How to Tie Compensation to Strategic Plans
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Source: Accounting Today August Aquila, director with The Growth Partnership, provides a practical example of how to align compensation with the firm’s strategic plan.
The example assumes a balanced scorecard calling for the following targets:
100% The example assumes the firm will make incentive payments of 10 percent of compensation if the goals are achieved. In the example, the firm did not achieve the turnover goal or the turnaround goal, so the incentive is reduced to 7 percent. Key to the process is having a single vision for the firm and a relatively small number of targets consistent with that vision. The people in the firm must understand the vision and the goals, and be committed to achieving them. From Accounting Today, |