Incentive Pay Practices: Nonprofit/Government Organizations A Report by WorldatWork and Vivient Consulting February 2016 About WorldatWork® – The Total Rewards Association WorldatWork (www.worldatwork.org) is a nonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards – strategies to attract, motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide comprehensive education, certification, research, advocacy and community, enhancing careers of professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has more than 65,000 members and subscribers worldwide; 80 percent of Fortune 500 companies employ a WorldatWork member. Founded in 1955, WorldatWork is affiliated with more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington, D.C. Contact: WorldatWork Customer Relations 14040 N. Northsight Blvd. Scottsdale, Arizona USA 85260-3601 Toll free: 877-951-9191 Fax 480-483-8352 [email protected] WorldatWork Society of Certified Professionals® is the certifying body for six prestigious designations: the Certified Compensation Professional® (CCP®), Certified Benefits Professional® (CBP), Global Remuneration Professional (GRP®), Work-Life Certified Professional® (WLCP®), Certified Sales Compensation Professional (CSCP)™ and Certified Executive Compensation Professional (CECP)™. The WorldatWork group of registered marks also includes: Alliance for Work-Life Progress or AWLP, workspan and WorldatWork Journal. About Vivient Consulting Since 2002, Vivient Consulting has provided independent compensation expertise to board compensation committees, chief executive officers and human resource professionals. Vivient works with public and private companies, and non-profit organizations. Clients represent many different industries, sizes and stages of growth. The firm’s partners deliver high-quality solutions in the areas of compensation strategy, executive and board pay, incentive-compensation plan design and communications. For more information about this study, [email protected] or (847) 636-8919. contact Bonnie Schindler at ©2016 WorldatWork Any laws, regulations or other legal requirements noted in this publication are, to the best of the publisher’s knowledge, accurate and current as of this report’s publishing date. WorldatWork is providing this information with the understanding that WorldatWork is not engaged, directly or by implication, in rendering legal, accounting or other related professional services. You are urged to consult with an attorney, accountant or other qualified professional concerning your own specific situation and any questions that you may have related to that. No portion of this publication may be reproduced in any form without express written permission from WorldatWork. METHODOLOGY In November 2015, Vivient Consulting and WorldatWork invited a sample of WorldatWork’s nonpublicly traded members to answer an online survey about their incentive pay practices. More than 125 nonprofit and government organizations responded to the survey, as did 200 private for-profit companies. The survey results for the private for-profit companies appear in a separate report. Of the respondents, 70% are nonprofits, such as charitable and education organizations. The remaining 30% are public-sector organizations, such as state, local and federal government entities. The most common industries represented in the survey are health care and social assistance (29%); educational services (15%); public administration (14%); finance and insurance (12%); and consulting, professional, scientific and technical services (10%). The size of nonprofit and government organizations responding to the survey tends to be large. Of the respondents, 75% have more than 1,000 full-time equivalent (FTE) employees. Organizational budgets range from more than $20 billion to less than $100 million. About half of the respondents reported budgets of more than $1 billion, and onethird reported budgets of $100 million to $1 