Using an Incentive Compensation Plan to Achieve Your Firm's Goals

Abstract

While design professionals are in high demand, the number of available graduates in design fields is low-a 17-year low. This increase in demand, coupled with the reduction in supply, has caused design professionals to have higher salary expectations at all levels. So how does the manager of a design firm maintain competitive salaries and reward your top performers? This issue is serious because a design firm's people are its greatest asset; that is, good architects, engineers, and support staff make a good firm. In a design firm, the price of employing those good people is the biggest cost on monthly income statements. Therefore, design firms must use a tool that makes employee compensation a somewhat variable cost rather than a fixed cost. A well-constructed incentive compensation plan will allow a firm to fairly compensate its key employees based on the performance of the company. A good incentive compensation plan also will help meet both the short-term and long-term goals of the company.