COMPENSATION AND REWARDS

Don’t worry. I’m not going to go into much detail about this subject. Again, there are many books on the topic and consultants who know much, much more about the technical aspects of compensation and rewards systems than I do. The point that needs to be made here is that the single most important reason to reward people is to provide them with an incentive for doing what is best for the organization.

Yes, this sounds patently obvious, but somehow most companies’ compensation and rewards programs get divorced from this purpose, and take on a disconnected life of their own. When that happens, they lose their value and actually become sources of distraction rather than tools of focus and motivation.

Members of a leadership team must take responsibility for ensuring that compensation and rewards programs are simple, understandable, and, most important of all, clearly designed to remind employees what is most important. This is especially true at the executive level because the way that leaders themselves are rewarded and compensated will inevitably have an impact on how they motivate their people.