billion. This report provides a high-level summary of the survey results. For detailed results, including the sample size by question, please see the Detailed Survey Results section beginning on page 9. WorldatWork and Vivient Consulting | 1 “Incentive Pay Practices: Nonprofit/Government Organizations” OVERVIEW U.S. nonprofit and government organizations continue to make significant use of short-term cash incentives to motivate and reward employees, according to the 2016 Vivient Consulting and WorldatWork survey of incentive compensation programs at these organizations. Shortterm cash incentives are more prevalent at nonprofits than at government organizations, and the incentive budgets are larger. Long-term incentive usage continues to be rare at both types of organizations. The incentive compensation survey was first conducted in 2007 and targeted private companies. It was conducted again in 2011, where nonprofit and government participation grew. In 2013, Vivient and WorldatWork created a special report for these organizations because of the increasing interest in incentive pay practices. This is the second iteration of that report. Short-term incentive (STI) and long-term incentive (LTI) usage have remained steady at nonprofits and government organizations over the past two years. Graph 1 Short- and Long-Term Incentive Prevalence 100% 2015 2013 77%78% 75% 50% 16%16% 25% 0% Short-term Long-term Nonprofits are more likely to use STIs than government organizations, but the practice is prevalent across both organization types. The prevalence of STIs is driven by the need to compete for talent with public and private companies. Graph 2 STIs by Organization Type 2015 100% 2013 86%82% 67% 55% 75% 50% 25% 0% Nonprofit Government LTIs continue to be used sparingly at nonprofits. Nonprofits may still use pension plans and other retirement plans to provide the retention hook that LTIs offer for public and private companies. As in 2013, only one government respondent reported an LTI plan. WorldatWork and Vivient Consulting | 2 “Incentive Pay Practices: Nonprofit/Government Organizations” SHORT-TERM INCENTIVES promises, and are not guaranteed. Nonprofit and government organizations favor simplicity by offering a limited number of STI plans. Of the respondents, more than 75% reported having three or fewer STI plans in place. • Spot awards: Awards that recognize special contributions, as they occur, for a specific project or task. The project or task is usually accomplished over a short time period. • Profit-sharing plan: A plan providing for employee participation in an organization’s profits or surplus. The plan normally includes a predetermined and defined formula for allocating funds among participants, and for distributing funds accumulated under the plan. However, some plans are discretionary. • Team/small-group incentives: Any incentive program that focuses on the performance of a small group, usually a work team. These incentive programs are often used when measurable output is the result of group effort and individual contributions are difficult to separate from group effort. • Project bonus: A form of additional compensation paid to an employee or department as a reward for successfully completing a specific project within a certain timeframe. Graph 3 Number of STI Plans at Organizations with an STI Plan 4% 6% 5% 10% 2% 11% 8% 5% Number of STI Plans 11+ 6-10 5 4 2015 2013 27% 19% 27% 24% 27% 25% 3 2 1 0% 20% 40% 60% For 2015, the survey asked participants whether they had any of the following six types of STI plans: • • Annual incentive plan (AIP): A pay plan designed to reward the accomplishment of specific results. Rewards usually are tied to expected results identified at the beginning of the performance cycle. In contrast to bonuses, they are not primarily discretionary but may have a discretionary component. Discretionary bonus plan: A plan in which management determines the size of the bonus pool