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Pay for Results: Aligning Executive Compensation with Business Performance

Pay for Results: Aligning Executive Compensation with Business Performance


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About the Book

The numerous incentive approaches and combinations and their implications can be dizzying even to the compensation professional. Pay for Results provides a road map for developing and implementing executive incentives that drive business needs and strategy. It is filled with specific analytic tools, including tables, exhibits, forms, checklists. In addition, it uncovers myths in performance measurement strategy and design. Timely and thorough, this book expertly shows businesses how to drive their specific needs and strategy. Human resources and compensation officers will discover how to apply performance metrics that align with shareholder investment.

Table of Contents:
Preface ix Acknowledgments xiii Chapter 1 A New Day: The Call for a Demonstrable Link between Pay and Performance 1 Executive Remuneration Governance 1 Achieving the Right Balance of Interests 7 Performance Measurement as the Key to Good Governance 10 Change Is in the Air 10 Pay for Performance Today 12 Bringing Defensibility to Executive Remuneration 17 Chapter 2 The Million Dollar Question: What Is Good Performance? 21 Performance as Value Creation 23 No Magic Number 27 Requirements for Effective Performance Measurement 30 Metric Selection 31 Linkage 36 Goal Setting 37 Time Horizon 38 Striking the Right Balance 41 Chapter 3 Back to Basics: An Introduction to Mercer's Performance Framework 43 Why Manage for Shareholder Value 44 Systems Thinking 45 Alignment of Internal and External Value Definitions 48 Value Creation Demystifi ed 51 Balancing Growth and Returns 52 Mercer's Performance Measurement Framework 54 Case Study: Performance Measurement at Manufacture Co. 60 One Size Doesn't Fit All 63 Chapter 4 Trust, but Verify: Bringing Defensibility to Performance Metric Selection 65 Metric Selection in a Nutshell 66 Market Research: A Limited, but Informative Tool 69 The Science of Metric Selection 71 The Art of Metric Selection 84 A Balancing Act 87 Chapter 5 Making It Count: The Case for the Unbalanced Scorecard to Drive Behavior 89 Try, Try Again 90 From Solutions to Guiding Principles 95 Make It Motivational 96 Make It Meaningful 101 Make It Fair 105 The Future of Scorecards 107 Custom Solutions 112 Chapter 6 There's Nobody Quite Like Us: The Ins and Outs of Meaningful Peer Comparison 115 Why Peer Groups? 116 Screening for Peers 118 Desperately Seeking Peers 125 When One's Not Enough 129 Maintaining Peer Groups 132 Peer Groups in Practice 132 What's Next? 134 Chapter 7 You Don't Need a Crystal Ball: Taking the Guesswork Out of Target Setting 137 What's Fair? 138 Setting Performance Targets 141 Internal Target Setting 142 Externally Informed Target Setting 143 Relative Target Setting 149 Requirements of Relative Target Setting 153 No Simple Answers 155 Chapter 8 Passing the Big Test: Calibrating Pay and Performance 157 Incentive Plan Leverage 158 Leverage and Long-Term Incentive Vehicles 162 Leverage and Goal Setting 164 Simulation Modeling 166 Maximum Award Caps 170 Assessing Plan Costs for Reasonableness 172 Passing the Big Test 174 Chapter 9 Now What? Avoid Managing by Exception 177 Designing Incentive Plans for Maximum Flexibility 179 Dealing with Unavoidable Adjustments 182 The Question of Discretion 185 Dealing with Business Change 187 Walking a Fine Line 194 Chapter 10 More Than the Sum of Its Parts: Bringing It All Together 195 Getting Started 197 The Implementation Road Map 207 The Benefits of a Performance Measurement Mind-Set 211 Bringing It All Together: A Performance Measurement Checklist 214 About the Authors 221 Index 225

About the Author :
Mercer is a leading global provider of consulting, outsourcing, and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement, and other benefits. It is a leader in benefit outsourcing. Mercer's investment services include investment consulting and multi-manager investment management. Mercer's 18,000 employees are based in more than forty countries. For more information, visit www.mercer.com


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Product Details
  • ISBN-13: 9780470183908
  • Publisher: John Wiley and Sons Ltd
  • Publisher Imprint: John Wiley & Sons Ltd
  • Height: 231 mm
  • Returnable: N
  • Sub Title: Aligning Executive Compensation with Business Performance
  • Width: 152 mm
  • ISBN-10: 047018390X
  • Publisher Date: 21 Apr 2009
  • Binding: Hardback
  • Language: English
  • Spine Width: 23 mm
  • Weight: 436 gr


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