STIP Design Tool


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Build a clear, aligned short-term incentive plan (STIP) in collaboration with key members of the organization. Use the STIP Design Tool tool to:

  • Record members of the STIP design team and assess their familiarity with STIP design.
  • Assess the current state of the STIP.
  • Identify the structure of the new STIP.
  • Select performance measures.
  • Define performance measure thresholds, targets, and maximums.
  • Identify employee groups and appropriate weightings.
  • Determine payout ranges and percentages by employee group.
  • Select a modifier (if appropriate).
  • Record modeling inputs.
  • Review the estimated total cost of the STIP. Evaluate the impact of changes in targets, weightings, payouts, modifiers, and projected results on final payout.

Use this tool to work through the design of the STIP.

Note: This tool includes a blank version for you to customize and fill out and an example version to demonstrate how the tool works.

Solution Set Steps

  1. Align the STIP with key strategic priorities
    • STIP Design Tool
  2. Design the STIP
  3. Plan the STIP payout
  4. Communicate, monitor, and review

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