Here are some ways to ensure that comp plans fulfill strategic operational objectives while cultivating an engaging organizational culture:

Don't go solo: Work with executive stakeholders to get a deeper insight into your organization's strategic and operational objectives so you can devise a plan focused on measuring and incentivizing performance that will actually support your vision, mission, and values.
Communicate effectively: Employees will have a harder time aligning their behaviors if they do not understand the company's raison d'être (reason for being). Leaders must transparently communicate the strategic and operational objectives at all levels of the organization as well as the steps that need to be taken to achieve them. Results should be communicated clearly, too.
Provide constant feedback: Don't wait until the end of the year to update employees on the progress made and the milestones achieved. A compensation system falters if people feel their efforts are trivialized or taken for granted. Regular updates give team members a better sense of their performance, help keep them on track, and make them feel respected and recognized.
Share success stories: When deemed appropriate, leaders should highlight a team's or an individual's efforts and accomplishments to the largest possible audience as it encourages collaboration and helps clarify organizational goals and values. However, praise should suit a person's preference. While some individuals enjoy public attention, others prefer a more low-key acknowledgment.
Link strategy to operations: Introduce a comprehensive and integrated management system that links strategy formulation and planning with operational execution. Use operational objectives for short-term compensation awards and strategic goals for longer-term ones.
Define meaningful metrics: A comp plan must be agile and flexible to make it meaningful to the individual. Employees perform better if they are faced with something actionable. In general, if a metric measures impact, clearly indicates one's performance, and can help make more informed decisions, then it is a meaningful thing to measure. Involve employees in the process of setting performance metrics when felt necessary. Also, incorporate team and corporate goals and balance those with individual metrics.

2. Compensation plans should help retain and recruit top talent while shaping the organizational culture

Nearly 70% of employees of all generations agree that inadequate pay is the top factor motivating them to leave their jobs. Now with competition for talent intensifying, every company needs a standout compensation plan to organize and strategize how they will attract and retain top talent.

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How to maximize the value of your compensation programs

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