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WorldatWork Journal

3rd Quarter 2014  |  Volume 23  |  Number 3

Culture: The Missing Link Between Remuneration and Motivation
By Linda Herkenhoff, Ph.D., CCP, CBP, St. Mary's College
Culturally tuned remuneration can provide employers with a competitive edge over those organizations that do not look beyond a traditional approach to remuneration design. A large global survey conducted by the author over several years suggests that employees prefer remuneration that aligns with their cultural values. In other words, certain forms of pay and benefits have different values within different cultures. This article highlights how national culture can provide the missing link between remuneration and motivation. The Cultural Remuneration Behavior model (CRB) is provided as a managerial tool in better understanding the relationships among remuneration, motivation and culture in designing local-national remuneration plans.


Direct Salesforce Versus Independent Representatives: A Strategic Choice Across a Business Life Cycle
By Pankaj M. Madhani, Ph.D., ICFAI Business School
While organizations devote considerable time and money to manage their salesforces, few give much thought to the roles that internal (or direct) and external (independent representatives) salesforces play over the life cycle of a business. This article presents research on the economic and non-economic factors to be considered when determining a salesforce structure throughout a business's life cycle.


The X-Factor: Which LTI Measures Drive Corporate Performance? By James F. Reda and David M. Schmidt, Arthur J. Gallagher & Co.
This article presents an analysis of long-term incentive (LTI) plans for top executives in 200 of the largest U.S. companies. The authors studied three measures – total shareholder return, earnings per share and capital efficiencies – for performance-based grants. The study found that for all measures, the effectiveness of LTIs in influencing company performance increases when a plan is administered consistently over a five-year period.


Pay for Performance: Getting it Right Throughout the Organization
By Don Delves, Emory Todd, Lori Wisper, Towers Watson
While pay for performance is certainly not a new topic, it remains an issue that many companies struggle to address. In recent years, much attention has been paid to executive pay for performance and in particular, generous CEO pay packages. However, executive compensation is more sensitive to company performance and stock price performance than it's ever been. In fact, while executive compensation remains high, CEO and executive pay is generally fairly closely aligned with performance these days.

In contrast, typical worker pay is not. Budgets for merit pay have shrunk and incentive pools are often funded below target levels making it difficult to drive and reward employee performance. This article explores the considerations that organizations must consider to strike the right balance in pay for performance through all levels of the workforce.

Designing an Effective Corporate Health and Wellness Strategy
By Celina Pagani-Tousignant, Normisur International and Asako Tsumagari, Mevident Inc.
The next few years are critical for employers to take drastic action in their health and wellness strategy. However, a company's business focus, not regulatory changes, should drive health and wellness strategy. By understanding and connecting the company's business focus with key HR metrics, the HR manager will ascertain what is required of the health and wellness strategy. HR managers can develop their health and wellness strategy, evaluate programs, determine new programs and guide senior executives without being entrenched in tactical and operational matters.


Executive Pay Disclosure: Realized and Realizable Pay

By Eric Hosken, Michael Keebaugh and Kyle Eastman, Compensation Advisory Partners (CAP)
The alignment of pay with performance continues to draw the attention of companies, investors, shareholder advisory firms, and compensation professionals. Traditional definitions of pay included in regulatory filings have the potential to provide a misleading picture of compensation when viewed in the context of performance. In an attempt to communicate a more accurate and meaningful account of the compensation that is delivered to executives, companies have begun to include realized and/or realizable pay disclosure in their annual proxy statement. In many situations, this disclosure is essential for the illustration of a pay-for-performance link. However, these definitions of pay are far from perfect. In this article, the authors provide an overview of realized and realizable pay, which includes the advantages and disadvantages of each relative to traditional pay definitions and the prevalence of disclosure among Fortune 250 companies, in an attempt to determine which definition — if either — is preferred.


Published Research in Total Rewards