Oh yeah – that school bus. That bright yellow, red flashing vehicle just snapped you out of your commuting daze and screamed to the Comp professional in your brain – the starting bell just went off for the annual incentive compensation design season!The starting bell just went off for the annual #incentive #comp design season! Click To Tweet
What season am I talking about? I’m talking about the season that starts with the reappearance of school buses and ends with the delightful delivery of annual short-term incentive compensation plans, finalized and in place right after that big, beautiful ball drops in Times Square. Timely incentive plans ensure that your workforce starts day one of the new year knowing what the business objectives are for the organization that year and how that employee contributes to and is rewarded for the attainment of those objectives.
Having fully prepared incentive plans in place by the beginning of the year doesn’t happen on its own. It takes commitment, active contribution, and perseverance of an assembled design team composed of you (Compensation), business leaders, Finance, and your HR partner. This team works together with the singular objective of having all final incentive comp plans in place by January 1. I’ve experienced being a member of this type of design team for many years and the team approach works.
What exactly does this team do, you ask? Here’s the back-to-comp-school checklist:
- The process starts with a retrospective which evaluates the current plan – what’s working and what’s not working. All project team members contribute based on their subject matter expertise.
- Then there will be design team brainstorming sessions on ideas for change, including the review of market data for the jobs.
- Once the brainstorming is done and design changes are agreed upon, the changes are tested by modeling the impact of the new plan on each employee in the plan.
- The final plan is vetted with Executives for approval.
- New plan documents are written.
- And finally, the team develops and executes a communication plan for the business leaders to deliver the new plan to the employees.
Having a plan and starting now is much better than the alternative: launching a panic-based initiative in late November to fix your dysfunctional incentive plan, spending three weeks working nights and weekends trying to find a solution to fix the plan, and eventually coming to the realization that there is no way anyone has time to get comfortable with plowing through changes.
If you don’t start now, the changes will not get done effectively and you’ll have to grudgingly decide to make just a few surface changes that tweak the edges of the plan, but don’t resolve any of the true issues. Everyone will live yet one more year under a broken plan and you’ll comfort yourself by saying “next year is the year for change!” Or so you tell yourself.
Instead of muttering to yourself and hitting the buttons frantically on your radio to find something to entertain you while you make that slow crawl behind the school bus at back to school time, use that time to organize this year’s incentive design project plan in your mind and compose the meeting invite titled “2017 Incentive Compensation Design Team Kick-Off” that you will be sending out the minute your butt hits your desk chair.
And I raise my PSL in the air, wishing you all a happy and productive incentive design season, humming “the wheels on the bus go round and round, round and round….”