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REGULAR COMMUNICATION variable pay alternative design options Primary Corporate Objectives Net turnover target Profit target Sales volume target Cash flow target Corporate Incentive Table Supportive Business unit Objectives Business Unit Incentive Table Supportive Individual Performance Objectives Individual Incentive Table variable pay.share participation schemes Typically limited to senior executive teams and senior professional staff: Retention ability of scheme results from fact that employee would be leaving a monetary entitlement behind should he/she resign % of Salary Converted to Share Allocation Share allocation transferred to individual following a vesting period example - BATSA Inclusiveness: Include everyone. Reward team results as opposed to individual results: In the emerging world of work, business success is increasingly determined by team effort rather than individual effort Line of sight: Ensure that employees see a link between what is required of them and the incentive payments. Simplicity: Keep it simple. Incentives must become part of the daily business agenda: Incentive targets and achievements against these targets must be common knowledge for employees and a source of daily inspiration for behaviour example - BATSA CompanyScore Card & Ratings Annual Incentive Payments 5 Bonusable Objectives Company Charter Line of Sight Objectives Functional Line of Sight Objectives Functional Charter Functional Score Card Individual Performance Contract Individual Performance Objectives Ensure employees see link between what is required of them and incentive pay Individual Performance Rating Individual Salary example - BATSA 25% Net Turnover Profit 25% Sales Volume 25% Cash Flow 25% 30% Incentive Payment Year-to-date Threshold Target Stretch Override agenda reward foundation job profiling and evaluation market & pay market surveys pay levels variable pay organisational processes employee benefits non-monetary benefits performance management & employee development pay for performance Total Reward employee benefits In deciding which benefits to offer, it is very important to understand the difference between the following two mayor benefit classes: Core Benefits: These are benefits where participation is a condition of employment for all employees

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