Are compensation and incentive programs yielding unsatisfactory results?
While it seems obvious that you should clearly and directly reward successful job performance, it is remarkable that many companies unwittingly set up pay structures that reward performance altogether different from that outlined in the job description. Be careful what you pay for — you might just get it. One client paid dearly for such a system. They operated in a matrix organization, four selling divisions and a central support operation. The manager of professional support personnel was on an incentive plan based on 80 percent utilization of labor in the pool. The good people were always used while the poor performers were not. Sales required that more acceptable support be available for billable customer contract requirements, yet the manager did not hire to replace poor performers because that could change the utilization rate. The result was lost revenue opportunity, added carrying costs for nonperformers and a failure to meet company goals. The manager achieved his numbers, rec