and the amounts to be allocated to specific individuals after a performance period. These plans have no predetermined formula or By far, the most common type of STI plan at nonprofit and government organizations is an annual incentive plan (AIP). Graph 4 WorldatWork and Vivient Consulting | 3 “Incentive Pay Practices: Nonprofit/Government Organizations” STI Prevalence at Organizations with an STI Plan 86% 76% AIP 51% 42% 45% 40% Spot awards Discretionary 17% 23% 14% 21% 5% 2% Team/group Project bonus Profit-share 0% have increased significantly. The nonprofit STI budgets are starting to approach the levels reported by the private, for-profit organizations. This increase is driven by the need to recruit and retain the top talent required to operate the underlying business of the nonprofit organization. Graph 6 2015 2013 50% 100% 12% Respondents provided their organizations’ approximate spending for STIs as a percentage of operating budget for 2015 and projected spending for 2016. Reported STI budgets increased significantly since the survey was last conducted. Graph 5 STI Budget/Spend as a Percentage of Operating Budget 12% 2016 (Proj.) 2015 2013 10%10% 10% 8% 6% 5% 3% 3% 4% 1% 2% 2016 Projected STI Spending as a Percentage of Operating Budget: Government vs. Nonprofit 11.0% Government 10% Nonprofit 8% 6% 4% 4.5% 3.0% 1.3% 2% 0.9% 1.0% 0% 75th Percentile Median 25th Percentile Annual Incentive Plans The most prevalent STI plan at nonprofit and government organizations, the AIP, is usually available to employees at the exempt salaried level and above. About half of nonexempt employees are eligible for AIP awards. 1%1% 0% 0% 75th Percentile Median 25th Percentile When STI spending is broken down by organization type, the data show that nonprofit incentive levels are driving the increased expenditures and budgets. The following graph depicts projected government and nonprofit incentive spending for 2016 as a percentage of operating budget. Government budgets remain modest, while nonprofit budgets WorldatWork and Vivient Consulting | 4 “Incentive Pay Practices: Nonprofit/Government Organizations” Graph 7 Graph 8 2015 AIP Eligibility for Organizations with AIPs in Place AIP Effectiveness at Achieving Objectives 50% 2015 80% CEO 40% Other Executives 90% 30% Managers/ Supervisors 70% 20% 65% Exempt 0% 50% 27% 28% 32% 22% 18% 17% 16% 10% 52% Nonexempt 2013 38% 2% 1% 0% 100% The respondents with AIPs in place reported on the primary objectives of their plans. The most common objectives were to: 1. Reward employees (65% of respondents). 2. Focus employees on specific goals (62%). 3. Align employees’ incentives with short-term goals (55%). Participants were asked to rate the effectiveness of their AIPs. More than 80% of nonprofit and government organizations said their AIPs were moderately effective to effective, indicating continuing organizational satisfaction with these incentive plans. 1 effective 2 3 4 5 not effective In addition, nonprofit and government organizations found their incentive plans to be more effective than those at their private-company counterparts, as reported in the sister survey of for-profit organizations. Plan elements cited most often as AIP strengths were: AIP Strengths Type of performance measures Performance linkage (corporate, unit, individual) Goal setting Level of award opportunity 79% 75% 62% 56% Plan elements cited most often as AIP weaknesses were: AIP Weaknesses Risk-reward trade-off Level of discretion Plan communication 73% 62% 61% The results indicate that nonprofit and government organizations largely view their AIPs as successful, particularly with regard to the performance measured, the award opportunities WorldatWork and Vivient Consulting | 5 “Incentive Pay Practices: Nonprofit/Government Organizations” available to participants and how goals are set. AIP improvement opportunities exist for payouts relative to results, use of discretion and plan communication. Most