Incentive Compensation Solutions and the Impact of COVID 19

The onset of a global pandemic over the last two years has forced corporations to reconsider how they manage employee incentive compensation solutions, particularly with those employees who are eligible for incentive pay. Many organizations question whether or not incentive compensation management (ICM) programs still make sense in the midst of financial uncertainty. While some organizations maintained steady growth during this pandemic, other organizations experienced a downturn. With either scenario, both organization types can benefit from re-evaluating their ICM programs to make sure it maintains alignment with the current business environment.

Remote Work Impact on Incentive Compensation Solutions

One of the main shifts in employment has been the need to provide access to remote work. Since the onset of COVID, remote work availability increased to 56%. This included an opportunity to work remotely at least once per month. This can often present new challenges to organizations not used to managing remote teams. Awarding compensation based on performance can become more difficult without the ability to witness that performance first hand. By adopting an ICM solution, managers align expectations with results, which translates into a fair process for distributing incentive rewards.

Appeal of New Job Opportunities

Along with this increase in remote employment, employees have more options when it comes to navigating their careers. According to a survey by SHRM.org, more than half of employed Americans were looking for a new job in 2021. This makes it more important than ever for employers to adopt retention methods to ensure they don’t have to spend a disproportionate amount of their budget on training new hires. A robust ICM software solution can help organizations manage retention concerns by developing trust with employees that they are being fairly compensated for their efforts.

Alternative Incentive Compensation Solutions

A one-size-fits-all approach may not be sustainable in this environment for those organizations experiencing a downturn in revenue. Employers may need to consider alternatives within their incentive compensation solutions in order to reward their employees. In these cases, employers may need to adopt less traditional incentives that may not directly impact the bottom line. These incentives may include extra vacation days, health club membership vouchers, public award acknowledgments, stock options, etc. In many cases, studies have shown that employees often respond just as positively, if not more positively to these non-monetary incentives than monetary rewards. Again, by managing an automated incentive program, these various incentives can be administered effectively and efficiently.

There are many unique ways to launch and manage an incentive compensation management program. However an organization chooses to execute their ICM program, it is clear that an automated system is the best way to ensure you can maintain the flexibility and accuracy needed during a continually changing environment. For more information on how an incentive compensation management program can benefit your organization, contact The Motivator Team.