VisionLink Blog

By Ken Gibson

December 07, 2017

How Do You Measure ROI on Compensation?


Return on investment.  How often is that term spoken of in business?  It's what shareholders expect.  It's what CEOs are paid to achieve.  Yet, when it comes to pay, ROI is seldom referenced.  As a result, rewards programs are not typically held to account for their contribution to shareholder value and business growth in the same way other corporate investments are measured.  Well, we live in a business age where that lack of accountability isn't acceptable anymore.  So, let's talk about one way you can get a better handle on the ROI on compensation your company is generating.

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By Ken Gibson

July 25, 2017

A High Performance Culture Starts with a Clear Performance Framework


Most business leaders are in constant search of higher performance. They set targets for...well...pretty much everything, in the hope of raising the commitment and engagement level of their employees.  They try to recruit the best talent available.  They upgrade their technology to create greater efficiency and productivity.  They institute training programs and provide a physical environment that they hope will encourage innovation and creativity.  They provide flexible work schedules and a multitude of perks to ensure their people have every opportunity to excel in their roles.  However, too often those efforts fall short because they don’t construct the proper framework to hold all of those pieces together. 

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By Ken Gibson

July 07, 2017

Pay Strategy Fundamentals: 5 Critical Compensation Questions


Pay can either be an asset or a liability to a company.  Stated another way, it can either drive growth or hinder it-- fuel performance or diminish it.  Is that placing too big a burden on compensation to produce results?  I don't think so.  In fact, my experience and observation has been that most businesses don't set high enough strategic expectations for their rewards programs.  The evidence is they don't involve compensation in other strategy-related discussions.  The result is there is little to no link established between pay and the key success measures the company needs to reach.

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By Ken Gibson

June 01, 2017

How Do You Measure Compensation Strategy Success?


When principals of our firm first meet with prospective clients, we are often asked something like this: "What results have your compensation plans  produced for your clients?"  In asking that question, they are hoping we’ll tell them our clients achieved a surge in profitability or revenue, or some other common measure of business success.  While that seems like a logical question and response, in truth both miss the mark.  You cannot draw a straight line from the pay programs in which employees participate to the results a business achieves.  The better question is: "How do you measure the success of a compensation strategy?" or "What determines a successful pay plan?"  Let me explain the distinction I'm trying to make.

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By Ken Gibson

April 03, 2017

VisionLink: What We Believe, Where We’re Headed & Why it Matters


It’s not typical that I use this space to talk about The VisionLink Advisory Group directly—except in reference to learnings we’ve gained in our work with client companies.  But I thought it both relevant and important that I shed some light on our firm’s core beliefs, purpose and vision for a couple of reasons.  First, I think doing so will give you some context for what I write about each week in this space.  Second, I happen to think the work we do is significant and has a real impact on the businesses we serve as well as those affected by their success.  So here it goes. 

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By Ken Gibson

September 01, 2016

How CEOs Can Measure their ROI on Compensation


Return on investment.  How often is that term spoken of in business?  It's what shareholders expect.  It's what CEOs are paid to achieve.  Yet, when it comes to pay, ROI is seldom referenced.  As a result, rewards programs are not typically held to account for their contribution to shareholder value and business growth in the same way other corporate investments are measured.  Well, we live in a business age where that lack of accountability isn't acceptable anymore.  So, let's talk about one way a chief executive can get a better handle on the ROI on compensation his company is generating.

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By Ken Gibson

June 24, 2016

How Effective CEOs Build a Performance Culture


If you are the CEO of a business, it is likely you see a gap between the company performance you want and the performance your organization is experiencing.  If that is not true, there’s no need to read any further.  However, if that is true, it’s probable you are very frustrated.  Perhaps you feel as though you are pressing on the gas pedal while those around you have their foot on the brakes.  However, as a smart business leader you also recognize that if performance isn’t where you want it, the buck stops with you.  So let’s talk about what successful CEOs do to create and sustain a performance culture.

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By Ken Gibson

July 10, 2015

Pay Plan Operations Ensure Your Compensation Strategies Succeed


Too many good pay strategies fail because there is no cohesive operational plan holding them together. They are designed, announced and then revisited when someone in leadership asks the question, "Now why do we have this plan and what kind of results is it generating for us?" Often it's human resources that is asked to answer for a given rewards program, even though the plan might have been initiated by the CEO, CFO or owner of the company. Many times the problem isn't the plan itself (although some "tweeking" may be needed). It's just that there are no are no operational underpinnings to ensure the collection of rewards plans work as a unit and drive the outcomes they're intended to produce.

