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On the way to Motivation Street!

Most employees just want to hear a simple ‘thank you’ for the work they perform and to feel valued and appreciated. An incentive scheme or program is a great way to officially do this.

According to the Harvard Business Review, the vast majority of U.S. corporations use some sort of program intended to motivate employees by tying compensation to one index of performance or another.

So do incentive schemes really work? Do they motivate employees making them want to strive for excellence?

I personally think it depends on the incentive scheme or incentive program. I have seen some really great incentive schemes that drove the company’s desired values and behaviours. On the other hand, I have also witnessed some terrible incentive schemes that bred a culture of entitlement with the expectation of reward for just doing their job (that is what a salary or hourly wage is for).

incentive scheme image 2Firstly let’s look at what an incentive scheme is. Generally, it is a formal program to promote specific actions or behaviours over a period of time. In particular incentive schemes are used to motivate employees. You may have also heard incentive schemes called ‘pay for performance’.

The overall goal of an incentive scheme/program should be to help employees grow to higher levels of performance and excellence. By smart goal setting, an incentive program will help to inspire, encourage, motivate and reward employees. By setting smart goals combining both team based and individual goals you not only reward your top performers but also your intermediate performers. Some of the best goal setting I have observed had a two tier approach. The company introduced an eligibility hurdle. Essentially what this meant was, if the company didn’t make a profit then bonuses would not be paid to any employees including the big wigs. Therefore, it was up to each employee to strive for excellence to ensure the company made a profit. If this goal was achieved it then moved down to each individuals goals. Every employee had a mixture of not only individual goals but also team or department goals. By creating this model it drove a great culture of accountability and team work.

So how do you design an incentive scheme/program?

I would recommend that you design your program with these principles in mind.

  1. Select your goals – you may choose several goals depending on the employee’s role.
  2. Decide how you will measure your goals – you may use a variety of metrics such as customer satisfaction results, productivity measures etc.
  3. Decide what you will use as a reward – you may use a points systems to obtain gifts or monetary rewards such as a bonus, gift cards etc. to name a few.
  4. Keep the excitement alive! – Always discuss with your employees how they are tracking against their set goals. A great time to do this is during monthly one on one sessions.

Having formal incentive schemes are a great way to reward employees however don’t forget that most employees just want to hear you say ‘thank you’ for a job well done.   Please don’t underestimate the value of these small gestures.

If you need help tweaking your incentive scheme or assistance in creating one, give HR Gurus a call. It’s what we do!

Written by resident HR Guru, Natalie Bol

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