Abstract
While many organizations use incentive compensation bonuses to motivate employees, they are not always fully effective. This is likely due to two important factors. First, similar to other organizational systems, incentive compensation administration is complex and needs to be adjusted to the organization. Second, organizations tend to employ incentive systems based on tradition rather than evidence-based recommendations. In this article, we present 44 best practices regarding the administration of incentive compensation bonus systems (e.g., strategy, criteria, implementation, etc.). These practices emerged from a comprehensive and systematic review of the scientific research and professional practices on incentive compensation. Our aim is to provide clear and concise suggestions for how organizations can improve their incentive compensation systems.
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