Incentive Insights

摘要

Instead of increasing base pay in response to the talent shortage, an alternative approach is to provide incentives or one-off payments which only increase immediate variable remuneration costs rather than year on year fixed remuneration costs. Providing one-off payments is less likely to have a detrimental effect on internal equity and a fairly neutral impact on employee's organisational commitment - potentially increasing it in the short-term. (Talent Shortages in the NZ Market' 2021, Amy Raine for Strategic Pay) Incentives can be delivered as cash or equity (share ownership) and vary in duration from short-term (12 months) through to long term (3 years or longer). Longer term incentives have traditionally been offered to CEOs, however these are increasingly being offered to Executives and are now filtering down to selected third tier to encourage retention.