Comp and Coffee Ep 12 - Incentives and Rewards
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Jul 13, 2018 Conversations about aligning incentives to company goals and cascading measurable targets. Discussion on avoiding siloed KPIs and the friction when sales, product, and manufacturing misalign. Exploration of incentive failures and the difference between formulaic incentives and discretionary bonuses. Talk about personalizing rewards, cash versus perks, and non-monetary options like sabbaticals.
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Goals Must Cascade From Company To Individual
- Effective incentive design must cascade from company goals to department and individual goals.
- Bill explains three tiers: company, department/function, and individual, with weight shifting toward company goals higher in org.
Give Employees Goals They Can Control
- Set individual goals only on outcomes an employee can control or visibly influence.
- Sean and Bill stress avoiding goals that depend on other teams, because employees will ignore uncontrollable measures.
Avoid Siloed KPIs In Interconnected Teams
- Incentives must be built collaboratively across interconnected departments to avoid friction.
- Bill warns siloed KPI setting creates conflicts like marketing delivering leads sales deems poor because planning was rushed and not cross-functional.