John G. Belcher - How to design & implement a results-oriented variable pay system

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title	:	How to Design & Implement a Results-oriented Variable Pay System
author	:	Belcher, John G.
publisher	:	AMACOM Books
isbn10 | asin	:	0814402968
print isbn13	:	9780814402962
ebook isbn13	:	9780585039978
language	:	English
subject	Wage payment systems--United States, Incentives in industry--United States, Compensation management--United States.
publication date	:	1996
lcc	:	HD4927.U6B45 1996eb
ddc	:	658.3/225
subject	:	Wage payment systems--United States, Incentives in industry--United States, Compensation management--United States.

Page i How to Design & Implement A Results-Oriented Variable Pay System John G. Belcher, Jr.

Page ii This book is available at a special discount when ordered in bulk quantities. For information, contact Special Sales Department, AMACOM, a division of American Management Association, 1601 Broadway, New York 10019. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Library of Congress Cataloging-in-Publication Data Belcher, John G. How to design & implement a results-oriented variable pay system/ John G. Belcher. p. cm. Includes bibliographical references and index. ISBN 0-8144-296-8 (hardcover) 1. Wage payment systemsUnited States. 2. Incentives in industryUnited States. 3. Compensation managementUnited States. I. Title. HD4927.U6B45 1996 658.3'225dc20 96-4737 CIP 1996 John G. Belcher, Jr. All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of AMACOM, a division of American Management Association, 1601 Broadway, New York 10019. Printing number 10 9 8 7 6 5 4

Page iii Contents List of Figures v List of Tables vii 1 Pay and the Competitive Environment 1 2 The First Steps 17 3 The Design Process 37 4 Selecting the Basic Formula Framework 53 5 Formula Variations 81 6 Multi-Tiered Plans and Small-Group Systems 103 7 Selecting and Evaluating Measures 113 8 Assigning Values to Gains or Goals 127 9 Establishing Baselines and Modeling the System 149 10 Sharing the Gains 169 11 Paying Bonuses 181 12 Completing the System Design 201 13 Preparing for the Launch 211 14 Lessons Learned 225 Appendix: Suggestion Committee Procedures 235 Suggested Readings 239 Index 243 Page v List of Figures Figure 2-1. Variable pay memorandum of agreement. 34 Figure 3-1. Management parameters for steel plant. 43 Figure 3-2. Management guidelines for building products company. 44 Figure 4-1. Goal-sharing plan for electric utility. 74 Figure 4-2. Formula continuum. 77 Figure 5-1. Distribution center preapproved goal list. 85 Figure 5-2. Formula continuum. 89 Figure 5-3. Quality modifier 91 Figure 5-4. Electronics company measures. 96 Figure 5-5. Payout matrix. 97 Figure 7-1. Flat trend. 118 Figure 7-2. Rising trend.

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