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March 25, 2010
Keeping Pay Incentives Simple When Times are Tough

In a BLR webinar entitled ‘Incentive Pay: Best Practices for Designing and Managing Pay-for-Performance Plans’, Dan Kleinman explains why it is important to manage incentive pay plans in the organization. He states that one step towards managing incentive pay programs in your organization is to keep incentives simple when times are tough. This incentive management step includes the following points:

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  • Avoid the temptation to unveil a multiple-step, multiple-tier incentive pay program that may be more confusing than motivating
  • Keep it as simple as possible. If it takes your workers too long to figure out how to qualify for rewards, their enthusiasm level could drop accordingly
  • At the same time, you should try to balance the different incentive needs and expectations of workers at all levels within your organization
  • If needed, you may need to account for regional differences (if you have far-flung workplace locations) and for demographic differences (e.g. baby boomers compared to Generation Ys)
  • Just do your best to make your incentive pay programs very easy to grasp

Dan Kleinman is the principal of Dan Kleinman Consulting, a California-based compensation and human resource consulting firm. He can be reached at

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