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Aligning Performance Goals and Incentives - Coggle Diagram
Aligning Performance Goals and Incentives
The Nature of Performance Goals
Purpose of Performance Goals
Critical Performance Variables
Goals, Objectives and Targets
Objectives
have six firm orders in hand
reduce the cost of waste and scrap by 10% each quarter over the next year
earn 15% return on sales in the next year
Goals
improve production efficiency
become profitable
introduce a new line of sailboats for the cruising market
Selecting Performance Measures
Test 2: Can It be Measured Effectively?
Test 3: Is the Measure Linked to Value?
Test 1: Does It Align with Strategy?
How Many Measures for Each Employee?
Setting the Performance Bar
Motivating Effort
level of difficulty
How Many Measures for Each Employee?
Benchmark Comparisons
Aligning Incentives
The Bonus Pool
The Allocation Formula
Multiple Purposes of Performance Goals
deferred cash payments
awards of company stock
gifts and prizes
awards of company stock