Key aspects on determination of compensation
| Key Issue 2 – determination of compensation | ||
|---|---|---|
| Case study A (ITALY) | Case study B (USA) | |
| Performance scoring system and deduction | Performance compensation is weighted according to the weight attributed to each area of interest defined in the contract with a provided formula. This means that each area has weighted coefficients for the determination of the remuneration | The performance deduction in the determination of compensation accounts for more than 50% of the entire amount defined in the contract. Every area has a strong specification on the amount of deductions for any possible emerging issue. but there are no coefficient used for the calculation, as every single area is well detailed and specified |
| Function of payment mechanism | Payments, although can very according to different specification in the contract, are not very flexible and accounts for less than 20%. Payments are made every six months | The payment scheme is not really clear and is not included in the contract |
| Staff management and compensation | The staff management issue is not addressed in the contract | According to the contract, a frequent change of staff is possible and can make strong work relationships. Furthermore, the component of staff compensation is very sensible to the entity’s performance |
| Price adaptation determination | A specific formula is used | No specific formula is used |
| Key Issue 2 – determination of compensation | ||
|---|---|---|
| Performance scoring system and deduction | Performance compensation is weighted according to the weight attributed to each area of interest defined in the contract with a provided formula. This means that each area has weighted coefficients for the determination of the remuneration | The performance deduction in the determination of compensation accounts for more than 50% of the entire amount defined in the contract. Every area has a strong specification on the amount of deductions for any possible emerging issue. but there are no coefficient used for the calculation, as every single area is well detailed and specified |
| Function of payment mechanism | Payments, although can very according to different specification in the contract, are not very flexible and accounts for less than 20%. Payments are made every six months | The payment scheme is not really clear and is not included in the contract |
| Staff management and compensation | The staff management issue is not addressed in the contract | According to the contract, a frequent change of staff is possible and can make strong work relationships. Furthermore, the component of staff compensation is very sensible to the entity’s performance |
| Price adaptation determination | A specific formula is used | No specific formula is used |
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