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March 25, 2010
10 Key Steps for Managing Incentive Pay Plans in Your Organization

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 and provides the following key steps that organizations should consider:

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  • Step # 1: Identify specific goals for your incentive pay programs
  • Step # 2: Put your incentive pay plan in writing
  • Step # 3: When times are tough, keep incentives as simple as possible
  • Step # 4: Pick the incentives that will motivate your employees the most
  • Step # 5: Communicate your incentive plans early, often, and fully
  • Step # 6: Don’t delay awarding the incentive pay once it’s earned
  • Step # 7: Make sure your incentives reward and change behavior
  • Step # 8: Find ways to measure the ROI of your incentives
  • Step # 9: Resist the temptation to cut incentives if the economy gets worse
  • Step # 10: “Sunset” your incentive plans – and give notice if you make changes

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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