55 Posts Found

A new study finds that revealing employee pay unexpectedly influences workplace dynamics in ways never demonstrated before.

Content: Article | Authors: Boris Maciejovsky, David Danelski | Source: Futurity.org | Subjects: Compensation, Human Resources, Management, Motivation, Organizational Behavior

While increasing bonuses and commission rates might seem like a good idea, doing so can inadvertently harm the quality of an organization’s workforce.

Content: Article | Authors: George Georgiadis, Henrique Castro-Pires | Source: Kellogg Insight | Subjects: Compensation, Hiring, Human Resources, Motivation

When appropriate, pay the best middle managers even more than your senior leaders to show how much you value them. If you hear complaints from the executives, make up the difference in equity. Compensation should be commensurate with the value a role creates.

Content: Quotation | Authors: Bill Schaninger, Bryan Hancock, Emily Field | Source: McKinsey Quarterly | Subjects: Compensation, Human Resources, Organizational Behavior

Why do bonuses sometimes backfire? It’s because each incentive design choice both signals information about your own beliefs and intentions as an employer and shapes the signaling value of employee behavior within the organization. If you don’t think through these signals carefully, you may end up approving a bonus scheme with results that are the opposite of what you intend. This article offers a way … [ Read more ]

Content: Article | Authors: Dirk Sliwka, Timo Vogelsang | Source: Harvard Business Review | Subjects: Compensation, Human Resources, Management, Motivation, Organizational Behavior

We know that educational credentials help predict salary. We know that gender and race help predict salary, even though they shouldn’t. We know that years of service, or seniority, helps predict salary, and there’s some evidence to suggest that years of service is one of the more important predictors of salary.

Gender, race, years of service, and educational credentials all have nothing to do with performance. … [ Read more ]

Content: Quotation | Author: Jeffrey Pfeffer | Source: McKinsey Quarterly | Subjects: Compensation, Human Resources, Organizational Behavior

Answering these questions will help you determine what’s working, what isn’t and explore options for a successful compensation strategy.

Content: Article | Author: Kent Plunkett | Source: Chief Executive | Subjects: Compensation, Human Resources

Dangling bonuses to checked-out employees might only be a Band-Aid solution. Brian Hall shares four research-based incentive strategies—and three perils to avoid—for leaders trying to engage the post-pandemic workforce.

Content: Article | Authors: Avery Forman, Brian Hall | Source: Harvard Business School (HBS) Working Knowledge | Subjects: Compensation, Human Resources, Motivation

Companies often have a hard time determining how motivated or committed their employees are, because employees know it goes against their own interests to declare themselves unmotivated or uncommitted. The solution to this problem is for companies to put incentives in place that encourage employees to reveal how they actually feel. In this article, the author, a behavioral economist, describes an incentive plan that has … [ Read more ]

Content: Article | Author: Uri Gneezy | Source: Harvard Business Review | Subjects: Compensation, Human Resources, Organizational Behavior

The consensus in social psychology is that monetary incentives for performance have a detrimental impact on individual performance. Yes, under certain specific and limited conditions, rewards can reduce performance. Yet pay for performance schemes are ubiquitous. How can we resolve this divergence between theoretical recommendations and observed practices? Nirmalya Kumar and Madan Pillutla recommend solving the problem by designing smarter incentives that avoid these detrimental … [ Read more ]

Content: Article | Authors: Madan Pillutla, Nirmalya Kumar | Source: Management and Business Review (MBR) | Subjects: Compensation, Human Resources, Motivation, Organizational Behavior

In order to understand the undermining effects of rewards, we must consider how the recipients are likely to interpret them. Specifically, the effects of a reward depend on how it affects the recipient’s perceptions of autonomy and competence. When monetary incentives interfere with an individual’s sense of autonomy or competence, they tend to decrease intrinsic motivation.

