Tailor Incentive Compensation to Strategy

One of the tools top management has to influence policy-level executives’ pursuit of corporate goals is the incentive compensation structure. So the structure must be made consistent with strategy. In evaluating whether it is consistent, this article says, top management should think of it in terms of four aspects of corporate policy: short run versus […]

by

Malcolm S. Salter

by

Malcolm S. Salter

From the Magazine (March 1973)

A task of all chief executives is encouraging their policy-level managers to take action that reinforces efforts to achieve corporate goals. Most large companies do not rely solely on personal contact and other informal means to provide that encouragement; they also use formal management appraisal and financial reward systems.

A version of this article appeared in the March 1973 issue of Harvard Business Review.

MS

Malcolm S. Salter is professor of business administration at the Harvard Business School, where he specializes in the strategic and organizational problems of diversified companies. This is his fifth article for HBR.

Tailor Incentive Compensation to Strategy

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