Do you reserve a portion of the company bonus pool to recognize individual performance when overall company performance is below target? If so, do you take a uniform approach to all levels of employees?
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HR Data Analyst in Government7 months ago
Some companies I worked for in the past did this by "holding back" a percentage of the company's annual budget for variable pay incentives and base pay increases. For example if the annual merit increase budget was 3% of the company's total base salary expense, leaders of an organization within the company could instruct their teams to propose salary increases equal to 2.75% of that organization's total base pay expense. Once the teams had submitted their proposed base pay increases, leaders allocated the funds equal to the remaining .25%. Allocation decisions were made according to known company policies and practices (ie: address internal pay equity issues for high-performing employees). As best I can recall, this practice helped managers motivate and retain employees, especially during times when the company as a whole was not meeting performance expectations. Anyone considering such a practice should be transparent with leaders about the intended reasons for it, to maintain trust in the company's compensation practices.VP of HR7 months ago
In past organizations, incentive goal payments were based on a portion for company performance and a portion for individual goal achievement. The split varied based on your level in the organization. In addition, I have also experienced where the organization was granted a merit pool and leadership held back a half of a percent to award exceptional performance during the year (a major project achievement).