Company incentive programs are intended to keep employees motivated and engage them in their own performance. However, if they are not executed carefully, the reward system can result in jealousy among staff and decreased performance.
When planning incentives for your work staff, you need to consider a myriad of factors to avoid workers ignoring safety or other corporate rules to reach unreasonable sales or performance goals. The goals should be challenging but attainable with the reward gratifying.
To maintain fairness and equity with your incentive program, set up key performance indicators (KPIs) to evaluate employee’s progress and valuation adequately. These metrics will help you drive the success of your program but also company milestones. Consult this list of dos and don’ts when incentivizing your staff.
The first thing to do is to know your audience. If your staff is replete with millennials, they may appreciate vintage 90s swag rather than cash rewards or extra money in their 401k. If your workforce is young, hip and the company based near water, consider giving water sports gear or ski jet rentals as incentives. Make incentivizing fun for your whole organization.
Do remember to inform all employees about the rewards program. Make sure you stick to a regular schedule and operate with fairness and equality when doling out incentives. Ensure your incentives are goal-oriented and measurable. Involve your employees in choosing rewards that are meaningful to them. Consider their input when devising the program; they may have great ideas for performance indicators and goals as well.
Make rewards frequent enough to keep everyone motivated. Instead of just an annual bonus, build in daily, weekly and monthly incentives as well. Structure the program so that you can give many small incentives with more substantial rewards less often. For example, when the team reaches a sales goal, hand out company sweatshirts, mugs or other logo-decorated swag and when a particular employee is chosen for his or her annual contribution, perhaps a cash bonus makes sense.
Base rewards on peer input and not just management-focused goals. Letting your team pick the best of the group helps to build respect and teamwork within your organization. Recognition from peers is sometimes even more rewarding than from top level management. Plus, your employees know each other much better than managers do and might be aware of performance improvements that you may not know of.
First, don’t forget about the budget. When you build incentives into your company culture, factor in the cost of living and staff growth and make sure you can easily afford it. Don’t make the goals so easy that everyone achieves them, and you have to pay out, leaving nothing for the future.
Don’t offer “one size fits all” rewards — have options. Some employees might like swag and others might like an Amazon gift card instead. Variety can also ensure you are motivating your whole team, not just a select few. Don’t forget that you want your staff to work as a team so don’t create a rewards program that has everyone out for themselves. Team goals are good too, then the whole team wins the reward.
Don’t give inappropriate or unsafe items like e-cigarettes that are dangerous to your health and promotes a bad habit. Don’t set up programs based on one person’s opinion, such as an “employee of the month” where a manager chooses. Instead, use KPIs to evaluate all employees equally and know precisely what you are rewarding.
Don’t ignore your best people, be sure to incentivize them properly when they reach their goals. If everyone gets the same bonus and your top performers have been working harder than most, they will see it as an insult and feel unappreciated. This one misstep can cost you great employee assets, and it will actually hurt motivation in the long run.
Final Thoughts on Incentive Programs
You should reevaluate your incentive program each year. As the business grows, KPIs and other goals will change too, and the program should change to reflect this growth. Be careful not to use incentives in place of a proper salary.
The key to a successful incentive system is communication. Make sure all levels of management understand the program thoroughly and then have them communicate it to the rest of the staff working for them. Clearly spell out the expectations of the plan before implementing it. If no one understand the program, they won’t use it.
During the planning stages, it is important to discuss as a company what your purpose is for incentivizing your workforce. Once you know your own goals, it will be easier to devise milestones and rewards that are meaningful. Have a strategic plan rather than a vague notion of why it makes sense. Your incentive program should motivate and encourage your workers to strive to do their best.