nonprofit and government organizations specify a maximum cash payment, or cap, in their AIPs. Similarly, most organizations specify threshold, target and maximum awards for participants. The most typical threshold level is 50% of target, while the most typical maximum payout level is 150% of target. Nonprofit and government organizations employ a wide variety of performance measures in their AIP plans and use different methods to combine the measures. Just over half of the organizations rely on four to six performance measures, while a quarter rely on one to three measures. Graph 9 the number of performance measures used in 2015, suggesting a trend toward simplification. Organizations that use more than one measure must combine those measures in some way to generate an AIP award. Approaches to combining measures vary, but most organizations either use a balanced-scorecard approach or calculate performance separately for each measure. Combining Measures to Calculate AIP Awards Method Description Financial and Balanced 40% operational Scorecard Additive Variation by Participant Number of Measures Used in AIPs 10+ 3% Multiplicative 7-9 15% 1-3 27% One Measure 4-6 55% Other Nonprofit and government organizations continue to use more measures than their for-profit counterparts, implying a more holistic approach to performance measurement and incentive awards. However, a number of nonprofit and government organizations did reduce measures are balanced. Performance is calculated separately for each measure. Different measures are used for different plan participants. Certain measures are used as modifiers to increase or decrease the award. Only one measure is used. Variation by plan or individual and discretion are two methods. 28% 10% 8% 8% 5% Survey participants were asked which AIP performance measures they use with regard to three different categories: financial, operational and individual. Nonprofit and government organizations favor operational measures over financial measures. Customer satisfaction was the most widely used operational measure, with WorldatWork and Vivient Consulting | 6 “Incentive Pay Practices: Nonprofit/Government Organizations” service/quality a close second. Nearly one-quarter of respondents reported using “other” operational measures, so organizations are using a variety of distinct measures that fit their unique needs and goals. Operational Measures Customer satisfaction Service/quality Operational efficiency Employee satisfaction/ engagement scores Safety/occupational injury Other operational objectives 53% 48% 43% 25% 13% 23% With regard to financial measures, revenue and revenue growth replaced measures of surplus, revenue over expenses or income as the most widely used financial measures in this year’s survey. Financial Measures Revenue/revenue growth Measures of surplus, revenue over expenses or income Cash flow/cash-flow growth A return measure (return on equity, assets or investments) Other financial 48% 38% 8% 7% about two-thirds of nonprofit and government organizations continued to report that their plans used some level of subjectivity in AIP award decisions. Respondents view the use of discretion as both a strength and weakness. Positive aspects include who applies the discretion, and the amount subject to discretion. Discretion also provides a useful mechanism to incorporate qualitative performance measures. This is particularly important in nonprofit organizations, as many evaluate how well they achieved their missions. The negative aspects of discretion are communication of the rationale for its use, perception of the fairness for payouts and consistency of use across the organization. These findings indicate that communicating the discretionary elements of STIs should be an area of focus for nonprofit and government organizations in 2016. As was the case in 2013, approximately two-thirds of the respondents with AIPs fund their plans using a pool established at