WorldatWork association and member news
WorldatWork Members Left to Right: Wayne Hancock, CCP; Grace Ochoa; Brenda Lister Debbie Terry, CCP, CBP, GRP; Katharin Casillas, CCP; Jung Jeon Tracy Kofski, CCP; Lise Labin-Dugal; Victoria Gaskin-Wyatt the buzz The following is an excerpt from the WorldatWork Pay for Performance Bulletin Board. To join the discussion, go to the “Networking” section of www.worldatwork.org. Q: Our past bonus programs were split between profit and individual objectives.The profit portion was tied to a corporate target to trigger payment.The individual portion is paid based on completion of individual goals. Due to difficult markets, the program was changed for the current fiscal year, tying the entire bonus to the corporate target (profit and individual objectives).The good news is that three of the four regions have exceeded their regional profit targets, but when you add in the fourth region and corporate, the overall does not meet the corporate target to trigger payment.This means if we stick to the program no one gets a bonus, and I anticipate huge morale issues because of it. Here are the options I see: 1. Stick to the program and do your best to deal with the employee morale issues from the regions that exceeded target. 2. Offer discretionary bonuses and, if so, how do you determine how this is done? 3. Change the program and allow the payment for individual goals for those regions that exceeded target. Any feedback would be greatly appreciated! RE: Bonus programs tied to corporate target to trigger payment — The design of the plan does not look like it’s being aligned with the company pay philosophy. It might be a sign that you should review the plan and improve the “line-of-sight dimension.” Changing the rule will communicate that the designers of the plan were not anticipating the possible consequences of their design — one failing region could get the entire company to fail. The original message was: Company profit threshold has to be met to make any bonus payment. Are you that sure that you should not simply apply the design and pay no bonus? After all, employees (I hope) have been informed of the design. They may understand the outcome. Then, it would be possible to change the design, for next year, knowing the consequences, and making all employees really aware of the possible outputs. RE: Bonus programs tied to corporate target to trigger payment — When bonus plans are designed with a corporate financial trigger it is usually done to ensure affordability of the plan payout. It is unfortunate that some parts of your organization have met their goals while others have not, but affordability is a major issue in plan design. I’m sure that the potential employee relations issues were considered before the plan was designed this way. If not, and employee relations and motivation are major issues that supersede affordability and profit margins, you should redesign your plan’s payout formula. RE: Bonus programs tied to corporate target to trigger payment — The affordability of payments is an important consideration; so is employee morale. While your original design may have a flaw, the results have freed you to address the remaining issues in a discretionary fashion. See if there is money available to pay discretionary bonuses. If none is available, you are done. If you have some money, though, you can allocate it under a different scheme. Pay nothing to the division that dragged the whole company down, but pick out the top performers in the divisions that made it and pay them something. WorldatWork is not engaged, directly or by implication, in rendering legal, accounting or other related professional services. The views expressed on Bulletin Boards are those of the participant and should not be ascribed to the officers, members or other sponsors of WorldatWork or its staff. members on the move Ritu Koppula has joined Kaiser Permanente, Oakland, Calif., as a compensation consultant. Tammi L. Cross, CCP, SPHR, has joined Data Exchange Corp. in Lockbourne, Ohio, as the manager of human resources. Jacqui Demrose, SPHR, has joined Esterline/Korry Electronics in Seattle as senior compensation analyst. Anthony Riani has joined T-Mobile USA as manager of compensation, in Bellevue, Wash. Christopher Kelley has launched a new firm called HR Analytic Services LLC, located in Sycamore, Ill. Lois Naftzger, CCP, GRP, SPHR, has joined Washington Group International in Idaho as group insurance services manager. Philip C. Beckhelm, CCP, has joined the staff of D. Hilton Associates Inc. as vice president in the firm’s human resources practice in The Woodlands, Texas. Read more Members on the Move in the “Networking” section of www.worldatwork.org. did you know? Alliance for Work-Life Progress (AWLP) is now accepting applications for the 2006 Innovative Excellence Awards. The annual award recognizes organizations that create outstanding work-life effectiveness programs and polices that enrich the lives of employees while achieving organizational goals. Go to www.awlp.org to download an award application and to learn more about this prestigious distinction. Deadline to enter is Sept. 16.