1. Linking Rewards to Strategy By R. Henry Migliore

2. Tying Appraisals to Rewards How we usually reward people How we usually reward people What is wrong with present approach What is wrong with present approach Poor targets Poor targets Emphasis on the form Emphasis on the form Too complicated Too complicated Lack of training Lack of training Understand basics Understand basics Potential if done correctly Potential if done correctly

3. Strategic Planning Process Define Strategic Plan Define Strategic Plan Show where the reward fits Show where the reward fits Planning must have product and process Planning must have product and process Planning must be done right for evaluation, performance appraisal, and rewards to work Planning must be done right for evaluation, performance appraisal, and rewards to work

4. Strategic Planning Process Performance appraisal and rewards usually come last Performance appraisal and rewards usually come last Organization structure impact on success and performance measurement Organization structure impact on success and performance measurement

5. Strategic Long-Range Planning Process

6. Theory Behind Reward Systems Higher level needs/intrinsic Higher level needs/intrinsic Pay for performance/extrinsic Pay for performance/extrinsic Must have both Must have both Emphasis on individual and team Emphasis on individual and team Regular reviews Regular reviews Athletic Team Athletic Team Business Team Business Team

7. Reward Opportunities

8. Performance Appraisal Form

9. Reward Opportunities Athletic team Athletic team Baseball Baseball win 20 games win 20 games Go to World Series Go to World Series Football Football rush 1000 yards rush 1000 yards Go to Super Bowl Go to Super Bowl Business Unit Business Unit Sales Sales Meet marketing objectives and ROI best in last 5 years Meet marketing objectives and ROI best in last 5 years Manufacturing Manufacturing Increase production 15% and ROI best in last 5 years Increase production 15% and ROI best in last 5 years

10. Reward as a team player Reward as a team player Golden handcuffs Golden handcuffs Bonus paid over longer term Bonus paid over longer term Share equally? Share equally? Boss Evaluation Boss Evaluation

11. Benefits of Reward Systems The organization will determine where it is going The organization will determine where it is going It will be able to identify opportunities and risk It will be able to identify opportunities and risk All organization members will be forced into a consensus as the direction for the organization is identified All organization members will be forced into a consensus as the direction for the organization is identified As managers have the opportunity to have input into the planning process, they will experience a surge of excitement As managers have the opportunity to have input into the planning process, they will experience a surge of excitement

12. Benefits of Reward Systems Communication in all directions will be instantly improved Communication in all directions will be instantly improved Non-productive persons will fall by the wayside Non-productive persons will fall by the wayside Increases should be expected in all measurable areas – profitability, productivity, and so on Increases should be expected in all measurable areas – profitability, productivity, and so on Within a year, a personal training and development plan will evolve for all persons in the organization Within a year, a personal training and development plan will evolve for all persons in the organization

13. Rules for Compensation Salary administration should be centered around accountability, not activity Salary administration should be centered around accountability, not activity Write job objectives instead of job descriptions Write job objectives instead of job descriptions People who are committed to your organization are worth more than people who are not committed to it People who are committed to your organization are worth more than people who are not committed to it People who feel they are underpaid will behave like unpaid employees People who feel they are underpaid will behave like unpaid employees

14. Rules for Compensation People who aren’t meeting all of their regular, ongoing, and recurring responsibilities should not be given merit increases People who aren’t meeting all of their regular, ongoing, and recurring responsibilities should not be given merit increases Bonuses should be paid only for beating an indicator Bonuses should be paid only for beating an indicator Fair pay does not motivate, but unfair pay demotivates Fair pay does not motivate, but unfair pay demotivates The higher the person is in the organization, the more you pay for strategies and creative thinking The higher the person is in the organization, the more you pay for strategies and creative thinking

15. Opportunities For Any Organization Strategic Planning emphasis for Consulting Division Strategic Planning emphasis for Consulting Division Information systems supports planning system Information systems supports planning system Provides performance appraisal/reward service Provides performance appraisal/reward service Information system supports performance appraisal Information system supports performance appraisal Strengthens SERVICE to clients Strengthens SERVICE to clients Cost leadership, focus differentiation Cost leadership, focus differentiation

16. Discussion