Short-term incentives popular, but measurement lacking: Survey

83 per cent of organizations use short-term incentive pay
|Canadian HR Reporter|Last Updated: 12/14/2010

A strong majority (83 per cent) of Canadian organizations use short-term incentive pay plans for at least some employees, but 69 per cent said they are unable to assess the cost-effectiveness of these plans. That’s according to a recent report by the Conference Board of Canada, Making Short-Term Incentives Work for Your Organization.

“Determining an approach for measuring plan effectiveness remains a topic of debate as boards and senior management become increasingly interested in this form of compensation,” said authors Amanda Holmes and Eric St-Jean.

“With a significant portion of an employee’s remuneration coming from incentive pay, it remains critical to identify a link between the short-term incentive pay plan and business outcomes to ensure the organization is investing its money effectively.”