Dinesh DivekarDear Ssamtrust,
Sending letter is of secondary importance. The primary important thing is how do you measure the performance and do you measure what deserves to be measured? Generally, sales persons are given incentive because it is easy to measure whether they achieved the sales target or not. Therefore, the question arises is whether have you decided the parameters on which the performance will be measured? If yes, then you include those parameters for each HOD.
Designing measures of performance is not easy. It requires immense expertise. I have seen cases wherein organisation suffered or made losses while the people were patted on their back for their performance. I expect that you have avoided this contradiction. Therefore, while designing measures of performance, you need to take into account the organisational performance as well.
The next step is measurement of costs associated with each department. There are some direct and costs associated with each department. Have you identified those costs? Each must be assigned to the respective HOD and managing the respective cost is each HOD's responsibility.
Therefore, so many issues involved while deciding on the incentives. For further discussion, feel free to contact me.
From India, Bangalore