The Downside of a Great Compensation Plan

Our firm assists many clients in creating compensation
plans designed to reward and retain employee. However if
not administered correctly, a great compensation plan can
mistakenly end up retaining the people who should be
moving on.

An exceptional compensation plan can be a disservice to
some employees who are no longer engaged but are paid too
much to find another position. In essence, the comp plan
is so good that it “bars the door” and retains disgruntled
individuals.

HR POINTER: Getting the “deadwood” out of a company is not
the role of the compensation plan. It is the role of
management.

With regard to the employees who are not meeting
expectations, it is up to management to ensure that the
compensation system does not reward mediocrity with annual
increases simply because it’s time for annual performance
evaluations.

 

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