6Why You Need to Reward Different People Differently

“All of us perform better and more willingly when we know why we’re doing what we have been told or asked to do.”

—Zig Ziglar

Nearly all firms that ask us to work with them are dissatisfied with the firm’s current owner compensation system. The trigger is often a change in leadership, which is a good time to review a variety of systems. Another trigger is the belief by younger owners that the system is unfair. Whatever their reasons, firm leaders want compensation to be more transparent, more performance based, fairer, and more effective.

To create or re-design an effective compensation plan, you must consider many things. In this chapter, we look at seven reasons why we need to reward people differently today. There may be more, but we hear about these most often:

  1. Performance-compensation gap

  2. The need to reward performers

  3. Align monetary and nonmonetary rewards with position level

  4. Evolving business models

  5. Competitive landscape

  6. Work-life balance

  7. Generational differences

We also share more results from our 2011–12 Performance Management and Compensation Survey.

We saw in chapter 1, “Workforce Trends in the Twenty-First Century,” the many trends affecting the ways employees carry out their work. Just 15 years ago, for example, coworkers believed you weren’t working if you weren’t at your desk. That perception has certainly changed. Technology allows people to work remotely and at any hour of the day or night. In the same fashion, ...

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