Worksheet · KPIs and Incentives Health Check
Write one page on how pay is set
When pay is whatever each person negotiated, two people in the same job are paid differently for reasons nobody can state. This sheet writes how pay is set, and applies it to the top team first. It builds the Competent step of the check:
A one-page statement says how pay is set (where the business sits against the market, the fixed and variable split by level, what the variable pays on, who decides), and the top team's pay follows it.
Step 1. The page
| Principle | Our answer |
|---|---|
| Where we sit against the market | e.g. At the median for base pay; above it only for roles we struggle to fill |
| Base pay guide by level | |
| Target bonus by level (% of base) | |
| What the bonus pays on | |
| What on-track performance pays (share of target bonus) | |
| Is there a fixed pool the bonuses must fit? | |
| What happens in a slow year | |
| Part years and promotions | |
| Who decides, and when | |
| Market data: when it is checked, and from which source |
Step 2. The top team first
| Top-team member | Pay follows the page? | If not: the exception and its reason | Logged on |
|---|---|---|---|
Step 3. The exception log
| Date | Person or role | Exception | Reason | Approved by |
|---|---|---|---|---|
Under 50 people: the page can be three lines: where you sit against the market, what any bonus pays on and who decides. In an owner-run business, the page is the owner's discipline on themselves.
Done when: the page exists, and every top-team pay decision this year follows it or sits in the log with a reason.
Adapted from our own pay and bonus method (PSP, 2013).
From the KPIs and Incentives Health Check. Your report links the sheet for each of its moves.