There are some bad and good things that apply to gift cards that simply don't apply to cash. Nearly all gift cards have a finite life expectancy. Many expire within five years of purchase or activation. Some require annual maintenance fees that draw down against the value until fully utilized. But, they can also inspire people to delay use until some real need or item with great personal value becomes available. This type of delayed gratification is seldom seen as a benefit of cash in your pocket.
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I often say that the most important aspect of any incentive plan is its intent. Intent drives the details of design. Intent sets the foundation for communications. Intent informs people of the definition of success. But intent without great execution will nearly always fail.
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Given enough Lego and you can build just about anything. Sales compensation is similarly simple, flexible, and potentially complex. Do you focus people on volume, quality of sales, profitability, growth, long-term builds? This list is nearly endless. How you motivate people to stay focused is similarly flexible. Do you use commissions, SPIFFs, spot bonuses, long-term incentives, quarterly goals, annual goals, team metrics, or individual achievement? Do you focus on granularity or stay tuned with the big picture? Any program requires buy-in from so many people and groups. The final result is something that people depend on to pay their own bills and keep their company afloat. Making small changes is simple, but real change is hard.
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Everyone who has ever worked on sales incentives has heard people refer to roles as “farmers” and “hunters”. These two terms are used to simplify the focus of sales roles and the type of pay they receive. Unfortunately, this clouds the roles of salespeople in many of today’s businesses. Professionals who have the responsibility of bringing in new revenue are more complex than we often recognize. In truth, many are more like ranchers than they are farmers or hunters.
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Equity Compensation has been slowly going through its own version of climate change. Much like our planet, the environment for equity compensation has been changing for decades and very few have adjusted or even noticed. Whether you agree with the causes of climate change it is hard to deny that weather is different than it was even 50 years ago. Regardless of the driving forces, it is impossible not to recognize that equity compensation is delivering different results than it was when it became the major currency of tech startups in the 1980s and 1990s.
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During challenging times, focus your efforts on the things that are absolutely required for future success. Every working veteran who has survived tough times in their career has become stronger for the experience. Dealing with challenging conditions is a vital, if not career-essential practical lesson. Solid contingency plans followed with calm resolution, patient endurance, and unflappable confidence can and will succeed.
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Stop selecting and modifying data to match your past pay decisions. Just let the market data tell its story and use your intelligence to decide what to do with that data. You do not have to follow those ahead of you, and they may not be traveling in the same direction. Don’t be afraid to take your own road.
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Rather than stress the inherent risks in a quick path to IPO, try to remind people who they will be compared to once the company is publicly traded. Provide your staff with examples of companies that have weathered five or more years of post-IPO media and investor coverage. Explain what those companies did right and how your company can do similar things. In the end, a SPAC is…
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hat raise doesn’t mean what you think it means! Employees keep hearing how great our economy is performing. Jobless rates are at near all-time lows. Talent acquisition professionals are wailing about the availability of great talent. While all of this is happening, we are once again seeing predictions that annual merit budgets will be around 3%.
Merit: the quality of being particularly good or worthy, especially so as to deserve praise or reward; Synonyms: excellence, goodness, standard, quality, level, grade, high quality, caliber, worth, good
…and the similar sounding, but far different,
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So often we see companies whose executives are paid handsomely only to falter shortly after. How does this happen? Goals were apparently met. Success seemed to have been achieved. But the final result of the goals and success is a large payout followed by a sharp corporate collapse. Are we doing something wrong when we incentivize our executives?
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