Driving Performance with Incentive Programs

personally I don't think that the emphasis should be on individual results... the emphasis should be working on a common goal to achieve a common mission developed by all. Everyone needs to be brought on board in order to successfully implement the developed strategy... Each department and stakeholder needs to be shown how each element on the scorecard helps everyone in the company to achieve the goals and the link between each element needs to emphasized.

Compensation is an important aspect to performance management systems. It is only when someone can see "What's in it for me?" that they really start to pay attention. That being said, you do want individual goals to be aligned with the goals of the department or the organization as a whole. I think that is what Jennifer is getting at in the above post.

Usually, if you study the individual performance management process in your organization, you can determine where and how to link individual objectives to that of the department or organization. This is the critical first step to linking compensation.

I've also seen different organizations fund their bonus pools based on some financial result, and then distribute the bonus pool, based on the individual performance against objectives.

As for the union environment, it really depends on the relationship you have with the union. You may find that the union is open to a discussion about how to better link their activities to a way that increases their compensation.

Have a look at some of these online resources - they might help you.

How do I link Corporate and Individual Performance Management Systems? - look under the "Advanced Topics" tab

Case Study 5: IIC - Aligning individuals’ goals with the business strategy

Both discuss the issues associated with aligning personal goals and incentives with corporate strategic goals, and in the case of the case study give you an illustration of how this issue was dealt with in an organisation.

I agree with Ted that the Union angle is probably not that material here - if anything it might make implementing this type of incentive scheme easier as you can get them involved in explaining the scheme and the benefits to their members etc.