The critical issue is that we select those rewards that best encourage the attitudes and performance we need to promote in working towards our vision. What we personally recognize as important by our words and actions will speak the loudest to our team. We can't give enough trips or savings bonds to encourage something we discourage by our words or actions. We can preach thrift and economy until the cows come home, but if our personal lifestyle isinconsistent with those values, or if our corporate lifestyle reflects other values as more important to us, not only will our preaching be in vain, we will be seen as a hypocrites. As leaders, we must always be aware that we set the standard by what we do, not what we say.
Compensation is the most fundamental component of our reward system.
How we pay, and what we pay our team for, is the foundation for all other manifestations and variations of rewards. We will include all fringe benefits along with bonuses and rewards in the category of incentives. Basically, our base pay should be the competitive pay rate for a particular job classification, plus a little. We want to be at or slightly above market if possible. This rate is established by the law of supply and demand and pay is pretty much equivalent to what we must pay in order to acquire specific skills, knowledge and experience.