Designing for Results

This intermediate-level course presents the fundamentals of variable pay. The course focuses on compensation strategy and variable pay, definitions and the design and implementation of incentive, recognition and bonus plans.

• Learn about the three categories of variable pay.
• Identify common business strategies and objectives for achieving them.
• Examine internal and external factors.
• Discuss the activities for designing the structure of the plan.
• Find out aspects to consider in establishing target performance and payouts.
• Learn about funding and distribution of plan earnings.
• Discover how to implement, communicate and evaluate the success of your plan.

Who Should Attend
Course C12 is designed for HR professionals responsible for designing, assessing or maintaining variable pay programs.

What You Will Learn

Total Rewards and Variable Pay

• Elements of compensation
• Categories of variable pay

Supporting Business Objectives through Variable Pay

• Business strategy
• Business strategy drives business objectives
• Business lifecycle
• Variable pay helps achieve business objectives

Types of Variable Pay

• Incentive plans
  • Short-term incentive plans
    • Profit-sharing plans
    • Performance-sharing plans
    • Individual performancebased plans
  • Long-term incentive plans
    • Equity- and nonequitybased plans
• Bonus plans
  • Referral
  • Hiring (sign-on) bonus
  • Retention (stay) bonus
  • Project completion bonus
• Recognition plans
  • Spot awards
  • Managerial recognition
  • Nominations
  • Organizationwide recognition

Developing a Variable Pay Plan — Phases 1 and 2

• Phase 1: Pre-Design
  • Considering internal and external factors
  • Obtaining management support
  • Identifying the design team
• Phase 2: Design
  • Determining plan objectives and plan type
  • Defining eligibility
  • Selecting performance measures

Developing a Variable Pay Plan — Phase 3

• Phase 3: Funding and distribution
  • Determining performance targets and payouts
  • Funding the plan
  • Distributing plan earnings
• Final approval

Implementation and Evaluation

• Plan implementation
  • Selecting the implementation team
  • Developing the communication plan
  • Introducing the plan
  • Coordinating plan administration
• Plan evaluation
  • Determining plan effectiveness
  • Why plans fail
  • Potential evaluation outcomes