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By Ken Gibson

June 23, 2015

What Kind of Annual Incentive Plan Do Most Private Companies Use?


The leaders of most organizations look for some means of validating their approach to the type of incentive plan they put in place--or whether to even have a value-sharing arrangement at all  For such chief executives and others with responsibility for variable pay plans, data is a useful tool.  It can, however, also be a dangerous one. The value of data is that it gives a picture of what the market is doing; how others are addressing key compensation issues with which most businesses grapple. The danger comes when organizations put too much weight on what the data indicates and then simply try to mirror what others are doing. 

Let's deal with each of these issues one at a time.

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By Ken Gibson

June 17, 2015

"What is World-Class Compensation...and How Do I Achieve It?"


Most leaders of growth-oriented companies have large ambition. They are not looking for incremental change. They are seeking breakthrough results.  If you sit in meetings with these CEOs, you won’t hear things like: “Well, let’s look closely at our competition and see if we can mirror what they are doing, but maybe just a little better.” The idea is laughable. Instead they communicate and demonstrate an insatiable curiosity about what’s possible and where they want to take the company in the future.

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By Ken Gibson

June 12, 2015

Annual Incentive Plans: The 3 Most Common Mistakes


Many, if not most, organizations have some kind of annual incentive plan. Unfortunately, a majority of them are not happy with it. Often, our phone rings when an organization can't take it anymore and wants help with its plan. When it does, we typically hear one or more of the following complaints:

  • "Our bonus plan has become an entitlement--people just expect it."
  • "Our incentive program isn't structured properly--we're paying out benefits when we aren't even profitable."
  • "Our plan is completely discretionary. I go into the closet at the end of the year and try to determine how much of our profit to share, who should get a payout and how much they should receive. There's got to be a better way."
  • "Our short-term incentive plan has become too complicated. We have too many metrics and people are confused."
  • "Our employees don't understand what they need to do to maximize the payout from their plan--and then they complain about how much they get."

 

 

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By Ken Gibson

April 24, 2015

Increase Shareholder Value by Sharing Value


A common concern of business leaders about making increases in compensation is affordability. This is especially true of incentive plans. The assumption is that "costs" will go up if an annual bonus or some type of long-term program such as phantom stock or a profit pool is added--and there's no room in the budget for that kind of increase. It's not an unreasonable response. However, it's rooted in an incorrect premise. Let's look at it from a more enlightened perspective.

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By Ken Gibson

April 17, 2015

5 Pay Practices of Successful, Growth-Oriented, Private Companies


If you lead an ambitious private company, you likely struggle with some part of your pay strategy. Maybe you're comfortable with your salary structure, but your annual bonus is ineffective. Or perhaps you've delegated the formation of your compensation approach to human resources--and are not feeling like it's headed in the right direction. It could be you feel your overall pay structure is solid enough but it's not helping you attract the kind of talent you're trying bring in.

In short, you don't feel there's alignment between compensation and the business model and strategy of the company. As a result, you're feeling some pain.

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By Ken Gibson

January 30, 2015

Line of Sight Improves Accountability


Discussions about accountability in an organization sometimes (often?) minimize the impact of pay on performance. In part, this stems from notions popularized in writings such as Daniel Pink's Drive which posit that incentive rewards don't really "work" and that all motivation is really intrinsic. Therefore, if you pay people "fairly," and get out of their way, everything will work out--accountability will kind of take care of itself. I'm oversimplifying, but you get the idea.

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By Ken Gibson

January 21, 2015

Can Pay Improve Accountability?



One of the biggest barriers to growth most businesses experience is lack of accountability. CEOs want a workforce that adopts a stewardship approach to their roles, but often come up short and are frustrated. As a result, many find themselves in a quandary when it comes to paying bonuses or other incentives."If I a pay a bonus based on these results, I'm sending the wrong message. Sam hasn't performed in a way that justifies a payout." However, too often, generous genes kick in and the bonus is paid anyway.

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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
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'
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
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
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
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
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
Creative Memories North America