Employee Incentive Strategy:Two Scenarios

Image:Rosewood Pen Case, CorporateSNOBS

When it comes to employee incentives many managers wonder, “Do employee incentives work?”

The answer to that is a resounding yes! and no!.

There are two ways that companies tend to build their incentive programs. In one scenario the bonus or incentive is awarded based on an increase in sales, or an increase in people hired, or whatever. This is not the best type of incentive and can actually work against you causing apathy in your employees about your incentive program. Why?

In this type of program your employees have no control over whether or not they get the incentive. While a talented sales professional can often create sales opportunities they cannot force customers to buy something. Since they really don’t have control over their performance when evaluated in this manner an employee can feel that he has worked hard for little appreciation. This employee incentive strategy is counterproductive.

A successful incentive program will allow the employee to be in control of whether or not he gets a bonus or incentive. How does that work?

When the award is based on what the employee does, the action he takes, the way he conducts his business then he is in complete control. If he works harder he is rewarded for his motivation. Evaluation is based on the input not the outcome. In the long run the end result will be better than in the first scenario because as the employee makes more sales calls, or interviews more people the percentages of successful sales will go up.

Do employee incentives work? Sure they do when implemented carefully and with consideration to human nature.

To keep things interesting have several levels of bonuses, from cash to pen sets, and designer briefcases to days off. Awards and bonuses should be kept fun, building friendly competition and positive peer pressure among your employees.

Do employee incentives work? They do if you know how to implement the program!