http://davidmaister.com/blog/548/Compensation-Systems
Passion, People and Principles
post # 493 — Friday, January 25, 2008 — a Managing, Strategy post
Compensation Systems
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I’m thinking of writing a monograph or a book on compensation systems. As part of it, I began a list of some of the things a compensation system needs to accomplish. It’s a long potential list of objectives – too long, since no one system can accomplish all too many objectives – and many of them are contradictory!!
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The compensation system should not be “game-able” by the company. You’ve focused all on what the company needs; what does the employee need? A “crystal’ box process that can’t be “past posted” by the company. Two of the most demoralizing experiences I’ve had was when I did hit a “home run” which should have paid a multi-million dollar bonus the rules changed AND, another time, they decided what they wanted to pay and “backed in” to that by tinkering with the formula. Argh!
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