Effective Employee Incentive Programs
Downsized organizations, tough economic times, demands to reduce
costs and improve quality and a myriad of other reasons can stimulate the need
for an employee incentive program. Done properly, the investment can be minimal
but it can produce very positive results.
If you want to improve results and morale throughout the
organization, here are some tips on ensuring your employee incentive program
meets your goals.
Rewards are no substitute for a decent paycheck. For example
the airline industry shouldn't expect employees to give back benefits and go
the extra mile. Especially in light of reported side deals senior executives
received just for staying on the job. Given the tough economic environment the
industry is operating in today, they should expect decent performance for decent
pay. At the same time, management--in any industry--should be creative in
developing programs that will help encourage off-the-chart performance, even if
the rewards are deferred.
If they are half way through the incentive program and half
the team has no opportunity to be rewarded you have lost half of your team.
They have no incentive to push harder and be more efficient/more effective if
they are out of contention. Putting forth the extra effort and winning should be
a team effort, not an individual effort. Keep the team interested and involved
throughout the campaign.
Don't launch your employee incentive program and then go
about explaining it to members of the team as the program progresses. Plan a
promotional campaign for the internal program
just as you would for a product launch. Spend the time
necessary to communicate the program to employees and their significant others
so that everyone is committed to the goals and program. If you don't, you can't
expect to achieve your target objectives.
Make a big deal about the winners and their prizes. Make
them feel special. The way you promote your winners over the weeks following
the program will be as important--if not more important--than the prizes. Make
certain everyone gets the message: performing pays big dividends (regardless of
the dollar value of the awards).
If you want to get people excited and keep them excited
don't overlook the importance of "selling" the family or significant
other on the campaign. Make certain you send program information and progress
reports to the employee's homes so everyone understands what the individual is
doing and why he is doing it. Make the incentive program a household affair and
everyone will win.
Make the incentive program rules easy-to-understand and
simple. Forget the four-point-type legalities. These are employees to whom you
have entrusted the success of your company, so be straightforward with the
program. Once the program is underway, maintain a steady course even if the
program isn't the optimum program you want. Don't experiment and create
confusion or change the rules half way through the race. If you discover some
shortcomings in this program, save the improvements for the next program.
Keep employees current on their standings in the
competition. At least once a week let people know where their team stands and where
they stand in their efforts to achieve the program's goals. Chart the progress
on employee bulletin boards or on wall charts.
Prizes don't have to cost a lot to be valuable to employees,
but they do have to be meaningful. By the same token cheap prizes tells the
employees management doesn't care about its goals. A six-day trip for two when
the family has five kids they have to worry about isn't as attractive to some
people as two or three evenings out during the month at a fine restaurant. The
cost is not only less but the couple gets a chance to relax and enjoy
themselves. Remember that value is in the eyes of the beholder.
While sales incentives--usually the most common type of
program--does pit us versus them (other territories, competition, etc.) there
are a number of incentive programs you can develop that create team efforts.
Increasing production by 20 percent during a three-month period or going from
design concept to finished product in five months are all team incentive goals.
Programs of these types produce not only the desired short-term goal but also
produce long-range results. Promoting team efforts pulls the organization
together and gets everyone going in the same direction. That camaraderie is
hard to change once the program is completed.
Make your goals for the incentive program as specific and as
measurable as possible. For example, reducing product rework to .001 percent is
more measurable (and more meaningful) than improving production output.
Reducing order errors to .001 percent of all orders processed is more
measurable than reducing order paperwork by 20 percent. If possible, give
employees benchmarks for the incentive program so they can see their progress
and make the goals achievable.