Ten top tips for pulling together an employee incentive programme
- Consider why your people come to work in the first place
Our view is that it wouldn't be for the money. There's plenty of research, particularly with public sector organisations, to show that money is not a significant motivator, but the work itself and the opportunity to make a difference, are key. So financial incentives may not have the impact you wish.
- Prepare for performance
Feedback on both individual and group performance, and goal setting have been shown to have a greater effect on employee performance than money. So, rather than looking at performance after the event, ensure that employees know what they have to achieve, to what standards and that they know when they've been successful.
- One size doesn't fit all!
Be sensible when thinking about incentives in your organisation – the power of incentive schemes depends heavily on both the circumstances and methods of applying the scheme. This means that an all-singing, all dancing “Thank you” scheme you saw in Harvard Business Review from a company in California may not be entirely appropriate for a canning factory in Doncaster.
- Be aware of who your audience are (1)
WHO are you trying to motivate? Will the incentive that involves the chance to go off-road driving suit everyone? If possible, a range of options, from an extra day's holiday (low-cost and easily manageable) to the traditional small gifts (flowers, vouchers) and the more glamorous holidays/breaks will enable employees to chose what suits THEM as a reward rather than what suits the organisation to give. Different motivators may work in different parts of the organisation and managers should try to bear this in mind when designing their schemes – and if in doubt, ASK!
- Be aware of who your audience are (2)
Understand that company recognition is not always welcome, not is it always seen as valuable from INSIDE the organisation. Many research and development employees, scientists, technicians and other knowledge workers would get more satisfaction from recognitions of their achievements by their peers – who are often OUTSIDE the organisation.
- Define what success looks like (1)
What will you be rewarding? It's fatally easy for a scheme with the best of intentions to be the cause of much disharmony because success hasn't been sufficiently clearly defined. It is easier to see when numerical targets have been achieved (boxes packed, sales achieved etc) than it is to see behaviours enacted. The perception of inequity in rewarding employees can damage the relationship between staff and reduce commitment.
- Define what success looks like (2)
Focusing on behaviours, rather than “targets” involves more subjective judgement on behalf on those giving the incentive, and there is more room for error. Therefore, if you're looking to incentivise behaviour, give training to managers implementing the programme to at least try and ensure equity and reduce possible bias.
- Communicate, communicate, communicate!
Communication for incentive schemes is vital – managers should be able to agree on what constitutes a success (and therefore makes the employee eligible for a reward) and employees should CLEARLY understand what is required to qualify for the incentive. While this might be easy enough for the sales force, do consider how you would do it for canteen staff, or administrators, or drivers.
- Translate carefully
Implementing an incentive scheme in a large organisation with international offices has more than the usual numbers of pitfalls for the unwary. 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.
- What gets measured gets done….?
Chose your success measurements carefully. Academics have noted management propensity to “reward A while hoping for B” and there may be unwanted side effects. For example, research has 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!”
Finally, reward (which includes incentives) should be seen as a key part of making the organisation work more effectively, rather than a cost to be minimised. If not, employees quickly come to the realisation that they are indeed an asset – but one to be sweated rather than nurtured.
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