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Private16508

   
Incentive Plan Template  
Posted: 07/27/2009 09:48am   483 Views
  

I am looking for a resource to assist in developing an incentive plan template.  Can you recommend a book or online template?  Do you have a sample you would be willing to share?  Thank you!


Private10790

   
Incentive Plan Template  
Posted: 07/27/2009 10:41am  
  

Should be some in the Resource Center's One-Stop Topics under Incentives.


Private16508

   
Incentive Plan Template  
Posted: 07/27/2009 11:23am  
  

Thank you for your response.  I contacted WorldatWork and they didn't have a resource.  They recommened posting the question through the Community group.  I am having quite the challenge finding a book or sample.


Private10775

   
Incentive Plan Template  
Posted: 07/27/2009 11:52am  
   (2 ratings)

Debbie,

If designing an incentive plan was as easy as walking up to a networking site, broadcasting a request, and then waiting for it to be handed to you on a silver platter, then hundreds or thousands of consultants would be out of work. 

"One size does not fit all" as the saying goes.  There are process considerations like getting people who will be impacted by the program to be involved in the development process.  There are foundational considerations like what will be the basis for the measurement system - subjective evaluations, financial measures, or a balanced scorecard of metrics.  There are design considerations such as how much money will be spent on the plan.  There are linkage considerations about tying a range of dollars to a range of performance outcomes.

Nonetheless, here are some WorldatWork articles that can get you started on thinking about incentives:

Good luck on your new endeavor!  Come back and visit us with specific questions along your journey. 


Private10790

   
Incentive Plan Template  
Posted: 07/27/2009 11:55am  
  

Thought I've seen some in the older white papers there, such as the Schuster/Zingheim 2005 Article on Best Incentive Practices and some 2003 article on Effective Incentives.  Problem may be that there is no one template for The Single Universal Right Way, other than the standard quid pro quo:

  • if you produce >A in output results, you get X reward
  • if you produce ~B in output results, you get Y reward
  • if you produce <C in output results, you may get to keep your job

Private10775

   
Incentive Plan Template  
Posted: 07/27/2009 12:23pm   Revised: 07/27/2009 12:54pm  
  

A visual representation of what Jim is talking about with A, B & C, appears in the "Balanced Scorecard & PFP" and "What PFP Should Measure" articles. 


Private12009

   
Incentive Plan Template  
Posted: 07/28/2009 06:33am  
  

One of the first steps would be to determine what type of incentive plan you are interested in designing. Are you planning to put in a typical objective-based incentive plan, a gainshare plan, a profit share plan, etc. What employee population are you targeting. Will the plan be individual-based, team-based or company-wide. The templates for the different types of incentive plans would be vary.


Private16544

   
Incentive Plan Template  
Posted: 07/28/2009 08:37am   Revised: 07/28/2009 08:59am  
  

Another suggested starting point... "What are we (as a company) attempting to incentivize?"

A lot of what's already been stated by others in this thread will then 'naturally' come together once you start down that path of aligning incentives to the strategic goals of the organization.  Goals (financial or non-financial) can be as diverse as one can imagine depending on where an organization is in its maturity.  Once the goals have been determined, the next question is how do we (as an organization) get there?  That's where metrics will come into play.  And these will likely be different from business group to business group as each will have their own way to "get us there" as a whole.  By then, the plan design will hopefully be a clearer picture -- one that could be individual or group or team incentive or a mix -- whatever best gets you to the finish line.  The important thing is that everyone in the organization understands that they are all contributing to the *same* goal... helping each other... working together... and that you are not creating incentives for employees or employee work groups to work *against* each other.  Obviously, that would be incentivizing the wrong behaviors and working against your organizational strategies.  This is one reason why many incentive plans are designed as a mix of multiple 'factors' or 'multipliers' that are both individual, group, and team based.  Each contribution is calculated separately (based on results in each area) and then the final result determines the award or incentive.  To take this one step further, each 'factor' would have its own separate threshold for "success" -- and depending on what you want to achieve with the plan -- thresholds can significantly reduce the final award/incentive or eliminate the award/incentive altogether.

So... I guess what I'm trying to add to the discussion is the strategic planning piece.  If you have a strategic planning department that's an ideal place to start.  If not, and you're a smaller organization, then a visit with the company president probably isn't a bad starting point.

Just more food for thought...


 
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