10 Things to think about when pulling together an employee incentive programme – comment for Marketing Week
- Why do your people come to work? If it’s not just for the money, (and there’s plenty of research into public sector organisations which shows that it is not money that is a key motivator, but more to do with the work itself, and the opportunity to make a difference) then financial incentives may not have the impact you wish
- Feedback on individual and group performance and setting goals have been shown to have greater effect on employee performance than money. In addition, research has also demonstrated that the power of incentive schemes depends heavily on both the circumstances and methods of applying the scheme.
- So – WHO are you trying to motivate? Will the incentive that involves the chance to go off-road driving suit everyone? A range of possible options, from an extra day’s holiday (low cost and easily manageable) to the traditional small gifts and the more glamorous holidays/breaks etc should be offered so employees can chose what suits them – rather than what suits the organization to give. Managers should recognize that different motivators may operate in different parts of the organization and design their incentive schemes accordingly – one size rarely fits all!
- Managers should also understand that recognition (i.e. Employee of the Month) is not always welcome, nor is it always seen as valuable. For example, many research and development employees, scientists, technicians and other knowledge workers would get more satisfaction from recognition of their achievements by their peers – who are often OUTSIDE the company.
- WHAT are you trying to get employees to do? Is it to perform a behaviour (being nice to customers, for example) or to achieve a target? (the number of sales, boxes packed, goods completed etc). It is easier to see when targets have been achieved than to see behaviours enacted. How will you measure success? It’s important that everyone understands what “success” means. Research has shown that the perception of inequity in rewarding employees can damage the relationship between staff and reduced commitment.
- Focusing on behaviours rather than “targets” involves more subjective judgment on behalf of those giving the incentive, and there is more room for error. Therefore, training for managers implementing the programme needs to be put in place to ensure equity and at least attempt to reduce possible bias.
- Communication for incentive schemes is vital – managers should be able to agree on what constitutes a success (and therefore makes the individual eligible for an incentive) and employees should be able to CLEARLY understand what is required to qualify for the incentive. While this might be easy enough for the sales force – how would you do it for canteen staff? Administrators? The postboy?
- Implementing an incentive scheme in a large organisation with international offices requires more work. Cross culturally, not all incentives have the same value or indeed, the same meaning. For example, in Nordic Countries, individual incentives are less welcome than team based incentives. In addition, tax regulation in different countries may make smaller rewards almost worthless to the recipient.
- Chose your success measurements carefully. Academics have noted management propensity to “reward A while hoping for B”. As we’ve seen with PRP, there may be unwanted side effects and research has also shown that focus on sales incentives can make sales people LESS customer focused, but more sales oriented. It’s much easier to measure the effectiveness of the processes than it is to measure the outcomes, especially in terms of behaviour. For example, how would you measure the amount of customer satisfaction delivered by the efforts of an individual employee? Waiting for customers to send in letters of thanks might be very dispiriting for the employee!
- Reward (which includes incentives) should be seen as a key part of making the organisation work, rather than a cost to be minimised. If not, employees quickly come to the realisation that they are a greatest asset – but one to be “sweated” rather than nurtured.
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