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3rd Quarter 2015 | Volume 24 | Number 3
Goal Setting: Meeting Stakeholder Expectations in an Increasingly Dynamic and Complex World
The challenge of setting meaningful, yet realistic, incentive plan goals has become more difficult in an increasingly complex world. The authors provide three sets of criteria to help guide companies in establishing meaningful goals that serve to meet key stakeholder expectations.
Incentive Compensation: Measures Matter
Getting measurement right is not easy but mandatory for incentive plans to accomplish an organization's goals. The right measures must be selected and the information necessary to measure results accurately must be available. It may be necessary to employ measures that are subjectively determined but all interested parties must accept that they are appropriate. The article provides guidance in setting effective incentive-plan measures under various business situations.
Is the Safelite Auto Glass Case Study All It's Cracked Up to Be?
By Frank Giancola
The Safelite Auto Glass case study is arguably the most prominent academic research article that describes how financial incentives motivate employees to higher levels of performance. Safelite is the largest provider of automotive replacement and repair services in the United States. The article explains how the productivity of Safelite's auto windshield installers improved by 44%, after its pay plan was switched from an hourly plan to a piece rate plan. This article examines the case, which was written by a labor economist, from a HR management perspective and uses outside sources of information to shed new light on what might have been behind the productivity gain. As it turns out, evidence suggests that most employees improved their performance primarily to save their jobs, as much as to increase their earnings by installing more windshields under the new piece rate plan.
Driving Compensation Strategy Alignment: Using Analytics to Benchmark Practices from European Normative Data
Rewards constitute a significant investment for all organizations. Thus, it is important to strategically leverage this key investment most effectively. This includes formalizing rewards programs to help drive employee attraction, retention and behavior — all of which, in turn, drive business objectives. This article offers an objective approach to both investigate differences in practice from norms and inform areas of focus. It uses a unique application of predictive analytics to measure strategies for employee rewards at a country level, taking advantage of incumbent-level data collected for pricing jobs. Key differences are shared across a set of European countries examined, and a blinded example illustrates the value of looking to company-specific differences. The analysis presented in this article is based on extensive incumbent-level data for seven European countries and encompasses approximately 640,000 employees across 1,750 organizations.
This paper examines cost-of-living allowances or adjustments (COLA) for Social Security, private-sector pension plans and various public-sector pension plans. While COLA arrangements have largely been replaced by specified annual increases in private-sector collective bargaining, the concept of indexing wages and salaries to inflation has been adopted by Social Security and defined benefit pension plans in the public sector. Inflation will cause income disparity between the public and private sectors and create pressure to curtail public-employee pensions.
Published Research in Total Rewards