Strategy Formation and Organization Design

Compensation Design



Compensation Design determines the contribution of  specific, properly executed activities to the achievement of organizationally desirable outcomes. The value of the accomplishment, not the level of activity, is used to establish the nature and amount of compensation. Ultimately, compensation design should foster a productive and equitable, long-term relationship among members, and between each member and the organization.

The process begins by identifying desired outcomes for the organization, or operating unit.  Importance and value are attached to the results people achieve with reference to the needs of the organization.  Compensation is based on the achievement of results that are critical to organizational success.

The Compensation Design process will enable you to:

        Determine the critical goals for your organization

        Translate critical goals into realistic performance expectations

        Establish specific performance responsibilities

        Develop accurate performance measures

        Compensate employees for results and value received.


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Last modified: September 08, 2000