The Effective Employee Incentive Program
The Effective Employee Incentive Program
If you want to improve results and morale throughout the organization, here are some tips on ensuring your employee incentive program meets your goals:
1. Realistic Pay for Realistic Performance…Rewards for Extraordinary Efforts
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 should receive 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.
2. Don’t Let Them Strike Out Early
If they are half way through the incentive program and half the team has no opportunity to be rewarded you have lost half 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.
3. Prepare the team, administer the program
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 the employees and their significant others so that everyone is committed to the goals and the program. If you don’t, don’t expect to achieve your target objectives.
4. Announce Results with Flair
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).
5. Involve the Family
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 or she is doing it. Make the incentive program a household affair and everyone will win.
6. Be Consistent, Uncomplicated
Make the incentive program rules easy-to-understand and simple. Forget the 4 point type legalities. These are employees that you have entrusted the success of your company to 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.
7. Post Standings Frequently
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.
8. Meaningful Prizes
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 2-3 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…value is in the eyes of the beholder.
9. Us Vs Us
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. Achieving Six Sigma quality, increasing production by 20% over a 3-month period, 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.
10. Specific Objectives
Make your goals for the incentive program as specific as possible and as measurable as possible. For example reducing product rework to .001% is more measurable (and more meaningfully) than improving production output. Reducing order errors to 001% of all orders processed is more measurable than reducing order paperwork by 20%. If possible, give employees benchmarks for the incentive program so they can see their progress and make the goals achievable.
The Effective Employee Incentive Program - To learn more about this author, visit Andy Marken's Website.
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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:
1. Realistic Pay for Realistic Performance…Rewards for Extraordinary Efforts
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 should receive 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.
2. Don’t Let Them Strike Out Early
If they are half way through the incentive program and half the team has no opportunity to be rewarded you have lost half 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.
3. Prepare the team, administer the program
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 the employees and their significant others so that everyone is committed to the goals and the program. If you don’t, don’t expect to achieve your target objectives.
4. Announce Results with Flair
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).
5. Involve the Family
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 or she is doing it. Make the incentive program a household affair and everyone will win.
6. Be Consistent, Uncomplicated
Make the incentive program rules easy-to-understand and simple. Forget the 4 point type legalities. These are employees that you have entrusted the success of your company to 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.
7. Post Standings Frequently
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.
8. Meaningful Prizes
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 2-3 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…value is in the eyes of the beholder.
9. Us Vs Us
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. Achieving Six Sigma quality, increasing production by 20% over a 3-month period, 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.
10. Specific Objectives
Make your goals for the incentive program as specific as possible and as measurable as possible. For example reducing product rework to .001% is more measurable (and more meaningfully) than improving production output. Reducing order errors to 001% of all orders processed is more measurable than reducing order paperwork by 20%. If possible, give employees benchmarks for the incentive program so they can see their progress and make the goals achievable.
The Effective Employee Incentive Program - To learn more about this author, visit Andy Marken's Website.
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
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