Developing the Best Incentive Program for Your Employees

To introduce the best incentive program for your business you first want to determine what you are trying to achieve. Are you looking for employee engagement? Increased employee recognition? Increased employee performance?

Once that’s established, you need to understand what motivates your employees. Cash? Days off? Recognition? Trips? Merchandise?

What Motivates?

In my personal experience, cash is a fleeting motivator. Many people in the long term feel that the cash bonus or commission is part of their overall salary and therefore no longer an added incentive to them to excel. And, what’s worse is if you stop the program the employee feels as if they have had a pay cut. Talk about a de-motivator!

A local hospital has an on-going program of employee recognition by peers and patients for a job well done. They recently further rewarded their five highest documented recipients and took their photo with the CEO, placed it in their local newspaper, on their intranet and on posters around their offices. They also congratulated the recipients with balloons, candy and a plaque and invited them to attend their managers meeting. 150 of the company’s leaders were at the meeting and were introduced to their accomplishments. They gave them a standing ovation. The honorees were so surprised. One of the recipients remarked “I’ve never felt this important”. Cash doesn’t buy you that.

I was visiting a company today and they have an incentive program for their sales people, but the other employees feel left out. They understand why the sales staff has the program and that’s it tied to the overall profitability of the company, but they feel that their “back office” operations contributes as well.

In my mind, a great incentive program is all inclusive. Not just the sales stars or the directors and managers, but all the staff. There can be varying levels and of course not everyone will achieve all the levels or even participate but the company will benefit from the increased morale of the employees as they see that the company recognizes their efforts.

Most agree that the more an employee feels a part of the team (company family) the more engaged they become and the more productive and loyal employee they will be.

Another company has a “recognition wheel”. If an employee goes above and beyond their supervisor invites them to the “wheel”. It’s a great rally opportunity for all the employees. The wheel has many levels of items from cafeteria gift cards to logo’d merchandise (caps, mugs, pens, journals) and the employees love it. Productivity has increased dramatically since it was introduced and to the surprise of the manager (not me of course) the employees prefer the logo’d merchandise. They love to show they made it to the “wheel”.

There are six key elements that all incentive programs should include:

• Specific and achievable goals
• Measureable outcomes/results
• A clear start and end date (the program can be continued/refreshed year in and year out but each “period” should be finite)
• Efficient distribution of the rewards and reports (nothing is worse than achieving a goal and having to wait 6 months for the “reward”)
• Continuous communication of the program and how participants are doing (consider “instant gratification” rewards – given out when smaller steps are achieved toward a larger goal and publicized keeping momentum of the program)
• Share successes (employees appreciate their peers success, but it may invoke their competitive spirit to do more

As you develop your program remember these elements and keep it simple. You and your employees will see results.