Chapter 20Performance Bonus Schemes

Performance bonus schemes have broken down across a wide range of organizations and they can be very costly without improving performance. This chapter is written for the CFO, or controller, who has been asked to design a performance bonus scheme based on better practice or to fix the current broken one. Jeremy Hope2 summed up the situation in this quote:

THE BILLION-DOLLAR GIVEAWAY

Performance bonuses give away billions of dollars each year based on methodologies where little thought has been applied. Who are the performance bonus experts? What qualifications do they possess to work in this important area, other than prior experience in creating the mayhem we currently have?

When one looks at their skill base, one wonders how they acquired the credibility in the first place. Which remuneration expert advised ...

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