The Downside of a Great Compensation Plan

A recent article discussed how some companies use
compensation techniques to retain employees and mistakenly
end up retaining the people who should be moving on.

The article noted that 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

The compensation system should be thoughtfully designed to
attract and retain the good employees and reward the
exceptional employees.

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 the beginning of a new
fiscal year.

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