How To Create an Employee Incentive Program

Establishing an incentive program that is specific to your company can improve productivity, efficiency and overall morale


Employee-recognition and incentive programs can help increase retention, productivity and employee morale. They can also decrease turnover by encouraging loyalty.



When designing a program, be sure to clearly define what behavior you want to reward and encourage.



"The primary reason to establish an employee-recognition program is to motivate performance that will improve your company's bottom line," says Allison Grace, president of Instant HR Solutions, a Charlotte consulting firm. "An effective program rewards and reinforces behaviors that have a positive impact on the company."



So how do you do that? To start: "Make sure that senior management is behind the program," says Matt Coben, owner of Charlotte-based Thunder Road Brandworks, a marketing-consultant firm. "If not, the program is doomed to failure."



In addition, make sure the program is aligned with your company's mission, vision and value, says Anthony Luciano, senior vice president of sales and marketing for The TharpeRobbins Co., a Statesville employee-award and recognition firm.



It's important to decide on a budget for the program, how long it will last and who will be responsible for it, Luciano says.



Next, determine who is eligible for the program, Grace says. "Recognize all levels of employees. Make sure everyone has a chance to receive meaningful recognition."



Don't assume one size fits all, she adds. "Employees are motivated in different ways. Identify what's important to them, and offer a variety of reward options."



For example, one type of program involves a points-based system in which points are awarded to employees "not for just doing their job, but for extraordinary actions," Coben says. But "don't make the bar so high that no one gets any points or rewards are unattainable," he adds. Employees' point totals are tracked, and they can choose rewards based on their total from a catalog of items whenever they choose.



But there are other ways to reward employees, Grace says. That can include a note that says "good job," taking an employee out to lunch, giving a plaque or certificate recognizing the employee, mentioning the employee's name in the company newsletter or at a staff meeting or giving extra days off.



Whatever you choose, Grace says, "Set specific performance goals that will benefit your organization and identify the thresholds that will trigger an award." Such goals may focus on productivity, quality, customer service, cost reduction, sales, attendance, profitability or length of service.



"Don't use a cookie-cutter approach -- every company is unique," Luciano says.



It's not enough, though, to just have a program. "You need to communicate the program properly and get the message out -- otherwise people won't participate," Luciano says. "First train your managers, and then go to the employees."



The message needs to be consistent. "Be clear about the types of performance and behaviors you are trying to encourage," Grace says. "Provide regular, ongoing reminders to keep enthusiasm high. And continuously evaluate and modify the program to ensure it continues to be effective.



"Behaviors you reward are likely to be repeated," she adds, "so make sure you are encouraging the right ones that will benefit your organization."



TOP TIPS

Clearly define the purposes of your program, what behaviors will be rewarded and how the system will work.

Decide on a budget for the program, how long it will last and who will administer it.

Choose a reward system that meets your employees' particular needs and motivations.

Communicate the program regularly so employees will participate and to maintain enthusiasm.


How To Create an Employee Incentive Program - To learn more about this author, visit Allison Grace's Website.

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