Achieving strategic objectives in any organization depends on the performance of every single employee. Staff need to be aware of their employer’s overall strategic objectives and those that are relevant to their specific field of activity so that they are able to keep them at the forefront of their minds and work towards them in their daily routine and also when dealing with particular issues. Staff also need to have an incentive to always make decisions within their discretion that are most conducive to achieving the company’s objectives.
In order to meet these challenges, businesses tend to use variable remuneration schemes. These may be measured at company, divisional and individual levels and usually focus on the financial and strategic short-term and long-term objectives of both the organization as a whole and the individual department where the employee works. At the same time, employees’ individual targets are also used identify fields of action that are specific to their routine activities. These targets are usually agreed individually between the employee in question and their manager. This also helps to achieve higher levels of identification with the company.
As a result of their business activities, some organizations have certain limitations regarding their remuneration system imposed on them by national and international regulations. These companies often find themselves in a difficult position regarding pay and are faced with many questions, e.g.:
- What is the best ratio between short- and long-term remuneration?
- Which indicators can be used to measure performance?
- How should remuneration elements be designed so that they take account of the company’s long-term success?
- Which carried-interest scheme optimally joins up employee performance with the success of the fund?
- Will rewarding individual performance with a bonus actually add value as expected?
Finding answers to these questions is key to a performance-related pay strategy and thus the success of the business. hkp/// group industry experts will help you design remuneration systems that are focused on your corporate strategy. Their work as consultants on a diverse range of projects in the financial services industry has given them a wealth experience.