How do you know your employee incentive scheme is working?
Employee Incentive Scheme
If an organization has never evaluated its scheme, it can never be too sure what impact the scheme is having on its people and performance.
So your organization is one of those with an incentive scheme, which is designed to drive high performance and align employees’ interests with those of shareholders! Well, what makes you so sure that the scheme is generating significant value for the regular payouts that employees receive from it? If an organisation has never evaluated its scheme, it can never be too sure what impact it is having on its people and performance.
Why incentive schemes do not deliver desired results
• Many companies do not step back to assess the effectiveness of their schemes
• Selecting the “right” performance measures can be a challenge
• Poor design mechanics –getting the threshold and maximum performance levels right
• Weak performance management systems (PMS)
• Insufficient differentiation
• Materiality of payout
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