Unlocking Exceptional Performance: The Power of Well-Designed Financial Incentives

In this video, we delve into over half a century of research showing how financial incentives can significantly impact a company's performance—when they're designed thoughtfully. Discover why the key to successful incentives lies in targeting performance and rewarding increments in standards or demonstrations of skill. Employees value rewards that recognize their expertise and the completion of complex tasks, reflecting their desire for satisfying and meaningful work.

We also explore the critical importance of fairness in incentive schemes. Learn how transparency, consistency, and equity (but not necessarily equality) in rewards can make or break an incentive program. Employees have a keen sense of justice, and minimizing managerial discretion is essential to maintaining trust and motivation.

Finally, we introduce OOM's innovative approach to creating incentives that unlock exceptional performance. OOM recommends a substantial variable pay component—at least 20% on top of the guaranteed salary—that fluctuates based on the overall performance of the entire company. This variable pay is only distributed after ensuring the holistic balance sheet is preserved, promoting sustainability. This unique structure doesn't just act as a bonus; it becomes a catalyst for personal growth and achievement, providing individuals with newfound financial security and a clear sense of the value of their work.

Don't miss out on learning how effective incentive design can transform both your organization and your career.

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