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The single greatest challenge, in my view, is to ensure that STIP/annual bonuses don't become an entitlement.

This can get to be really difficult; on the one hand, if you don't make your numbers, people shouldn't get a bonus. On the other, if your top performers don't get bonused, you've got serious retention risk with them.

I don't think there's a good (as in one size fits all) answer, but it's probably worth discussing.

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