Insights on Incentives has as its sole purpose the facilitation of thought and discussion on the subject of incentive compensation for banks and credit unions. Once a month NSS will be sending out an e-mail with one insight on the area of incentive compensation. The insights will come from our research, discussion with customers and finally, those of you who decide to offer an insight on this important sales management issue.
“ Caps” as a design tool in your incentive plans.
The first point on caps is to make every effort to avoid using them, as it can be a negative for a sales leader. However, there are basically three different situations where they have been incorporated into incentive plans. The first is when a plan design is new and a cap can protect you against flaws in the plan. The second is to protect against a windfall. Should a retiree walk in with millions of dollars in passbook accounts do you really want to pay thousands in incentives for opening up a series of CD’s? Finally, if you are paying a high base compensation, then it may be appropriate to cap incentives since you are already paying at the top of the market.
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Insights on Incentives is brought to you by NSS Corp.