the organization level based on financial and/or strategic goals. Graph 10 Method of Funding AIP Pool 17% Individual objectives are also widely used. About 40% of the organizations use performance ratings as the basis for AIP awards, while another 40% use achieving specific individual goals to help determine incentive awards. AIP performance targets at nonprofit and government organizations are typically based on budgets, improvement over prior year, management discretion and achievement of milestones. In 2015, Financial formula at division, unit or group level 10% Sum of each individual’s target 14% Discretion 7% Other 3% Financial formula at org. level 66% WorldatWork and Vivient Consulting | 7 “Incentive Pay Practices: Nonprofit/Government Organizations” LONG-TERM INCENTIVES SUMMARY Long-term incentive (LTI) plans are scarce at nonprofit and government organizations, with only 16% of organizations reporting an LTI plan. The only types of LTI plans reported were performance awards, which include long-term cash and performance units: A final question asked participants to select the top three tools besides incentive pay that they found effective in retaining top talent. The most prevalent responses were job advancement and promotion, retirement plans, additional base pay and flexible work arrangements. • • Long-term cash plan: Cash awards where payment is contingent on performance as measured against predetermined financial or strategic objectives over a multiyear period of time (typically three years). Performance units: Grants of dollar-dominated units with value that is contingent on performance against predetermined objectives over a multiyear period of time. Government organizations rely on retirement plans as a long-term component of compensation, as do nonprofits to a lesser degree. It will be interesting to see if more nonprofits adopt long-term performance award plans — which are basically multiyear bonus plans — in the future. Graph 11 Retention Tools for Top Talent 70% Advancement Retirement plan 49% Additional base pay 48% Flexible work arrangements Developmental assignments 45% 20% 17% Additional benefits 10% Specialized training 1% Additional perqs 0% 50% 100% Job advancement was by far the most prevalent and important tool, which reinforces the old adage that workplace rewards are not all about compensation. Employees want to learn and grow in their jobs, and be recognized for their efforts. WorldatWork and Vivient Consulting | 8 “Incentive Pay Practices: Nonprofit/Government Organizations” INCENTIVEPAYPRACTICESSURVEY:NONPROFIT/GOVERNMENTORGANIZATIONS DETAILEDSURVEYRESULTS (DataeffectiveasofDecember2015) Yourorganizationis: Nonprofit,not-for-profit Publicsector,government 89 70% 38 30% N= 127 SHORT-TERMINCENTIVES 1.Doesyourorganizationhaveashort-termincentiveprogram? Yes No 97 77% 29 23% N= 126 Onlyparticipantsanswering"yes"inQuestion1receivedthefollowingshort-termincentive programquestions. 2.Howmanyshort-termincentiveprogramsdoesyourorganizationhave? One Two Three Four Five Sixto10 11ormore 26 26 26 8 2 5 4 N= 27% 27% 27% 8% 2% 5% 4% 97 83 49 43 16 13 5 N= 86% 51% 45% 17% 14% 5% 96 3.Whichtypesofshort-termincentiveplansdoesyourorganizationuse?(Selectall thatapply.) Annualincentiveplan(AIP) Spotawards Discretionarybonus Team/small-groupincentives Projectbonus Profit-sharingplan Blank 31 WorldatWork and Vivient Consulting | 9 “Incentive Pay Practices: Nonprofit/Government Organizations” 4.Isyourorganizationplanningtoaddashort-termincentiveplanormodifyashort-term incentiveplanfor2016? No Yes 74 76% 23 24% N= 97 4a.Ifyes,whatpromptedtheadditionormodification?