The previous experience of many of our clients and our research clearly indicate that the most financially detrimental conflict within many organizations is that which exists between their reward systems, organizational objectives, and performance management methodologies. With our innovative custom-designed performance management, base pay and variable compensation systems, Leadership Strategies, LLC helps organizations align their employee and executive efforts and reward systems behind their strategic intent. We design and help you to deploy performance enhancement and reward strategies that directly drive organizational success while contributing to business growth, revenue and profitability improvement, and shareholder value.

A significant risk that your organization faces is that of "stranded compensation" costs. Simplified, "stranded compensation" is when individuals or functions are paid in excess of what their true economic value is to the organization and its customers. It is very similar to paying too much for a piece of machinery . . . the money spent on the machinery would be more wisely spent elsewhere. Many performance appraisal processes now in use have contributed dramatically to stranded compensation expenses largely because of their subjective nature and design and because they are single dimensional (supervisor to subordinate). An even greater risk to your organization is presented when a complex competency-based performance management system is utilized, all of which have substantial research proving their inaccuracy and inability to improve either individual or organizational performance

We design systems that eliminate that form of waste, encourage productivity, create focus on customer demands and market conditions, and reward individuals and teams when results are achieved and generally, only when results are achieved. Our systems refocus executives and employees from job responsibilities and bosses exclusively to organizational objectives and improved human performance. Fundamentally, these systems are designed to reward employees when their behaviors and contributions directly support what the organization is attempting to accomplish.

The competitive landscape as it relates to both staff and customers has changed dramatically during the last three years. Unfortunately, many base pay, variable compensation, and performance management systems have not. The experience of many of our clients and our own research since 1992 indicates with crystal clarity that staff and labor expenses fall in proportion to the degree that human performance is properly managed, appraised and rewarded. When those three endeavors are approached properly the organization will always be sized correctly based on its market and its market opportunities. When staff levels, human performance, and human capital expenses are optimized, there is seldom a need for downsizings and reorganizations.

Organizations that most tend to undergo repetitive downsizings, declining financial performance and lost market share are not coincidentally the same organizations that have tended to miscast their performance management and reward systems.

In summary, reward systems should be self-funded through improved individual and organizational performance. Performance management systems should likewise result in traceably and objectively improved individual and team performance. When those pursuits occur concurrently, the performance of the organization and the commitment of both employees and customers rise to levels that greatly please all stakeholders.

Some of our Performance Management and Compensation Design services include:

• Design and implementation of customized human capital performance appraisal systems that directly drive individual and organizational performance in clearly traceable ways.
• Implementation of multi-rater feedback methodologies that, by design, eliminate all risk of single rater errors and undue political/preferential influence and treatment.
• Replacement of subjective performance evaluation methods with objective evaluation methods, with no residual negative effects.
• Design and implementation of fully correlated candidate selection systems, individual/functional/geographic/market-based goal setting systems, performance management and feedback systems, and reward systems.
• Peaceful elimination of the tendency toward delayed performance feedback, absent day-to-day performance coaching, and retroactive compensation adjustments.
• Regional, national and international base compensation analyses and self-funded program development for executive, exempt and non-exempt positions.
• Complete correlative analyses and remedial design of current compensation systems in order to clearly support organizational objectives.
• Design of meaningful and optimal executive perquisite systems.
• Development of self-funded short and long-term variable pay systems that align human efforts throughout the organization while dramatically improving financial performance.
• Complete elimination of "stranded" compensation expenses.
• Elimination of systemic conflicts whereby one internal reward system conflicts with and negatively impacts another.

Our work generally begins with an analysis of the client's current goal setting, performance management and reward system approach while developing an understanding of the business at the operating and P&L level, related financial metrics, organizational culture, market challenges and strategic plans. We then work with client staff members and/or teams to develop innovative performance management and reward systems that support all organizational intentions while maximizing behavioral and financial returns. We ensure that all reward system and performance management components are simple and easily understood, strategically linked, and directly support the organization's objectives.

Contact us or call us at 480-467-0344 and we would be pleased to provide you with further information about these or other areas where you may need assistance.