Clearly, motivation is a complex issue and it is determined not only by salary and compensation policies. Based on our experience, we know that it is crucial to understand what behaviors exactly the given organization aims to encourage. For instance, if the goal is to foster an innovative culture but there is no budget or incentive for new innovative ideas, simply declaring the desired result will not lead to success.
In organizations, different competencies and behaviors may increase or decrease in relevance from one year to the next, or even from one quarter to the next, and if the established compensation system does not take this into account, it will not be effective.
According to our observations, it is also very important to precisely define expectations and understand what the best outcome would be for everyone. To achieve this, we actively use the facilitation workshops format, where members of the management team discuss specific ideas and agree on the key indicators of the compensation system.
In our experience, effective compensation schemes are those that are transparent, measurable, realistic (financially feasible), predictable, and aligned with specific roles/positions and strategic goals. In the implementation of such systems, we help organizations.
Reward System Analysis
The first step in developing an effective reward system is thoroughly analyzing the existing system. This includes both desk research and conducting in-depth interviews with management and non-management employees. Following this analysis, a report is prepared and presented to the leadership. If the organization lacks a reward system, interviews are conducted with the leadership and other representatives to complete an evaluation of whatever framework is in place to reward employees which is then presented.
Performance Evaluation System
When implementing performance evaluation systems, we rely on a broad range of methods, including 360-degree feedback, management by objectives (MBO), peer evaluations, and competency-based assessments. A performance evaluation system is tailored to the organization’s needs, identified earlier during the analysis stage. It involves preparing a policy document, evaluation cards, and, if necessary, checklists. We work intensively with stakeholders to support and implement these systems.
Grading System
We help organizations to establish fair compensation structures by developing a grading system, which is adapted to meet the organization’s needs and core competencies. Implementation here includes integrating each position into a unified system and creating compensation frameworks. During this phase, a policy document is developed, and intensive meetings with company representatives are held to ensure smooth integration.