The Most Common Pay-for-Performance Mistakes

This week, Lou Mosca talks about the mistakes he sees business owners making most frequently when trying to incentivize employees.

Good Morning!

Here are today’s highlights:    

• All of a sudden, a lot of companies are actually cutting prices.

• Is it a good thing if job applicants list failures on their resumes?

• Some companies are using RTO to avoid layoffs.

• Proposed legislation would crack down on private equity firms.

MANAGEMENT

In this week’s video, Lou Mosca talks about what business owners get wrong about pay-for-performance plans: “Many businesses confuse them with commission structures, annual raises, or subjective bonuses. A commission plan applies to salespeople, and annual raises typically reflect cost-of-living adjustments, but neither constitutes pay-for-performance. Actual pay-for-performance rewards employees for going above and beyond their expected duties. For instance, if designers earning $50,000 can generate more business, a pay-for-performance plan would offer them a percentage of revenue above a set benchmark.”

• “A key mistake is using the term loosely, offering vague promises of more pay without a structured plan. Instead, companies should focus on profit planning.” CONNECT WITH LOU