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November 05, 2008
Incentive Plans Take a Hit in Economic Downturn
A new survey by Deloitte finds most companies expect their annual incentive plans to pay out below target. The survey examined what companies are doing to help their employees feel valued in a down economy.

The Deloitte survey, conducted among over 150 companies of various sizes and industries, found that just 41 percent of companies expect their annual incentive plans to pay out at or above target. Well over half (59 percent) expect a pay-out below target, including 11 percent who believe their incentive plan will not yield a bonus at all.

While 78 percent of respondents do not plan to change their current incentive plan, over half (53 percent) are planning to adjust next year's incentive plans because of current economic conditions.

According to the survey, companies are feeling the need to take steps to retain their valued employees during this difficult time. About 40 percent of respondents have already implemented a retention program, while one-third are taking a "wait and see" approach. Just 27 percent reported that they had no plans to adopt a retention program.

Deloitte notes that many companies "are implementing or expanding workforce programs that are designed to make balancing work and family easier," including flexible work schedules, telecommuting, and compressed work weeks. "While these programs won't put dollars in employees' pockets, they can go a long way toward helping employees view their company more favorably, making them less likely to leave," according to the survey.

For more information on the survey, "Retention Strategies During Difficult Economic Conditions", visit

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