Content: Quotation | Authors: Madan Pillutla, Nirmalya Kumar | Source: Management and Business Review (MBR) | Subjects: Compensation, Human Resources, Motivation, Organizational Behavior

In most firms, incentives are tied to company or business unit performance. The consequences of large investment decisions typically take too long to materialize to have an impact on an executive’s bonus or promotion. This can lead to moral hazard, especially when managers expect to move on after a couple of years in a position.

We recommend tying personal targets and incentives to the success of … [ Read more ]

Content: Quotation | Authors: Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Accountability, Compensation, Human Resources, Organizational Behavior

The exclusive focus on monetary rewards inevitably leaves organizations fighting a fierce but losing struggle to balance individual and team results. Rewarding high performers serves the imperatives of accountability and excellence but can undermine alignment and cooperation among team members. Yet basing pay on team results in order to incentivize collaboration often ends up inadvertently rewarding subpar individual performance and penalizing individual excellence. Neither approach … [ Read more ]

Content: Quotation | Authors: Fred Kofman, Sally Helgesen | Source: strategy+business | Subjects: Compensation, Human Resources, Motivation, Organizational Behavior, Teamwork

In my company, there is a rule that all new managers need to know: that it’s not a given that their people [under them] will be paid less than they are. That’s part of becoming a manager—that you really have to enjoy enabling people. I want people who are good managers to be managers. I don’t want people to become managers just because they feel … [ Read more ]

Content: Quotation | Author: Selina Lo | Source: strategy+business | Subjects: Compensation, Human Resources, Management

A new study published in Nature Human Behaviour sheds light on the role of within-job pay differences in the gender pay gap.

Content: Article | Authors: Halil Sabanci, Marta Elvira, Paula Apascaritei | Source: IESE Insight | Subjects: Compensation, Diversity, Human Resources, Organizational Behavior, Women in Business

You get the behavior that your comp plan designs for. In the early days, I prefer to keep comp plans simple with two metrics, max. I also love plans that have a component focused on the entire customer lifecycle. For example, comping teams on bookings and retention can be a powerful way to ensure teams pursue the right users who will be longtime customers.

Content: Quotation | Source: First Round Review | Subjects: Compensation, Customer Related, Human Resources

In an unprecedented time for attracting and retaining talent, CEOs and CHROs are getting creative—from three-day workweeks at full-time status to paid mental-health days to raised wages. Here’s what a dozen leaders told us they are doing differently.

Content: Article | Author: Dale Buss | Source: Chief Executive | Subjects: Compensation, Human Resources

You always want to compensate your reps based on what they can actually control. You want to tie as much of people’s compensation as you can to things like “meetings set” or “demos given” — actual activities. When you’re at a startup, it’s hard to figure out what your quotas should be — there’s usually no precedent, so you throw a number out there, and … [ Read more ]

Content: Quotation | Author: Don Otvos | Source: First Round Review | Subjects: Compensation, Human Resources, Marketing / Sales

Companies who say they care about inclusion and belonging can start by paying employees fairly. To start, initiate a pay equity audit in which you compare the pay of employees doing “like for like” work (accounting for reasonable differentials, such as work experience, credentials and job performance) and investigate the causes of any pay differences that cannot be justified. Next, determine how you’ll remediate … [ Read more ]

Content: Article | Author: Amii Barnard-Bahn | Source: Harvard Business Review | Subjects: Compensation, Diversity, Human Resources

Here’s how to do salary transparency right.

Content: Quotation | Author: Etelka Lehoczky | Source: Inc. Magazine | Subjects: Compensation, Human Resources, Organizational Behavior

A company’s most powerful cultural signals aren’t communicated by talking points. They’re determined by who gets promoted and who receives outsized rewards. Yet compensation and bonus frameworks in most organizations are still based almost solely upon financial results. In an effort to rule out subjectivity, such plans emphasize — and often focus exclusively on — achieving numerical targets. This oversimplified focus on the what of … [ Read more ]

Content: Quotation | Authors: Adam Bryant, David Reimer | Source: strategy+business | Subjects: Compensation, Human Resources, Organizational Behavior