In tough times, top leaders rock and roll. They strut their heavy   mettle eyeing perks, growth and worker morale. Some tips:

Scope tomorrow. Gear top-level bonuses and stock options to the long term. Make vesting periods longer. Tie them to multiyear targets, say David Rhodes and Daniel Stelter, authors of “Accelerating Out of the Great Recession.”

Reward by position. Lower-rank leaders have less control over a firm’s results. When judging business-unit execs, use metrics tied to the units they lead.

Offer the right incentives, and units will excel boosting overall outcomes, the authors note.

Check the endgame. Earnings are critical. But so is the way execs handle capital. Link performance metrics to cash flow after profit is reinvested, Rhodes and Stelter say.

Cut the downside. Get execs to act like owners. If they enjoy the perks of growth, top sales and earnings, they should pay the price when the numbers tank.

No results, no bonuses. Negative numbers? Postpone stock payouts, the authors say. Skip rewarding failure. You get reckless decisions and a loss of morale.

Read the entire article here.

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