Performance-Dependent Remuneration

THESE ARE SOME OF THE QUESTIONS WE ARE CONSTANTLY BEING ASKED:

  • • Is the remuneration relevant to every company and to every set of circumstances? Not always.
  • • Can money encourage conduct desirable for the organization? In many cases - yes!
  • • Can money cause people to operate in a manner undesirable to the organization? Certainly!
  • • Is money important to our managers and employees? For most of them - certainly!
  • • Do managers and employees perceive money to be an expression of success and appreciation? Certainly!
  • • Does only a fixed payment on its own encourage performance improvement over time? Only among few!
  • • Can payment made following a success incentivize toward further successes? Certainly!
  • • Is it right to use non-monetary remuneration as well to express appreciation and reward for success? Certainly!

A PERFORMANCE-BASED REMUNERATION PLAN HELPS YOU GET THE RELEVANT, CLEAR, AND PRACTICAL ANSWERS TO ALL THESE QUESTIONS AND TO MANY OTHERS. IT ENABLES YOU TO CHECK HOW YOU INTEGRATE REMUNERATION WITHIN THE BUSINESS’S OVERALL ACTIVITY.

WHO WILL A PERFORMANCE-BASED REMUNERATION PLAN SERVE?

A detailed plan, individually customized to the nature of the organization and its employees, is suitable for CEOs, members of management, Sales, Finance or Human Resource VPs, compensation and benefits managers and others who are interested in an organized model for remuneration which depends on the employees’ performance.

The program allows each one of these roles, who may already be managing performance-based remuneration systems, to look into what others are doing, what is common in similar companies and organizations, what kinds of programs and models are more effective or less, and when is there a chance that a specific program will achieve success in an organization.

Compvision’s experts have been supporting companies and organizations for 15 years in building performance-based remuneration plans, bonuses for executives and employees, incentives for sales managers and personnel, remuneration of service and manufacturing operations, and more.

WHAT ARE THE STAGES OF BUILDING THE PLAN?

1

understanding the customer

Review of the general strategy, targets, challenges, organizational culture, and organizational structure.

2

examination of the current state

Review of existing programs, if any. Analysis of the effectiveness, identification of gaps and issues to be improved

3

creating a benchmark

What is happening in similar companies and organizations, review of the model types and comparison of salary and remuneration.

4

presentation of alternatives

Setting main principles according to which specific programs will be built.

5

building programs

Building detailed remuneration plans, specification of the budget, the remuneration potential by role, specification of the parameters (indices) which will be measured, setting the relative weights of the parameters, measurement frequency, and building the “payment lines” (the link between the level of performance and the remuneration awarded for it).

6

running simulations

To forecast the program results and its effect on the company and on the rewarded employees.

7

REGULATORY COMPLIANCE (IF NECESSARY)

Adaptation of the models to the regulatory requirements in organizations such as financial institutions and public companies

8

presentation of the programs

Support and assistance in the implementation, presentation and dissemination of the message to the participants – explanatory presentations, Q&A documents, personal simulator, etc.

9

building the tools

For implementing the programs – files defining the targets, calculation files and simulators, individual and management reports, as per the customer’s requirements.

10

optional

Support and assistance in the implementation, presentation and dissemination of the message to the participants – explanatory presentations, Q&A documents, personal simulator, etc.

  • Calculation of the actual incentives and/or bonuses - performing the calculations while preserving discretion, meeting tight schedules, meticulous data control and transfer of the results in any desired format to the relevant entities within the organization.
  • Tracking and control of the effectiveness of the program and recommendations for modifications if necessary.

Creation of an orderly, detailed process for building performance-based remuneration plan will enable the organization to create a clear, coherent structure for remuneration, to evaluate its worthwhileness in different situations, to control budgeting and to monitor the results.