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  • Casual Articles - The Secret To Employee Accountability: Bonuses vs Pay for Performance

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    ash flow with a potential decline in business discipline, poor attitudes, and more lost profit and cash flow.

    In order for a performance compensation system to work

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    Bonuses paid when a job or a year “goes well” or “you make money”, or worse, paid as a Christmas bonus inevitably become ENTITLEMENTS. When the incentive is not paid based on the job and/or the year EXCEEDING your planned profit and performance, when it’s not based on the employee or employee group (as applicable) exceeding their specific standards in their jobs linked to your MINIMUM ACCEPTABLE PROFIT, simply the bonus becomes a gift and eventually becomes an expected entitlement. When it becomes an expected entitlement and it’s not paid on a job or at the end of the fiscal year or in December, the reverse often occurs…productivity declines - another waste of profit and cash flow with a potential decline in business discipline, poor attitudes, and more lost profit and cash flow.

    In order for a performance compensation system to work

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    d on the job and/or the year EXCEEDING your planned profit and performance, when it’s not based on the employee or employee group (as applicable) exceeding their specific standards in their jobs linked to your MINIMUM ACCEPTABLE PROFIT, simply the bonus becomes a gift and eventually becomes an expected entitlement. When it becomes an expected entitlement and it’s not paid on a job or at the end of the fiscal year or in December, the reverse often occurs…productivity declines - another waste of profit and cash flow with a potential decline in business discipline, poor attitudes, and more lost profit and cash flow.

    In order for a performance compensation system to work

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    standards in their jobs linked to your MINIMUM ACCEPTABLE PROFIT, simply the bonus becomes a gift and eventually becomes an expected entitlement. When it becomes an expected entitlement and it’s not paid on a job or at the end of the fiscal year or in December, the reverse often occurs…productivity declines - another waste of profit and cash flow with a potential decline in business discipline, poor attitudes, and more lost profit and cash flow.

    In order for a performance compensation system to work

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    ted entitlement and it’s not paid on a job or at the end of the fiscal year or in December, the reverse often occurs…productivity declines - another waste of profit and cash flow with a potential decline in business discipline, poor attitudes, and more lost profit and cash flow.

    In order for a performance compensation system to work

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    ash flow with a potential decline in business discipline, poor attitudes, and more lost profit and cash flow.

    In order for a performance compensation system to work it should have the following qualities:

    * Specific standards for the job and year must be clearly established, defined, and measurable both by position and overall job and company results in terms of PROFIT.

    * There must be a method of timely, accurate, and easily understood measurement by those performing the tasks comparing actual results to standards both at the job level, individual performance level, and at a defined company level.

    * Payments should be made routinely throughout the year, not just at year end.

    * Incentives paid on a specifically awarded job should have a portion deferred for quarterly or annual incentives to avoid the trap of on

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