Your reflections on compensation structures speak to a wider conversation we need to have in the business world.
It's true, an overemphasis on short-term KPIs can lead to a myopic approach, encouraging decisions that might boost immediate results but compromise long-term success.
Just as Steve Jobs focused on creating innovative products with lasting impact, it's critical that our compensation structures also motivate employees to think and act for the long-term health of the business.
Imagine a structure where individuals are not just workers chasing after the next commission or hitting the next KPI.
They are rather seen as integral parts of a grand narrative, contributing to the overarching success story of the company. It's about playing the long game, where every decision counts towards a shared, enduring vision.
In such a compensation plan:
Base Salary: Constitutes a significant part of the total compensation, providing financial stability and allowing employees to focus on their work without the constant worry of hitting short-term targets.
Variable Component: Comprises a smaller proportion and is tied to longer-term goals and the overall success of the company. This ensures that employees' interests are aligned with the long-term growth of the company.
Stock Options: These are an excellent way to further align the interests of the employees with those of the company. When the company's performance improves and the share price goes up, everybody wins.
After all, we are in it for the long haul, aren't we?
The goal is to build a sustainable business that delivers value to all stakeholders - customers, employees, and shareholders alike.
Your reflections on compensation structures speak to a wider conversation we need to have in the business world.
It's true, an overemphasis on short-term KPIs can lead to a myopic approach, encouraging decisions that might boost immediate results but compromise long-term success.
Just as Steve Jobs focused on creating innovative products with lasting impact, it's critical that our compensation structures also motivate employees to think and act for the long-term health of the business.
Imagine a structure where individuals are not just workers chasing after the next commission or hitting the next KPI.
They are rather seen as integral parts of a grand narrative, contributing to the overarching success story of the company. It's about playing the long game, where every decision counts towards a shared, enduring vision.
In such a compensation plan:
Base Salary: Constitutes a significant part of the total compensation, providing financial stability and allowing employees to focus on their work without the constant worry of hitting short-term targets.
Variable Component: Comprises a smaller proportion and is tied to longer-term goals and the overall success of the company. This ensures that employees' interests are aligned with the long-term growth of the company.
Stock Options: These are an excellent way to further align the interests of the employees with those of the company. When the company's performance improves and the share price goes up, everybody wins.
After all, we are in it for the long haul, aren't we?
The goal is to build a sustainable business that delivers value to all stakeholders - customers, employees, and shareholders alike.