Executive planning is the process of laying out a strategic order in which top employees should carry out their duties and the benefits they are likely to get in order to achieve maximum benefits in a company. Every corporate should not lack executive planning as it is a vital component for benefit strategies. Proper executive planning motivates executives and also ensures that they have a drive to focus on the success of the business. The plan should offer a better incentive of a package as compared to what the competition offers for it to succeed.
The elasticity of development of ideas concerning benefit compensation which makes them useful in many ways is brought about by executive planning. Replacement income at retirement is able to be provided based on total compensation. Rewarding, attracting and retaining of key executives is made possible. It makes it possible to provide enhanced benefits in case of a complete change of power in the business.
There are three key types of executive plans namely: deferred compensation arrangements, benefit equalization plans and supplemental executive retirement plans. Benefit equalization plans are plans that help to restore lost retirement plans. In order to avoid current taxation, deferred compensation arrangements allow both designated executives and corporate directors to defer additional compensation. In order to make it possible for employees to have vehicles these plans are strategized. A large number of benefits are provided by the supplemental executive retirement plans. Credit provision for additional years of providing services is made possible. The rewarding of top employees by the organization based on their overall performance is made possible. The giving of bonuses to executives is made possible. It also enables the enhancement of retirement benefits for executives who retire early.
There are various factors that every organization should consider before the can design an executive plan. Cost objectives and benefits of the business should be taken into consideration. The attitude of the business towards the allocation of benefits based on the overall company performance should also be taken into consideration. Finally, the other factor to consider is how the organization would prefer to apportion its retirement benefits among various plans.
In order to succeed, every business should have a well thought out executive planning since it enables the organization to maintain and attract key personnel. Both the succession of the business when the time is appropriate and availability of exciting incentives to key executives are brought about by effective executive planning. It also helps an organization to plan for its current and future needs and its executive leadership.
Effective executive planning is an indispensable component for every business and that ensures its success.