How to Design an Annual Incentive Plan

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  • Learn why an annual incentive plan is an important component of the overall total compensation program
  • What to evaluate if an annual incentive plan is right for your company
  • How to set up a proper way to measure performance objectives
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A plan’s projected payouts can be self-funded or budgeted, or even a combination of the two.
Performance measures may also be designed to measure company-wide, business unit, team, or individual results.
An attainable plan encourages the trust, confidence, and support of plan participants.
It is important to ensure that the actual percentage of pay at risk is also market competitive. Proceed cautiously when establishing pay at risk for administrative/operative jobs and entry professionals.
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