything will go and they will be left with those who just can not get work anywhere else.

Yeah! 15 years of my life flushing right before my eyes.


Thank you, Margaret, I think you hit it on the head with the phrase 'little emotional power.'

RF - This is a really great question. In my post, the assumption was that the overall compensation package is in the interest of the the employees and you just need to connect the dots. Whereas it's difficult to see how draconian measures to cut costs across the board, especially cutting current pay by 50%, is in the interest of the business unless it's a temporary belt-tightening measure to survive difficult times and avoid lay offs. If that's the case, you can try to help employees understand that everyone's in the same boat together, especially if management also takes large cuts as an example. If the measures are just to squeeze more profit with no end game in sight that benefits everyone, then I'm afraid you may be right. A 'What's in it for the business?' analysis may be more to the point, to help management see the longer-term implications of their policies.

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