I have been asked to develop an incentive pay plan for our employment recruiters...any advice as to how I begin?
-- Patricia, director employment/temporary service, Birmingham, Alabama
A Dear Patricia:
The process of developing an incentive plan of virtually any type essentially involves several key sequential steps. These include:
- Determining the purpose or objective of the plan (e.g. retention, motivation, etc.)
- Determining what you want to use and can use as performance measures
- Designing the plan’s key elements
- Developing formal plan documents
- Communicating and implementing the plan.
Incentive plans for recruiters are often individual plans, meaning that each recruiter is rewarded for his or her individual performance. However, they can be also be ‘group’ plans or a hybrid involving both individual and recruiter ‘group’ performance measures.
Key ‘end result’ or ‘output’ performance measures often associated with recruiters include the number of actual successful placements who stay with the company for a minimum defined period of time, the number of successful offers made, adherence to recruitment budget for new hire compensation, and how satisfied new employees were with the process by which they were recruited.
Generally, behavioral or ‘input’ measures such as the effort expended, number of calls made, and number of interviews conducted can and often should drive base pay, while the output factors in the prior paragraph should drive the incentive portion of a recruiter’s direct cash compensation.
Other suggestions include involving the recruiters themselves in the actual plan design, financially modeling the impact of proposed incentive approaches, and taking time in the plan design stage to cover key considerations such as vesting, deferral, termination impact and plan administration.
SOURCE: Brian Walby, director, in PricewaterhouseCoopers' Unifi Network compensation practice. Walby is based in Detroit.
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