Which of the following encourage self-monitoring and peer monitoring? (Select all that apply)

By aligning executives’ financial incentives with company strategy, a firm can inspire its management to deliver superior results. But it can be hard to get pay packages right. In this article four experts break down the key elements of compensation and explain how to put them together effectively.

When designing packages, boards must make decisions about the proportion of fixed versus variable pay, short-term versus long-term incentives, cash versus equity, and group versus individual rewards. Many look at the copious data available on executive pay and benchmark their plans against those of their industry peers. The mix is also driven by company size, region, culture, and risk appetite.

A good plan always begins with a firm’s strategic goals, however. Is the company striving for profitable growth, a turnaround, or a transformation? Is it trying to compete with public companies as a private entity? Each scenario calls for a different plan design.

The Covid-related economic crisis may also alter plans. If targets become unachievable, incentives will lose their power and need to be revised—offering firms a chance to incorporate measures that serve stakeholders’ interests better.

When executive pay is structured to align with corporate strategy, it can drive better performance.

Many firms struggle to achieve this alignment, and only a few best practices work in all situations.

The company must start with a clear strategic objective and then consider several trade-offs as it designs compensation packages.

Decisions about executive pay can have an indelible impact on a company. When compensation is managed carefully, it aligns people’s behavior with the company’s strategy and generates better performance. When it’s managed poorly, the effects can be devastating: the loss of key talent, demotivation, misaligned objectives, and poor shareholder returns. Given the high stakes, it’s critical for boards and management teams to get compensation right.

A version of this article appeared in the January–February 2021 issue of Harvard Business Review.

Required drivers of the New World Kirkpatrick Model are defined as processes and systems that reinforce, monitor, encourage, and reward performance of critical behaviors on the job. Let’s take a closer look at each driver. 

Reinforcement 

Reinforcement methods can be designed and built in advance of training. This includes job aids, reminders, refreshers, and on-the-job modules. Technology can play a major role in reinforcement tools—and solutions are becoming more personalized every day.

For example, a series of follow-up messages can be scheduled to launch automatically via email once per week. In these messages, reference key points from the learning experience, link to supplemental information, and invite people to contact you with questions or comments. Often, participants view these as personal messages as opportunities to reconnect with instructors and fellow learners.  

Monitoring 

Monitoring is all about accountability. If there is no system of accountability in place after training, even those with good intentions will give up or revert to earlier behaviors. People are conditioned by the fact that organizations monitor and report on what they think is important. This typically includes sales, profitability, customer retention, employee turnover, defective rate, scrap or waste, market share, and so forth. 

To monitor performance at Kirkpatrick Partners, we have put in place three major components: 

• Processes. We have done our best to identify and detail critical behaviors and specific tasks for each major work system and employee’s job. These are behaviors that must be consistently performed in order to achieve Level 4 Results. First and foremost, we emphasize “following the process.” 
• Wrike. A major part of our actual monitoring process is self-monitoring. This software program helps each employee manage priorities, due dates, work time, and task completion. 
• Weekly calendar. Each employee plots tasks for the coming week, depending on priorities and due dates.

On-the-job observation and work review are common occurrences at Kirkpatrick Partners. This can take the form of a team member listening in on a conference call and checking for the proper performance of critical behaviors. Meanwhile, another team member may review an out-the-door packet that a co-worker has created for one of our Kirkpatrick Certified Facilitators.
Team members are another important part of the formal and informal peer-to-peer monitoring process. During daily team meetings, for example, a team member may present a step-by-step review of an upcoming event so co-workers can check for accuracy and completeness.

Supervisory review is the final piece of the monitoring package. This typically occurs during one-on-one touch point meetings between managers and employees to review task status and process compliance. The key here is that much of the monitoring and accountability has already taken place through other processes.

Encouragement 

Hopefully, encouragement occurs on the job all the time. But you will want to plan concrete ways for it to occur more formally and regularly to support the transfer of critical behaviors.

For complex or largely new behaviors, you might want consider assigning a formal coach or mentor. Clearly, this is only practical in situations when the critical behaviors are important to organizational success or complicated enough that the learner may struggle to perform post-training. Keep in mind that this sort of observation and coaching advice from leaders needs to be specific and include a mix of formal and informal feedback and praise.

In addition, some organizations are turning to peer coaching and mentoring programs, in large part because managers have multiple priorities vying for their time. More importantly, the peer coaching approach can be a powerful motivator, and some employees tend to become complacent if they are always waiting for a “pat on the back” from managers. Indeed, at Kirkpatrick Partners, we strongly believe that encouragement doesn't just have to come from the boss.  

Rewards 

As it relates to training and performance, a broad view of rewards is often beneficial—so you are not beholden to financial realities of a volatile economy or budget.

At the formal or extrinsic level, find out from managers (and perhaps HR) whether the existing reward system is compatible with what learners will be required to do on the job. For example, you would not want to train sales professionals to follow a specific call schedule and sales call outline, but then allow them to earn a bonus even when they fail to adhere to the schedule and script. Doing so would send an overall message that the critical behaviors are not critical at all; they are optional.

On an informal level, training designers can work with managers to develop equally important rewards for learners who perform critical behaviors reliably, and disincentives for those who do not. Examples include:

• department-wide casual dress days 
• small prizes like movie tickets or gift cards for coffee shops and lunch locations 
• early dismissal on Fridays 
• recognition in the company newsletter, bulletin board, intranet, or website 
• trophies, plaques, or awards that circulate on a daily, weekly, or monthly basis.

Our belief at Kirkpatrick Partners is that "rewards" take many shapes, and it is important to find out what forms individual employees prefer. In addition to tangible rewards, sometimes just having someone notice and mention good performance is even more meaningful than any particular tangible reward. For example, a manager from another department could say, "Charlie, I noticed that you stayed late last week to get the order packed and shipped on time. I really appreciate it, and the customer has already called to thank us for our prompt service."
To learn more about the required drivers of the New World Kirkpatrick Model, order our new book Kirkpatrick's Four Levels of Training Evaluation. This book is a comprehensive blueprint for implementing the model in a way that truly maximizes your business's results.