SOURCE: Aberdeen Group, a Harte-Hanks Company

April 05, 2007 11:17 ET

88% of Companies Are Driven to Align Employee Behavior and Performance to Business Goals

To Achieve That Goal, Companies Are Implementing Incentive Compensation Programs Through the Effective Use of ICM Applications

BOSTON, MA -- (MARKET WIRE) -- April 5, 2007 -- Companies with Incentive Compensation Management (ICM) applications deployed are able to exceed overall Best-in-Class performance in rolling out changes or new programs -- and they are 50% more likely to design, model, test and implement in less than 1 month, according to a new report from Aberdeen, a Harte-Hanks Company (NYSE: HHS). The latest Human Capital Management (HCM) benchmark report from Aberdeen, titled "Incentive Compensation Management: Aligning Employee Performance with Business Goals," also found that the need to align employee behavior and performance to business goals is the key driver prompting 88% of companies to use incentive compensation programs.

"Variable compensation can be one of the most effective levers for aligning employee behavior to corporate business goals," said Cindy Jutras, vice president and service director, HCM, ERP & Manufacturing, Aberdeen. "While variable compensation is the norm in managing the sales force to drive sales and revenue goals, an increasing number of companies are using incentive compensation to motivate more employees, reward exceptional performance, encourage customer satisfaction, and retain talent in order to meet and exceed corporate goals."

Three principle barriers stand in the way of implementing incentive compensation programs, according to Aberdeen's latest study. The inability to precisely align employee incentives with specific, targeted business outcomes and the inability to accurately measure performance levels and link them to compensation were reported as leading challenges by 45% of respondents. Both are also key elements in aligning employee behavior with corporate goals. However the top challenge was the considerable time and effort to design and change incentive plans (47%).

Best-in-Class companies are three times more likely to have implemented an Incentive Compensation Management (ICM) application, according to Aberdeen's findings. These companies achieve better business benefits in terms of growth of revenue and profitability and reduction in overall staff turnover. Based on the findings from this study, Aberdeen makes the following recommendations:

--  Implement a balanced scorecard goal-setting and measurement system for
    executing the company's strategy.
--  Implement a structured performance management process to give workers
    feedback on their performance against goals and standards.
--  Implement a robust ICM application and use it to plan and track
    incentive programs.
--  With an ICM application implemented, allow workers to go online
    immediately after work performance to learn whether they qualify for a
    bonus, and to determine the financial impact of their compensation.
    
This study is made available to the public by the following underwriters: Centive and Xactly. For a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=3940

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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