Unless you keep and disclose a reliable record of what other incentive recipients have received in the past, your new incentive recipients might have a hard time understanding what it takes to hit their maximum upside.
Oftentimes, even you cannot be sure what the result of incentive plans will be, and you may accidentally pay the person more, or less, than you’ve anticipated.
Your best bet is to choose the most predictable type of incentive plan: one that truly maps the amount of benefit to be paid to performance level—more than what is expected in the normal course of business.
You want all the stakeholders to realize the same thing you realize: working harder, smarter, and more efficiently has financial benefits.
