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Incentive Pay

The HR I.Q. Test: March ’10


Test your knowledge of recent trends in employment law, comp & benefits and other HR issues with our monthly mini-quiz …

Try 2 bonus tactics suited for tough times


After two years of painful payroll reductions, there’s enough light at the end of the recessionary tunnel for some employers to begin considering pay raises. But in a volatile economy, implementing performance incentives and bonus plans is easier said than done. Experts say two tactics can help HR pros create variable pay plans that strike a balance between risk, reward and fiscal stability.

Do we have to pay bonuses to employees who quit before the normal payout date?


Q. Our company pays out bonuses in the year after the work is completed, sometimes late into the first quarter. If an employee resigns before the bonus payout date (say, in February), do we have to pay a bonus to that employee?

Is it legal in North Carolina to withhold bonuses not paid at the time of termination?


Q. May we include a provision in our bonus plan for North Carolina employees that they will forfeit any bonus that has not been paid at the time of termination?

3 variable pay trends help weather recession


By focusing sales compensation on what matters most, successful companies are offering up lessons on variable pay from which every compensation pro can learn. Struggling to make variable pay work for your organization? Pay attention to these sales compensation trends that just might apply in your organization:

OK to withhold commissions from employees who violate fiduciary obligations


The Texas Payday Act allows employees to sue for commissions earned but unpaid after termination. But that doesn’t mean that employees are always owed such commissions. If they violated their fiduciary duty to their employers by disclosing confidential information to a competitor, it’s legitimate to withhold pay.

Bonuses at high school sports governing body violate policy


The tax-exempt North Carolina High School Athletic Association apparently violated University of North Carolina policy when it paid bonuses to its managers. The association administers high school sports throughout the state. From 1999 to 2008, the association paid out $239,133 in bonuses to managers and $7,820 to nonmanagement staff. The employees won’t have to return the money.

OK to tie incentives to continued employment


The Supreme Court of California has ruled that employers are free to develop incentive payment plans that reward loyalty by requiring employees to stay for a period of time before earning the full benefit.

Companywide bonuses take wing at American Airlines


Business and vacation travel may be down, but American Airlines says customer satisfaction is up—and is rewarding about 71,000 employees for making it happen. The Fort Worth, Texas-based airline awarded $10.6 million—about $150 per employee—to staffers who helped the organization achieve its fourth-quarter 2009 customer satisfaction goals.

Double-check all commission agreements! You could be liable for more than you think


If you pay commissions under a written compensation plan that covers commissions earned only while the employee works for your company, be careful how you handle terminations—and discussion concerning payment of further commissions. In some circumstances, you could inadvertently create additional liability for unpaid commissions …