Incentive Plan Communications that Resonate

Companies invest tremendous effort in designing their STI plans, but may be leaving value on the table by not communicating effectively.

Why it matters: According to Pearl Meyer’s 2025 survey, only 28% of leaders are very confident that employees understand what drives their STI payouts. Meanwhile, 17% admit they have low or no confidence—so here are some key takeaways for improvement in getting the message across.

1. Communicate the “why,” not just the “what”

• While 55% of companies share specific metrics and numeric goals, only 27% report that each goal is clearly explained.
• 37% share a high-level explanation of the rationale behind the goals - 36% share only a partial or no explanation at all.

Opportunity. Craft messages that include the nuts and bolts of the plan and explain the thought process behind them. “Here’s why this matters” can help align the participant with the strategies.

2. Focus on “line of sight”

• Just one in 6 companies articulates how individuals can influence STI goals through their role.
• 49% share general messages about contributing, but only 17% said the messages clearly explain how participants can influence goals while only 15% provide examples to do so.

Opportunity. Use role-based examples, share success stories and involve managers in contextualizing goals at the team level.

3. Communications are mostly top-down and often one way

• 82% of companies communicate quarterly
• 37% deliver their communications through a presentation while 24% use email

Opportunity. Consider more interactive delivery methods – manager toolkits, team Q&As or short video explainers. Make room for dialogue.

4. Avoid the same old communication approach

• Two-thirds of companies have not evolved their approach in recent years.
• 26% have become more transparent while 8% have become less transparent – often due to competing priorities and uncertainty.

Opportunity. Just as incentive plans evolve, so should your communication strategy. Use messaging as a chance to inform, align and motivate.

Learn more. Join us August 6^th for a Center Webinar: Driving Accountability through Smarter LTI Communication. We’ll explore how leading companies are translating complex programs into clear, actionable messages that build understanding, accountability, and performance.