Question
Looking for a recommendation for an effective pay for performance variable compensation plan. The presentation should provide with a variable pay plan design that will
Looking for a recommendation for an effective "pay for performance" variable compensation plan.
The presentation should provide with a variable pay plan design that will support the company (DDA's) business goals, organizational culture and desired employee behaviours.
She needs you to include the following in the recommendation presentation:
-An overview of how variable pay will benefit DDA
-The range of possible plan design choices to consider for DDA
-A recommended pay for performance approach including the performance cycle, eligibility criteria and measures to be rewarded
-A plan to communicate and administer the plan and at what cost.
As you will recall from your earlier work the 2020 results to date were showing a decline in revenue to less than 5% year over year growth, far lower than the planned 10% growth.This is still stronger than the actual 2019 year end results which were 3.5% year over year growth from 2018.The 2021 forecast is at 5% growth.
Recent key Corporate Performance results and forecast for next year ($million):
2017
2018
2019
2020 estimated
2021 forecast
Gross Revenue
$307.5
$338.3
$350.0
$367.5
$378.5
Operating Expenses
$30.0
$31.5
$33.1
$34.1
$35.3
Sales & Marketing
$236.5
$263.4
$271.8
$285.9
$294.6
Operating Income
$18.5
$19.8
$20.3
$21.9
$21.9
Client Accounts:
Existing
New
875
125
1,000
75
1,075
35
1,110
45
1,150
62
Employees
280
294
300
312
315
Total Payroll Cost
$22.5
$23.6
$24.8
$25.6
$26.7
Last year DDA introduced an initiative for all employees to have an informal 6 month and 1 year formal performance review assessment based on:
-job metrics to achieve business results and
-competencies - the desired behaviours -- associated with achieving the results.
This initiative was started senior levels and is slowly being implemented at levels or work.
The following 3 strategic drivers were communicated to all employees ahead of the next performance review cycle:
CUSTOMERS
PROCESSES
LONG-TERM GROWTH
Continuously evolving how we serve our customers by knowing them and anticipating their needs
Providing value based on products and services delivered through efficient processes
Being a growth oriented long-term investment
Present the layout in 20 slides
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