One of the advantages of age (shout out to my fellow boomers) is that you've been around long enough to notice what happens in your profession during upswings and downswings in the economy. In my experience (and I've also begun doing a little research on this over the past several years), interest in variable pay (incentive compensation) tends to surge when the economy goes south.
While not every organization pulls off this move in a smart way (oh the stories we could tell), this trend makes sense to me on a lot of levels. Despite what Alfie Kohn says, I see incentives, when well-designed and well-implemented, as a form of partnership between employer and employee. If ever there was a time when all oars needed to be pulling in the same direction, it has to be now - so using incentives as a means of strengthening partnership seems like an idea whose time has more than arrived.
And when approached and executed in the right way, I see this partnership following a charter something like what I have scripted out below.
To be successful (or survive or avoid the need for drastic cost cutting measures or whatever) in 2009, we as an organization need to focus on the following one/two/three things...
<Insert one/two/three things>
... and we will measure them in this way way, with the following targets...
<Insert metrics and target performance levels>
We (leadership) will be talking to you at least monthly about how we are doing in each of these areas and we will be asking and answering questions about the specific actions and steps necessary to move the needle on each of these measures. Your individual Department/Functional managers will also be meeting with you regularly for similar discussion more specific to your area of work.
We believe that each and every one of you can have an impact through the work that you do here. Obviously, work in some areas may lend itself more to a focus on a particular one of these measures than on others. Your individual Department/Functional managers will talk with you about how you should focus your efforts and work - each and every day - in order to help us accomplish these things.
If we get there, if we reach the target(s) shown here (or better) on any or all of these measures, we are prepared to share that gain with you in the form of a cash award. Here is the award schedule ... or ... your direct supervisor will meet with you before the end of this week to provide details on your specific award opportunities and to answer any questions.
We are confident (or optimistic) that if we all pull together in the coming months, we can accomplish what is necessary. Please don't hesitate to contact me or any other member of the leadership team with your questions or comments.
Is your incentive plan positioned to maximize the partnership between your organization and its employees in the tough months ahead?
And if not, why not?
Image: Creative Commons Photo "Head of the Charles Regatta 2008" by Paul Keleher