(Selectallthatapply.) Changeinstrategyoralignmentwithstrategicplan Regularannualreviewandupdateoftheplan(s) Alignmentofprogramswithmarketpractices Changeinbusinessresults Companygrowth Reorganization Newownership/management Changesduetoregulatoryrequirements Other Strengthenpayforperformance Gaincompetitiveadvantage Blank 104 15 11 7 4 3 2 1 0 2 65% 48% 30% 17% 13% 9% 4% 0% 9% N= 23 4b. If you're modifying a plan, what changes are being implemented? (Select all thatapply.) Addingoneormoreperformancemeasures Eliminatingoneormoreperformancemeasures Raisingperformancegoals Increasingtargetawardlevels Removingparticipantsfromtheplan Addingparticipantstotheplan Increasingtheuseofdiscretioninincentivepayouts Wideningtheincentivepayoutzone Decreasingtargetawardlevels Reducingtheuseofdiscretioninincentivepayouts Loweringperformancegoals Narrowingtheincentivepayoutzone Other Eliminatingplans Improvinggoalsandtargets Blank 104 9 9 8 5 5 4 4 3 3 1 1 0 3 39% 39% 35% 22% 22% 17% 17% 13% 13% 4% 4% 0% 13% N= 23 WorldatWork and Vivient Consulting | 10 “Incentive Pay Practices: Nonprofit/Government Organizations” 5.Whatisyourorganization’sapproximatetotalannualbudget/spendingforshort-term incentives,expressedasapercentageofoperatingincome?(Operatingincomeisearnings beforeinterestandtaxes,orEBIT.Nonprofitsshouldusenetsurplus,orrevenueminus expenses.) 2015 2016(expected) Percentile 25th Median 75th Blank 1% 3% 10% 54 1% 3% 10% N= 73 AnnualIncentivePlans Onlyparticipantsselecting"annualincentiveplan"inQuestion3receivedthefollowing section.Responsesinthissectionarebasedontheannualincentiveplaninwhichmost ofanorganization'semployeesparticipate. 6.Pleaseindicatewhichofthefollowingpositionsareeligibleforannualincentivesin2015. CEO Otherexecutives/officers Managers/supervisors Exemptsalaried Nonexemptsalariedandhourly Blank 67 48 54 42 39 31 N= 80% 90% 70% 65% 52% 60 7.Whatarethetopthreeprimaryobjectivesofyourannualincentiveplan?(Selectupto three.) Rewardemployees. Focusemployeesonspecificgoals. Alignemployees’incentiveswithshort-termgoals. Becompetitivewithotheremployers. Sharetheorganization’sfinancialsuccesswithemployees. Retainemployees. Providespecialrecognition. Recruitqualifiedemployees. Other Blank 67 39 37 33 23 13 13 7 4 1 N= 65% 62% 55% 38% 22% 22% 12% 7% 2% 60 WorldatWork and Vivient Consulting | 11 “Incentive Pay Practices: Nonprofit/Government Organizations” 8.Onascaleof1to5,howeffectiveisyourannualincentiveplanatachievingitsobjectives? 1Effective 2 3 4 5Noteffective 13 16 19 11 1 N= 22% 27% 32% 18% 2% 60 9.Pleaseclickanddragthefollowingincentive-planelementstotheappropriate“Strength” or“Weakness”box. Typeofperformancemeasures Performancelinkage(corporate,unit,individual) Goalsetting Levelofawardopportunity Plancommunication Levelofdiscretion Risk-rewardtrade-off Strength 79% 75% 62% 56% 39% 38% 27% Weakness 21% 25% 38% 44% 61% 62% 73% N= 56 55 52 57 56 52 44 10. How often are incentives paid during the year? (Select all that apply.) Annually Quarterly Twiceayear Other Acombinationofways Adhoc Monthly Twiceamonth Blank 67 54 90% 2 3% 0 0% 7 12% N= 60 11.Doesyourincentiveplanspecifyamaximumcashpayment(i.e.,acap)forindividualsin theplan? Yes No 48 83% 10 17% N= 58 WorldatWork and Vivient Consulting | 12 “Incentive Pay Practices: Nonprofit/Government Organizations” 12.Doesyourorganization’sincentiveprogramspecifythreshold,targetand/ormaximum awardsforparticipants? Yes 64% 80% 77% Threshold Target Maximum No 36% 20% 23% N= 59 59 60 13.Whatisyourthresholdpayoutlevel? 25%oftarget 50%oftarget 75%oftarget 80%oftarget Nothresholdintheplan Other Otheramountsnotlistedabove Variesbyplan 5 13% 20 53% 3 8% 2 5% 2 5% 6 16% N= 38 14.Whatisyourmaximumpayoutlevel? Thetargetisthesameasthemaximum 120%oftarget 125%oftarget 150%oftarget 200%oftarget 300%oftarget Nomaximumintheplan Other Fixeddollaramount Variesbyplan Variesbyposition 5 1 6 23 6 0 1 4 11% 2% 13% 50% 13% 0% 2% 9% N= 46 15.Howmanyperformancemeasuresareusedinyourannualincentiveplan? Onetothree Fourtosix Seventonine 10ormore 16 33 9 2 N= 27% 55% 15% 3% 60 WorldatWork and Vivient Consulting | 13 “Incentive Pay Practices: Nonprofit/Government Organizations” 16.Whichofthefollowingperformancemeasuresareusedinyourincentiveplan?