Linking Rewards to Linking Rewards to StrategyStrategyBy R. Henry MiglioreBy R. Henry Migliore
Tying Appraisals to RewardsTying Appraisals to Rewards How we usually reward peopleHow we usually reward people What is wrong with present What is wrong with present
approachapproach Poor targetsPoor targets Emphasis on the formEmphasis on the form Too complicatedToo complicated Lack of trainingLack of training Understand basicsUnderstand basics
Potential if done correctlyPotential if done correctly
Strategic Planning ProcessStrategic Planning Process Define Strategic PlanDefine Strategic Plan Show where the reward fitsShow where the reward fits Planning must have product and Planning must have product and
processprocess Planning must be done right for Planning must be done right for
evaluation, performance evaluation, performance appraisal, and rewards to workappraisal, and rewards to work
Strategic Planning ProcessStrategic Planning Process Performance appraisal and Performance appraisal and
rewards usually come lastrewards usually come last Organization structure impact Organization structure impact
on success and performance on success and performance measurementmeasurement
Strategic Long-Range Planning ProcessStrategic Long-Range Planning Process
Theory Behind Reward SystemsTheory Behind Reward Systems
Higher level needs/intrinsicHigher level needs/intrinsic Pay for performance/extrinsicPay for performance/extrinsic Must have bothMust have both
Emphasis on individual and teamEmphasis on individual and team Regular reviewsRegular reviews
Athletic TeamAthletic Team Business TeamBusiness Team
Reward OpportunitiesReward Opportunities
Performance Appraisal FormPerformance Appraisal Form
Reward OpportunitiesReward Opportunities Athletic teamAthletic team
Baseball Baseball win 20 gameswin 20 games Go to World SeriesGo to World Series
FootballFootball rush 1000 yardsrush 1000 yards Go to Super BowlGo to Super Bowl
Business UnitBusiness Unit SalesSales
Meet marketing objectives and ROI best in last Meet marketing objectives and ROI best in last 5 years5 years
ManufacturingManufacturing Increase production 15% and ROI best in last Increase production 15% and ROI best in last
5 years5 years
Reward as a team playerReward as a team player Golden handcuffsGolden handcuffs Bonus paid over longer termBonus paid over longer term Share equally?Share equally? Boss EvaluationBoss Evaluation
Benefits of Reward SystemsBenefits of Reward Systems The organization will determine The organization will determine
where it is goingwhere it is going It will be able to identify It will be able to identify
opportunities and riskopportunities and risk All organization members will be All organization members will be
forced into a consensus as the forced into a consensus as the direction for the organization is direction for the organization is identifiedidentified
As managers have the opportunity to As managers have the opportunity to have input into the planning process, have input into the planning process, they will experience a surge of they will experience a surge of excitementexcitement
Benefits of Reward SystemsBenefits of Reward Systems Communication in all directions will Communication in all directions will
be instantly improvedbe instantly improved Non-productive persons will fall by Non-productive persons will fall by
the waysidethe wayside Increases should be expected in all Increases should be expected in all
measurable areas – profitability, measurable areas – profitability, productivity, and so onproductivity, and so on
Within a year, a personal training Within a year, a personal training and development plan will evolve for and development plan will evolve for all persons in the organizationall persons in the organization
Rules for CompensationRules for Compensation Salary administration should be Salary administration should be
centered around accountability, not centered around accountability, not activityactivity
Write job objectives instead of job Write job objectives instead of job descriptionsdescriptions
People who are committed to your People who are committed to your organization are worth more than organization are worth more than people who are not committed to itpeople who are not committed to it
People who feel they are underpaid People who feel they are underpaid will behave like unpaid employeeswill behave like unpaid employees
Rules for CompensationRules for Compensation People who aren’t meeting all of People who aren’t meeting all of
their regular, ongoing, and recurring their regular, ongoing, and recurring responsibilities should not be given responsibilities should not be given merit increasesmerit increases
Bonuses should be paid only for Bonuses should be paid only for beating an indicatorbeating an indicator
Fair pay does not motivate, but Fair pay does not motivate, but unfair pay demotivatesunfair pay demotivates
The higher the person is in the The higher the person is in the organization, the more you pay for organization, the more you pay for strategies and creative thinkingstrategies and creative thinking
Opportunities For Any OrganizationOpportunities For Any Organization
Strategic Planning emphasis for Strategic Planning emphasis for Consulting DivisionConsulting Division
Information systems supports Information systems supports planning systemplanning system
Provides performance Provides performance appraisal/reward serviceappraisal/reward service
Information system supports Information system supports performance appraisalperformance appraisal
Strengthens SERVICE to clientsStrengthens SERVICE to clients Cost leadership, focus differentiationCost leadership, focus differentiation
DiscussionDiscussion