Long live the performance culture!

The five key factors for producing variable sharing and remuneration systems

Stern Stewart & CO. GmbH
Salvatorplatz 4
80333 Munich

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No matter whether it is a question of bonuses for management level or increasing employee participation, in the current re-ignited debate on producing variable remuneration systems, a number of factors come up time and again.

The solutions are seldom convincing, and this is not merely attributable to the emotionally driven debates: what is even worse is that the proposed solutions generally address only partial aspects of the problem, and/or are politically motivated to such an extent that the ultimate goal – namely, the value creation for the company and therefore sustainable improvement in its competitiveness – is lost from view.

Too seldom are the incentive effects of the system on a practiced performance culture and its medium-term impact on the cost structure considered from the global company perspective. In this study, we consider the five key factors for producing variable remuneration and sharing systems, and show, using specific examples, how such systems must be constituted in order to sustainably enhance the value of the company.

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