And his advice has little to do with the current state of the economy, where companies are cutting back and many are doing away with holiday bonus programs.
“Business owners and CEOs need to recognize there exist more creative vehicles that can serve as year-long incentive programs to drive and maintain growth as well as recruit and retain key talent,” said Moniz. “In fact, studies indicate that the impact of a holiday bonus on employee focus is typically two weeks prior to and one week after receipt, with further statistics pointing to the increase in resignations shortly after the check is cashed – what is needed is a rewards program that stimulates employee focus all 52 weeks of the year, not just three.” Further proof of the ineffectiveness of this rewards strategy is to look at the number of resignations that come in January and February. “Clearly, in that case, the incentive was only to wait for the check and then leave.”
Deferral plans, phantom stock and company stock options are sound compensation avenues that clearly demonstrate allegiance to key employees, but all too often company heads can get hung up on the word “compensation. “ The framework of an incentive program becomes compromised when the company looks at “compensation”
An overall diagnostic of a company’s existing rewards program is best conducted by gathering data that addresses the business owner’s vision for the company’s future and growth expectations. Key staff members should be asked to specify their individual objectives in relation to the company’s performance and anticipated growth, Moniz advises.
Identifying and solidifying key compensation philosophies and priorities is at the heart of an effective incentive plan, according to Moniz, who is a national speaker on business growth strategies, succession planning, executive compensation and wealth management.
He believes that this evaluation helps to achieve a unified financial vision for growing a business. It can also distinguish the relationship between company and employee wealth building goals; establish the framework of an employee and executive compensation philosophy; and identify factors which will impact desired performance.
“Ultimately, this process will help to ensure that the company’s compensation philosophy is built upon a proper and lasting foundation,”
For additional information on executive compensation plans, and a no-obligation consultation, please contact James E. Moniz at Northeast VisionLink, email@example.com, 781-356-2969. Northeast VisionLink and its sister company, Northeast Wealth Management, maintain offices at 50 Braintree Hill Office Park, Suite 109, Braintree, MA 02184.
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