(Selectall thatapply.) N= 60 FinancialObjectives Revenue/revenuegrowth Measuresofsurplus/revenueoverexpenses/income Cashflow/cash-flowgrowth Areturnmeasure(returnonequity,assetsorinvestment) Otherfinancialobjectives Investmentfundperformance Marketshare Netassets Performanceagainstbudget OperationalObjectives Customersatisfaction Service/quality Operationalefficiency Employeesatisfaction/engagementscores Safety/occupationalinjury Otheroperationalobjectives Compliance Enhancedreputation Enrollment Membershipgrowth Progresstowardgoals Projectcompletion Turnover IndividualObjectives Overallindividualperformance,perhapsasexpressedinaperformancerating Achievementofspecificindividualgoals Otherindividualobjectives 29 48% 23 38% 5 8% 4 7% 10 17% 32 29 26 15 8 14 53% 48% 43% 25% 13% 23% 25 42% 24 40% 2 3% Typicalnumberofindividualgoalsreported: Only15participantsrespondedtothisquestion,soresultscan'tbereported becauseofinsufficientdata. WorldatWork and Vivient Consulting | 14 “Incentive Pay Practices: Nonprofit/Government Organizations” 17.Howaredifferentmeasuresusedtogetherinyourincentiveplan? Abalancedscorecardapproachisused. Awardsarepaidforperformanceineachmeasure. Differentmeasuresareusedfordifferentparticipants. Certainmeasuresareusedasmodifierstoincreaseordecreasetheaward. Onlyonemeasureisused. Other 24 17 6 5 5 3 N= 40% 28% 10% 8% 8% 5% 60 18.Whatbasisdoesyourorganizationusetosetperformancetargets?(Selectallthatapply.) Budget Improvementoverprioryear Managementdiscretion Achievementofmilestones Formula Fixedstandard Relativepositiontopeers Other Blank 69 39 22 17 16 11 10 5 1 N= 67% 38% 29% 28% 19% 17% 9% 2% 58 19.Whatisthelinkageforyourannualincentiveprogrambyposition?Incentivesfor individualsintheemployeecategoryarebasedon: CEO Executive/officer Managers/supervisors Exemptsalaried Nonexemptsalariedandhourly Organization Division/ Individual Performance UnitPerf. Performance 96% 21% 42% 84% 48% 54% 73% 48% 58% 57% 36% 69% 61% 27% 61% N= 53 56 48 42 33 20.Howmuchdoessupervisordiscretionorsubjectivityplayaroleinyourincentiveprogram? Significantly Somewhat Toalesserdegree Notatall 12 16 11 19 N= 21% 28% 19% 33% 58 WorldatWork and Vivient Consulting | 15 “Incentive Pay Practices: Nonprofit/Government Organizations” 21.Ifdiscretionisused,pleaseassessitseffectivenessbyclickinganddraggingthefollowing elementstotheappropriate"Strength"or"Weakness"box. Whoappliesthediscretion Amountsubjecttodiscretion Mechanismtoincorporatequalitativeperformance Consistencyofuseacrosstheorganization Perceptionoffairnessforpayouts Communicationofrationalefordiscretion Strength 70% 67% 57% 35% 30% 29% Weakness 30% 33% 43% 65% 70% 71% N= 33 33 30 37 33 34 22.Howisyourincentiveplanfunded? Financiallybasedformulaatthecorporatelevel Sumofeachindividual’starget Financiallybasedformulaatthedivision,unitorgrouplevel Discretionaryfunding Other 39 8 6 4 2 N= 66% 14% 10% 7% 3% 59 23.Whatmethodsdoyouusetocommunicateyourincentiveplan?(Selectallthatapply.) Writtenplandocumentviaindividualemailorinternalcompanywebsite Annualcommunicationbycompanyofperformancetargets,linkstostrategy Verbaldescriptionbyhumanresourcesorsupervisorthroughindividual communications Periodicupdatesonprogressbycompany Company/teammeetings(inpersonorvirtual)toreviewincentiveplaninfo Nomethodofcommunication(notcommunicated) Other Blank 68 39 66% 34 58% 33 56% 27 46% 22 37% 4 7% 2 3% N= 59 LONG-TERMINCENTIVES 24.DoesyourorganizationhaveanLTIplan? No Yes 84 84% 16 16% N= 100 Onlyparticipantsanswering"yes"inQuestion24receivedthefollowinglong-termincentive questions. WorldatWork and Vivient Consulting | 16 “Incentive Pay Practices: Nonprofit/Government Organizations” 25.Whichtypesoflong-termincentiveprogramsdoesyourorganizationoffer?