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Beyend 401 small buisness owners - Jean D.

Jean.D Beyend 401 small buisness owners - Wiley & sons , 2004. - 274 p.
ISBN 0-471-27268
Download (direct link): beyond401korsmallbusinessowners2004.pdf
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Writing Your Compensation Plan
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Worksheet 2.2 Behaviors and Outcomes
1. List employee behaviors that are desired.
2. List employee behaviors that you want to discourage in the workplace.
3. List outcomes that you want to reward.
In our family, we rewarded our kids for doing their homework. It took us a while to figure out that if they did the homework every day, desirable grades would follow. So, think about whether you are asking for an outcome without rewarding the behavior that will produce that outcome.
The next step in designing your incentive compensation plan is to list the behaviors that you want to encourage. Then list the behaviors that you want to discourage. Finally, list the outcomes that you want to reward. Worksheet 2.2 can help you complete this task.
writing your compensation plan
The real benefit of writing your plan is getting the information out of your head and onto paper. This process helps you to be objective and to identify what is going on in your company.
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Why Have a Compensation Plan? Table 2.1 Benefits of Writing a Plan
It is inexpensive.
It gets your information on paper.
It provides an objective look at the data.
It allows you to examine alternatives.
It surfaces your assumptions.
It enables you to get feedback from others.
Writing a plan is easy to put off, but putting your plan on paper is critical. Planning is an inexpensive way to look at and test out alternatives before you spend any money. You may find it helpful to think of writing your plan as being sort of like following an exercise regimen. Although it is easy to put off the effort because the results are not immediate, the benefits are real (see Table 2.1).
A written plan can become a dust collector on your office bookshelf. Many times, business owners create a plan and then never look at it again. I highly recommend that you summarize your compensation plan on a couple of pages so you can easily refer to it (see Table 2.2).
Table 2.2 Benefits of Visualizing Your Plan
Using a visual framework helps you prioritize and focus. You can map out and compare alternative scenarios.
You can see connections and sequencing of actions. Deliverables and milestones become clear.
Using a Calendar Time Line
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A WRITTEN PLAN WILL HELP YOU BE CONSISTENT
Whatever you decide to do, it should be part of your plan and you should implement it consistently. Inconsistency or a failure to follow through will undermine the effectiveness of your incentive compensation plan in motivating employees.
USING A CALENDAR TIME LINE
I like to use a time line to visualize my plan. With the time line framework, I can see the next 12 months at a glance. On the calendar, you can map out the annual patterns of your business: busy periods, slow periods, and key events such as trade shows or delivery deadlines. Then you can map out when you can realistically focus on reviewing your compensation and benefits and developing a plan. Once you schedule it, you are much more likely to make it happen. This will encourage you to focus on your task, gather information, and make decisions. It will enable you to implement your decisions in a coordinated manner. Further, it gives you a clear picture of what is going on. Of course, things change as the year unfolds. If changes need to be made, you can make them in the context of the overall plan. You can use Worksheet 2.3 to start your calendar time line.
In summary, the writing process helps you get your ideas out on paper, surface your assumptions, and invite other people to review your ideas and assumptions and provide feedback.
Planning begins by taking stock of your current situation:
What is valued and rewarded in your company?
What do you currently offer to employees and how much does it cost?
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Why Have a Compensation Plan?
Worksheet 2.3 Plan Visual Calendar Timeline
AREA JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
B U S D A T E S
0 P E R A T 1 O N S
R E V I E W S P L A N
What Is Important to Employees?
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What is the level of employee participation in the current programs?
How do your compensation incentives and benefits compare with those of other employers?
What is working well?
What is not working well?
What behaviors do you want to encourage?
What behaviors do you want to discourage?
What outcomes do you want to reward?
NEXT, CREATE A VISUAL CALENDAR FRAMEWORK FOR YOUR PLANNING PROCESS
Mapping out your calendar lets you see your business year at a glance. With a visual framework, you can schedule your planning process as part of your business operations:
Map out the key events of your business year.
Map in a rough timetable for compensation and benefit review and planning.
With your planning framework, you can make some realistic choices about how you will develop your integrated compensation plan. Before you go too far into the specifics of your plan, try to get employee input.
WHAT IS IMPORTANT TO EMPLOYEES?
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