One of the main reasons for adopting the variable remuneration is linked to reward the efforts made to achieve a certain result.
All this effort in search of the result depends specifically on how the organization’s objectives are defined, that is an ill-defined by top management objective triggers an unfolding cascade that besides the negative financial effects changes the morale of employees as regards the ability to get results.
A good incentive compensation program allows organizations to maintain the balance between the achievement of planned results and motivation. To maintain this balance organizations should consider factors involving the motivational aspect and the financial aspect. These factors can be translated in the following items:
Construction of Strategic Planning and prepared where the average vision / long term does not exceed the capacity of the organization.
Translation of Strategic Planning in annual goals, with the purpose of seeking challenging goals that motivate all employees.
Disclosure of defined rules, “rules of the game” on the variable remuneration based on the achievement of results.
Promoting a healthy competitive environment through the evaluation of the results.
Resource allocation of managers in order to provide conditions for employees to search engine results.
All these factors are essential to promote a balance between achieving results and motivation, and a company is maintained with motivated people. This motivation in turn plays an important role in building a sustainable organization generating satisfactory results to stakeholders.
For Athila Machado – Director of New Business in Mereo Consulting.