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March 27, 2010
Mistakes Involving Unrealistic Organizational Incentives

Dan Kleinman discusses common incentive-related mistakes in a BLR webinar entitled ‘Incentive Pay: Best Practices for Designing and Managing Pay-for-Performance Plans’. He states that another sure-fire death for incentive pay plans is any obstacle that makes an organization’s workers feel that they have no real chance of hitting their performance goals and winning the incentives. These include forces outside their control such as the lack of needed equipment that will prevent them from hitting their targets, or if employees feel they are already working as hard as they can.

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Organizations should note the following points about incentives that are unrealistic:

  • When an organization sets incentive plans, brainstorm in advance about any possible obstacles such as budget restraints, equipment shortages or supply shortages that might be negative for employees going after their performance goals
  • The organization should try to remove these obstacles, if possible
  • The organization can also keep eyes and ears open for these types of complaints and do what it can to remove the issues

Dan Kleinman is the principal of Dan Kleinman Consulting (, a California-based compensation and human resource consulting firm. He has served as an independent consultant for a broad spectrum of regional, national, and international companies, providing compensation, performance, organizational planning, and reward-system design services. He can be reached at

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