5 design principles for structuring compensation plans – Verne Harnish

  1. Be Different – If you’re paying the same as your competition you’re fishing in the same pond.
  2. Fairness, not sameness – Not all employees perform equally. Don’t pay them equally.
  3. Easy on the carrots – Too many perks make people feel entitled.
  4. Gamify gains – Look for company-wide participation to achieve company-wide gains.
  5. Sharing is caring – 401k, stocks, and other programs that vest over time create longevity and loyalty.