VisionLink Blog

Ken Gibson

Compensation–It’s about Partnership, not Motivation

Companies that struggle with building effective compensation strategies are often ascribing an unrealistic expectation to their rewards programs.  They want compensation to be a motivation tool; one that will impact behavior  and create change.  They are often disappointed when they don’t see quantum leaps in performance and productivity.  They subsequently label the latest incentive plan attempt “dead on arrival” and begin cursing the “compensation gods.”

What these companies don’t often recognize is that their attempt at motivation came across as manipulation to their employees.  It’s a fine line, and it is easily crossed.   Premier talent has an intrinsic sense of purpose and recognizes the value it brings to the table.  These individuals are motivated by mission and opportunity, not by financial rewards. As a result, they are not relying on a compensation program to trigger their passion.  However, they are looking  for a sense of partnership–and the company’s compensation programs become a  key validator of that message.  You see, partnership is linked to opportunity–and that is motivating to the kind of people most companies want to attract. 

Partnership is more than pay, but pay is a key component of partnership if it is given the right frame of reference.  Compensation needs to be viewed as a means of creating a unified financial vision for growing the business.  It is built in parallel with the vision, mission and strategy of the organization.  It is an extension of the business plan and defines the financial parameters of the partnership relationship the company has with its key people. 

Companies that embrace the partnership concept understand the critical nature of having a compensation philosophy statement.  That written document defines what the company pays for.  It communicate the balance the business seeks to strike between guaranteed versus at risk compensation, and short-term versus long-term rewards.  It ties short and long-term incentives to the concept of good versus bad profits, and uses the compensation construct to encourage more of the former and less of the latter.  Such definitions are critical ingredients of a sound financial partnership and offer insight to the parties involved into the best means of fulfilling the partnership’s potential.

A foundational philosophy statement provides a lauching pad for examining the components of pay that should be included in defining the partnership relationship the company wishes to have with its best people.  Salary, short-term incentives, long-term incentives, equity, phantom equity, health and welfare plans, retirement benefits and executive benefits are all weighed and evaluated in the context of partnership.  “What plans will drive performance, increase shareholder value, and meet the cash and wealth accumulation objectives of our most critical partners–our employees?”

When a company begins to think and act in these terms, it will turn the corner in its understanding of the power of compensation to be transformational in its impact.

So…when you think about compensation, think parternship, not motivation.

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CLIENT SUCCESS STORIES

"VisionLink has helped us successfully navigate a number of complex issues regarding our rewards programs. It has dealt with all facets of these varied issues with a high degree of competence, integrity, and straight forward advice. VisionLink's experienced team has consistently delivered first class results in a timely, professional manner and has become a valued Storm partner."

Thomas K. Grzywacz
President/Chief Executive Officer
Storm Industries, Inc.

"VisionLink has helped us successfully engineer a long-term incentive plan that has empowered our company to reward and retain key talent while increasing shareholder value. The knowledge, patience and deep experience of its team members helped us navigate a road that was unfamiliar to us. Ultimately, VisionLink designed a plan that met the high standards of both stockholders and key management employees. We have further engaged VisionLink to address our business succession and transition planning needs."

Reggie Dupre'
Chief Executive Officer
Dupre Logistics

"Over the past several years, National Technical Systems has engaged VisionLink to provide insight and direction on a number of executive compensation issues, as well as a performance evaluation of our 401(k) plan. Under its direction, NTS completely revamped executive level rewards to align with our business growth objectives and the strategic plan of the company. VisionLink's insight and direction have been invaluable. NTS has achieved its growth objectives and our executives feel appropriately rewarded for their performance."

Bill McGinnis
President/Chief Executive Officer
National Technical Systems

"VisionLink arrived on the scene just in time for us. We needed a new framework for our short-term and long-term incentive plans. VisionLink's modeling and forecasting process broadened our horizons and expanded our view of how to use a good incentive system to build, retain and strengthen our senior management team. We remain impressed by their expertise, professionalism and great service."

James Keng
Chairman
Jimway, Inc.

"Our firm has had a long-term incentive plan for over eight years but we never quite felt like it was firing on all cylinders. We hired VisionLink to re-energize our plan, and they did it! We now have a cohesive awards strategy that's fair to shareholders and valued by our employees. VisionLink's team is technically skilled and very creative. We're happy to recommend VisionLink to firms looking to upgrade their management incentive programs."

John M
FTO Inc.

"Our company was like VisionLink's typical clients. We were great at sales and haphazard at how we compensated our people. VisionLink's process brings great clarity and confidence to our growth planning - and makes compensation a great growth capability."

Dan Sullivan
Founder and President
Strategic Coach ©

"The team at VisionLink helped our company structure a long-term incentive plan that parallels the company's strategy for continued growth as a global market leader within our industry. Their approach resulted in a program that our corporate team and executives embraced on both a professional and personal basis. Through VisionLink's guidance and execution, we were able to create both a motivational tool for current team members and a recruiting device to attract future executive level associates. Well done!"

Mark Rhoades
President
Fluidmaster, Inc.

"As a leading direct seller of scrapbook photo albums and supplies, Creative Memories has independent consultants across the country. And for over six years now, VisionLink has helped us to stay connected and administer a voluntary 409A non-qualified plan for them. VisionLink has provided support for all aspects of our plan from notification of eligibility through registration and distribution. The VisionLink support team has offered suggestions for improving processes and provided us with outstanding service year after year."

Guy Walker
President
Creative Memories North America

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