“Culture of Excellence” – that’s a term I use when I see a company whose employees are not only motivated, but they expect their peers to be as well.
Compensation plans play an extremely important role in cultivating the “Culture of Excellence”.
A properly constructed compensation plan encourages and rewards employee behavior that is good for the company, i.e. behavior that contributes in some way to the company’s ability to make profit.
Properly constructed compensation plans:
- Formally define how your employees get paid
- Keep all of the employees aligned toward the same company objectives
- Motivate employees to go “over and above” company objectives, and reward those who do
- Create an environment that makes it difficult for non-performing employees to hide
Improperly constructed (or missing) compensation plans can create the opposite effect, resulting in:
- Employees working toward different goals
- Lower sales
- Lower quality of work
- Poor morale and infighting among employees
- Non-performing employees getting lost in the weeds
- Loss of your best employees
- Loss of your customers
In this members-only post I review:
- What is a Compensation Plan, And What Does It Do?
- How To Make The Most Effective Compensation Plans
- The Problem With Most Sales Representative Base Pay / Commission Structure Compensation Plans In a Service Organization
- The Problem With Engineering Compensation Plans That Focus On Billable Time