How should reward strategies be tailored to each business?
Each business in the portfolio likely has a different impact on enterprise success and different business economics and profit models. Those factors should be considered as rewards for each business (and the overall enterprise) are optimized. For example, some businesses early in their evolution may call for a rewards strategy that is oriented toward long-term growth – with a corresponding focus, perhaps, on more leveraged incentive programs, a mix weighted to focus more on long-term incentives and performance measures that reinforce the importance of growth. On the other hand, a mature “cash cow” business in the portfolio may call for a rewards strategy that underscores rewards for current profitability and returns, so that the incentive programs may be less leveraged, the mix may provide more of a weight toward annual incentives and the performance measures might focus on profitability and expense control. • What do your executives value? The accounting costs of compensation are not
