Compensation can be a good tool for motivating employees, but it will rarely do so in isolation. It is important that we keep this in mind.
Managing and improving employee performance requires an array of skills and efforts, including (but not limited to) setting and communicating clear objectives, giving frequent and specific feedback, providing coaching and instruction, and sharing important information. It is easy to fall into the trap, and I see a lot of my clients go there, of believing that if they can just get the design of an incentive plan "right", if they can get a metric for every desired outcome somehow into the plan design, then performance improvement will just happen.
A good compensation plan does not excuse us from the task of managing people; at best and when well-executed, it supports and reinforces the good management practices that are actively in place.
I agree. Compensation professionals tend to think that money is the answer to motivation and retention. On the other hand, others (the good supervision school) tend to overlook the importance of money. It's tough job to get the combination working right.
Posted by: Frank Giancola | December 09, 2006 at 03:05 PM