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what type of behavior do we want to be rewarded and reflected in pay levels (time in job, performance, effort, team cooperation, quality of supervision provided by management) how should we separate the job responsibilities from the person's performance in determining pay levels Once the compensation strategy has been set, then we set base salary ranges for each executive position based on desired competitive position. Then development of short and long term incentive programs can begin. When developing incentive programs, we focus on identifying the types of behavior and results to be rewarded as well as on designing the formulas used to fund and distribute incentive pay. We believe that measures of performance should be simple, comprehensive of the executives' area of accountability, and be linked to business strategy. Incentive rewards are designed to be commensurate with effort required and contributions made. Outstanding achievements call for outstanding rewards, average achievements call for average rewards, below average achievements call for below average rewards. We pay close attention to the linkage between incentive plans for different employee groups. We use a top down organizational approach in designing plans. The top management incentive plans reward management for achieving key business objectives.  The differences between levels in terms of performance measures hinges on identification of results which are controllable by the employee. As you move down the organizational ladder, the impact of the individual on company profitability diminishes so additional or alternate measures need to be utilized which more directly reflect the employee's area of accountability.  For information about executive compensation surveys, links to other compensation sites, compensation audit checklist, and information about our consulting services, see our home page at personnelsystems.com Or, send us an e-mail with your questions. PERSONNEL   SYSTEMS ASSOCIATES