Strategic Incentive Design

An adequate design of incentives allows the company to promote and effectively communicate the desired behaviors of its human resources to achieve business goals.

A strategic design will also allow top management to respond to shareholders and other stakeholders -in a practical and systematic way- on questions related to value creation, business plan execution and critical management initiatives.

Shareholder value is derived from revenue growth, improved margins and asset efficiency. While these value levers are useful, they do not guide any particular organization with respect to critical decisions about where and how to compete.

CompStrategy can help to define incentive policies, the definition of competitive measures/indicators and their monitoring guidelines, as well as the definition of elements and mechanisms that ensure the creation of value as an objective. Normally, our services in Incentive Design can include the following elements:

• Definition of Incentive Policy
• Definition of Target Incentive Values by organizational level
• Matrix calibration or other tools oriented to pay based on performance combined with scale position, potential or other
• Definition of Scenarios -Target, Maximum, Minimum, Other- to be applied in selected key performance indicators
• Cost Estimation as result of the recommended Incentive Scheme
• Goal setting advice and review acording to criteria "S.M.A.R.T." or "S.M.A.R.T.+"
• Incentive Cross-checking
• Design of Control Panels - Balanced Scorecard
• Identification of Lagging and Leading Indicators
• Value Creation Mapping/Value Trees
• Assistance in the execution of Annual Incentive Cycles