Effective Executive Compensation Book Chapter 10: Short-Term Incentives

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Short-term incentives can have a tremendous impact on a total executive reward strategy—that is, if they are if they are designed correctly by someone who truly understands their function in the overall plan. Correctly used short-term incentives can create focus on short-term priorities, align rewards with business and individual performance, provide a competitive or differentiated pay package, align people costs with business results, and increase employee commitment.