There is no such thing as the perfect compensation plan. The intent is to pay everyone a fair wage for their service to the company and also to incorporate additional incentives or "bonuses" along the way to inspire peak performance. This sounds easy in theory, but is extremely difficult to implement in reality. Every person is motivated differently and everyone has different expectations for how the plan should play out. Having learned a lot from previous experience, here are a few principles that Swift Straw will use to drive our 2016 comp plan:
1) A successful comp plan begins with education. Everyone must understand how the business makes money and how their specific efforts drive success. Once they understand how the business works, everyone is in a much better position to set
a goal or milestone that triggers additional compensation.
2) The plan needs to be set as a team goal. Everyone needs to track their individual efforts, but the team needs to rise and fall together.
3) Although it needs to be a stretch, everyone needs to have a say so there is no doubt that the plan is achievable if everyone works together. If everyone on the team does not have a say, continuous buy-in will be a struggle.
4) The individual key performance indicators (KPI's) and the tracking of the goal needs to be self-reported and circulated in a fish bowl by each member so there is no question where the team stands. No one in the company has the time to gather other people's data which makes self-reporting the easiest way to stay on track.
5) The plan cannot be subjective; it must be totally black and white. Once everyone agrees to the annual plan, there cannot be any deviation and there should be no questions along the way. The team must learn as everyone rises and falls together.
No one wants to feel like Chevy Chase waiting on the mail at Christmas wondering if they are going to get a large bonus check or an invitation to join the "Jelly Donut of the Month Club." I am extremely excited about working with our team on an inspirational 2016 comp plan and I am confident that the principle outlined above will guide our path towards a world-changing year.