Economic disruptions resulting from the COVID-19 pandemic have
caused many employers to make changes to employee compensation,
such as reducing or deferring base salaries, as part of
cost-cutting measures.
Bonus programs and other performance-based compensation
arrangements are also being impacted, but in different ways.
One significant effect is that performance goals that once looked
achievable may now be out of reach. Companies are therefore
having to decide whether to make changes to the performance goals
to reflect the new economic reality.
The decision whether to modify performance goals will be
specific to each company, but should be based on a systematic
evaluation. A checklist of 10 key questions to ask in
deciding whether to modify performance-based compensation is
below.
