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