(Selectall thatapply.) Long-termcashplans Performanceunits Performanceshares Phantomstock Restrictedstock Stockappreciationrights(SARs) Stockoptions Blank 111 11 69% 5 31% 0 0% 0 0% 0 0% 0 0% 0 0% N= 16 GENERAL 26.Beyondincentivepay,pleaseselectthetopthreerewardstoolsthatyourorganization hasfoundeffectiveinretainingtoptalent. Jobadvancement/promotion Retirementplan Additionalbasecompensation Flexibleworkarrangements Developmentaljobassignments Additionalbenefits Specializedtraining Additionalperquisites Other Organizationalculture Blank 28 69 49 48 45 20 17 10 1 3 70% 49% 48% 45% 20% 17% 10% 1% 3% N= 99 WorldatWork and Vivient Consulting | 17 “Incentive Pay Practices: Nonprofit/Government Organizations” DEMOGRAPHICS 27.Underwhichindustrydoesyourorganizationfall? Healthcare&socialassistance Educationalservices Publicadministration Finance&insurance Consulting,professional,scientific&technicalservices Utilities,oil&gas Otherservices(exceptpublicadministration) Transportation Realestate&rental&leasing Accommodations&foodservice Admin.&support&wastemanagement&remediationservices Agriculture,forestry,fishing&hunting Allothermanufacturing(37) Arts,entertainment&recreation Computer&electronicmanufacturing Construction Information(includespublishing,ITtechnologies,etc.) Managementofcompanies&enterprises Mining Pharmaceuticals Retailtrade Warehousing&storage Wholesaletrade 29 15 14 12 10 8 6 4 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N= 29% 15% 14% 12% 10% 8% 6% 4% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 100 WorldatWork and Vivient Consulting | 18 “Incentive Pay Practices: Nonprofit/Government Organizations” 28.Howmanyfull-timeequivalent(FTE)employeesdoesyourorganizationhave? 100,000ormore 40,000to99,999 20,000to39,999 10,000to19,999 5,000to9,999 2,500to4,999 1,000to2,499 500to999 100to499 Fewerthan100 2 4 8 13 10 13 25 13 8 4 N= 2% 4% 8% 13% 10% 13% 25% 13% 8% 4% 100 5 1 2 4 11 24 11 21 14 7 N= 5% 1% 2% 4% 11% 24% 11% 21% 14% 7% 100 29.Whatisyourorganization’sannualrevenue/budget? Morethan$20billion $15billionto$19.9billion $10billionto$14.9billion $5billionto$9.9billion $2.5billionto$4.9billion $1billionto$2.49billion $500millionto$999million $100millionto$499million Lessthan$100million Don'tknow WorldatWork and Vivient Consulting | 19 “Incentive Pay Practices: Nonprofit/Government Organizations” Participating Organizations AAA National Office Affinity Health Plan AlloSource American Red Cross Arapahoe County Government Ascension Health Blue Cross Blue Shield of Minnesota Brown University Cape Cod Healthcare Inc. Choctaw Nation of Oklahoma City of Naperville City of Seattle Clemson University County of Kent Delta Dental Plan of Michigan Denver Public Schools Economic Resources Corp. EmblemHealth Emory Healthcare Employers Resource Association Energy Northwest Fallon Health Federal Housing Finance Agency Fiat Chrysler Automobiles LLC Geisinger Health System General Board of Pension and Health Benefits of The UMC Harrisburg Area Community College Idaho National Laboratory Indiana State University IRC JEA Lancaster General Health LL Global MaineGeneral Health Maricopa County Maryland Department of Transportation Memphis Light, Gas and Water Milwaukee County MidMichigan Health Mountain America Credit Union MRA - The Management Association Northwestern University NRUCFC NSF International OhioHealth Omaha Public Power District Orange County Transportation Authority Oregon Health & Science University Otterbein Homes Port of Seattle Princeton University Providence Health & Services Provincial Government of BC Salt River Project Security Service Federal Credit Union Spectrum Health SRC Inc. St. Mary's Hospital Madison State of New Mexico Summa Health Sutter Health Teacher Retirement System of Texas Texas Mutual Insurance The Johns Hopkins U/Applied Physics Laboratory The University of Alabama at Birmingham The University of Texas Health Science Center at San Antonio UMass Memorial Health Care Union County Local Government University of Dayton University of Notre Dame University of Pennsylvania Village of Glenview Washington Metro Area Transit Authority Wellstar Health System WorldatWork and Vivient Consulting | 20 “Incentive Pay Practices: Nonprofit/Government Organizations”
© Copyright 2026 Paperzz