What considerations should be considered in choosing employee incentives? What is the appropriate mix of incentives at the organization, team, and individual levels? A critical issue to consider is the organizational culture. An organization’s culture is defined by its unwritten rules and procedures.

Consider the types of systems that can be implemented in traditional cultures characterized by top-down decision making, vertical communication, and clearly defined jobs. An effective choice would be a plan that rewards specific and observable measures of performance, where that performance is clearly defined and directly linked to pay.

By contrast, organizations with involvement cultures are characterized by shared decision making, lateral communications, and loosely defined roles. In addition to the organization’s culture, an important consideration in selecting a CP plan is the organization’s strategic direction. Strategy is not only a key element in designing the performance management system, it is also a key element in designing a CP plan.