.• ~GE IS GOOD, BUT DOLLARS ARE BETTER 

So what about compensation in this constantly changing environment? Here are some factors 
to consider as pay -- as it inevitably will -- moves from controlled, stable and fixed dollars to 
pay that varies with success and results: 
•	Make sure your program is integrated with your business strategy 
	- 	Design it to focus employees on areas critical to organization survival and success by 
rewarding results employees can influence 
- Be sure the plan and the process reflect your culture and values 
- Focus on the customer, both external and internal. Use some element of your total pay 
program to rec::ognize and reward customer service and satisfaction. 
•	Make sure the program is cost-effective. If your company is squeezing out profit margins to 
survive, participate in that effort by maintaining or reducing fixed compensation costs. 
•	Don't be stingy. If you want outstanding results, pay outstanding rewards. 
•	Employees typically feel the results of the downside of performance. It is equally important 
that they benefit on the upside. 
•	Don't expect perceptions to change overnight. Traditional systems have been around a 
long time. Changing to a variable pay philosophy is not a short-term project. 
•	Be prelfared to spend time and effort to train and educate managers and employees, 
alleviate their fears, and gain understanding, acceptance, and credibility for any new 
approaches 
	- 	Do this through clear, ongoing communications. These messages must reinforce the 
link between the company's ability to achieve business goals and succeed in the 
marketplace and its ability to support an effective compensation plan. 
•	Above all, inspire. Do whatever you need to do to get people excited and focused on 
improving performance and results 
	- 	Make the program important. Publicize it, promote it, market it. Make sure everyone 
knows and understands its importance to them and to the organization. 
There is much talk today about compensation. Much of the talk centers on the motivational 
impact of pay and incentives. While motivation is, of course, a key element, as we have 
reviewed, there are other catalysts pushing organizations to change the way they pay 
employees. Not the least of these is the critical need to vary cost structures. For most 
organizations, compensation is the largest element of operating costs. If business dictates a 
reduction in costs, companies are forced to reduce labor costs by layoffs and downsizings. 
However, many organizations are changing the way they view people and pay -- away from 
traditional, cost-of-doing-business programs to programs that focus employees on improving 
business performance and rewarding them for their contributions. 
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