Further considerations

Performance-related compensation is not the only salary component which can be used to motivate employees. Other forms of remuneration may also have a positive impact. 

BONUSES

ISSUES TO BE CONSIDERED BENEFITS OF AN EFFECTIVE SYSTEM
  • Manager loyalty
  • Lack of equity and transparency
  • Lack of oversight and traceability
  • Cost optimization
  • Time-consuming evaluation procedures
  • Lack of centralized overview
  • Flexibility
  • Transparency
  • Traceability
  • Monitoring and real-time control of the process
  • Management of exceptions

STOCK OPTIONS AND BONUS SHARES

 ISSUES TO BE CONSIDERED BENEFITS OF AN EFFECTIVE SYSTEM
  • Awarding stock option budgets to different organizations within a group
  • Ensuring compliance with attribution rules
  • Difficult to simulate
  • Time-consuming evaluation procedures
  • Monitoring the life cycle of stock options
  • Need for a single overview of stock options

     

  • Dedicated system
  • Planned nature of award scenarios: control and anticipation of budgetary impacts
  • Transparency
  • Smooth handling

 salary review

ISSUES TO BE CONSIDERED BENEFITS OF AN EFFECTIVE SYSTEM
  • Way of addressing voluntary departures
    Employee loyalty
  • Time-consuming salary review procedure
  • Lack of flexibility and responsiveness
  • Maximum pressure on HR personnel over a short time period
  • No central overview
  • Limited consolidation, particularly internationally

     

  • Compensation rise scenarios can be simulated
  • Decentralized implementation of compensation policy
  • Hierarchy management and internal mobility
  • Equity with respect to experience and performance (quantitative and qualitative)
  • Transparency and smooth handling of procedures
     

  


  

GLOSSARY

 

BONUSES
Periodic performance-related compensation based on meeting targets.

 

BONUS SHARES
Shares issued free to employees following the raising of capital through incorporation of surplus. They are free, as the capital increase does not actually change the value of the company.

 

COMMISSION
A compensation system for sales personnel, based on a small fixed salary plus unlimited bonuses.

 

COMPENSATION REVIEW
Operations enabling the simulation of compensation policy and the management of compensation review and appraisal interview processes.

 

PERFORMANCE-RELATED COMPENSATION
A performance bonus or salary increase awarded to individuals in accordance with clear criteria.

 

STOCK-OPTIONS
Share purchase or subscription options at a fixed price generally offered to managers/employees of a corporation to provide a direct incentive to growing the company’s value.