The Problem With Incentive Plan Cliffs

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Triggers and hurdles and cliffs, oh my!

To be clear, I’m talking about pay plan mechanics and in particular about the kind of cliff that plays an unfortunate starring role in many pay programs. Specifically, the incentive plan with the all-or-none (or nearly so) singular award hurdle, often set against prior year performance, that can throw the whole program out of whack.

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