GENERAL GUIDELINES FOR INCENTIVE COMP:

The higher you are in the organization, the lower on the income sheet to measure your performance.

Your incentive comp plan should be clear and controllable, challenging and achievable, rewarding, and aligned. 

Clear and controllable: Employees should see a direct path from their actions to results. The more degrees of separation between “my work” and “my pay,” the less motivating the plan. 

Challenging and achievable: Goals should feel like a stretch, but a realistic one. Rewards are more fulfilling when they come through striving. 

Rewarding: Make it meaningful. Employees should see their potential outcome and think “Wow, with that I could…”

Aligned: With the goals of the organization. Not just for the sake of the org, but achievement is more meaningful when you’ve contributed to something bigger than yourself.