Theo Gupta· Head of Reward, Halcyon Financial Group
Asked in Global & Mobility ·
I run rewards at an industrial equipment manufacturer with about 15,000 employees in 31 countries. We are replacing 17 local bonus schemes with one global plan: 40% group operating profit, 40% country or business unit result, 20% individual.
The design is agreed. The fight is over the country element. Country targets are set in the budget process, and some general managers are far better at negotiating a soft budget than others. Last year Poland paid out at 138% and Mexico at 61% on what most people think was a better underlying year in Mexico.
How do others stop the local component rewarding budget negotiation instead of performance?
8 helpful · 1 insightful · 1 agree · 4 replies · 216 views · 4 following
Benefits Analyst, Silverline Media
We took target-setting for the bonus away from the budget. Country targets are set by group finance using prior-year actuals plus a growth factor by market tier, and the budget is a separate document. General managers hated it for a year and now mostly prefer it, because the argument is short.
Noor AlvarezCBS
Compensation Consultant, Vantage Telecom
A narrower payout range helps more than better targets. Ours runs from 50% to 150% on the country element with a wide band around target that pays between 90% and 110%. Budget quality still varies but it matters much less.
Nina LarsenGRS
Benefits Manager, Ravenna Chemicals
I disagree with narrowing the curve. If the country element barely moves, you have a group profit share with extra administration. I would rather keep real leverage and add a calibration step, where the executive committee can adjust a country result by up to 15 points either way with written reasons.
Global Mobility Manager, Kestrel Aerospace
Discretionary calibration by the executive committee tends to become a favour to whoever is in the room. If you add it, tie it to defined events: currency devaluation beyond a set percentage, an acquisition, a plant closure decided by group. We list six events and nothing outside the list qualifies.
