TAILIEUCHUNG - Bloomberg Press 2005 Practice Made Perfect The Discipline of Business Management for Financial Ad_8

Tham khảo tài liệu ' bloomberg press 2005 practice made perfect the discipline of business management for financial ad_8', tài chính - ngân hàng, tài chính doanh nghiệp phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 118 Practice Made Perfect FIGURE Compensation Components Source Moss Adams LLP mission-based pay is essentially variable base pay. Like fixed base pay commission-based pay is the amount an individual gets paid for doing his or her job. The more an individual s performance is tied to revenue generation the more contingent on short-term variables that person s pay should be. The more an individual s role is related to processes or administration the more fixed his or her compensation should be. But there are variations on these themes depending on the type of culture and organization you re trying to create. Bonuses and Incentives A bonus or incentive is an amount over and above base pay that should be awarded when the business or individual achieves certain milestones or exceeds expectations. Too many advisory firms pay a bonus rather than an incentive. A bonus is usually a surprise it is not typically tied to any measurable expectation and tends to be discretionary. An incentive on the other hand links performance and behavior to the pay. it s important when setting up incentive programs to measure and reward the right types of performance and not merely achievement of the ordinary or expected. in compensating a professional adviser it s typical to have some amount of compensation at risk incentive pay based on the performance of either the firm or the individual or both . The theory is that incentive pay motivates a certain kind of behavior determined The Payoff for the Firm Compensation Planning 119 by how you structure the incentive plan and that incentive pay allows you to strike the desired balance of risk between the professionals and the organization. Most firms that do not have incentive pay omit it either by neglect or because they do not know what to measure. In some cases the reluctance seems to stem more from the desire not to judge or distinguish one individual s performance or contribution from another s at the risk of saying one is better than .

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