1. Pay People Right Zingheim & Shuster Chapter 8 Long Term Variable Pay

2. Three Types of Variable Pay Short Term Long Term Cash Long Term Equity

3. Long Term Cash Variable Pay Multi-year project (cash) Performance unit Event-related Overlapping performance periods

4. Pay for Sustained Performance Focus on needed long-term results Emphasis on business results other than stock performance Reward multiple long-term measures and goals at the same time Create emphasis on overlapping performance

5. Reward major breakthroughs that change the business forever Examples?

6. Stock Options Objective: Potentially pass real equity in the enterprise to those awarded options A workforce of owner-workers Stakeholdership

7. Criteria for stock options Understandability Demonstrated value Business justification Flexibility Patience

8. Types of stock options Executive Key-talent Workforce Special Achievement Organization-wide Hiring Award