What Makes a Good Incentive Plan?
Karen Marino | Aug 17, 2015
Most people love a good incentive plan: It gives them motivation to work harder and achieve more. Basically, it’s a reason to come to the office energized and use creativity to solve problems in the workplace. However, only the best incentive programs actually achieve those outcomes. Plans that aren’t effective fail to motivate employees and ultimately fall by the wayside. So, if you’re looking to incentivize your staff to bring out their best work, you need to know what makes a program effective. With that in mind, here’s a look at the attributes that define a good incentive plan:
“Have an end-goal in mind when creating an incentive program.”
Clear Goals and Rewards
Trying to achieve a hazy goal isn’t easy, as you aren’t sure where the target is. If your incentive program has unclear requirements and rewards, your employees may give up earning the prize. For this reason, ensure your program is well-defined. Make sure all of your employees know what they have to do to be eligible for participation and what rewards they get at which stages.
Knowing the next step will give your staff something to work toward and the roadmap they should follow to get there.
When many employers hear “incentive program,” they automatically think “bonuses,” however, a lump sum doesn’t always have to be the reward for good work. In fact, offering a range of incentives that depend on the task or goal employees complete can have more positive outcomes. This is especially true, as some rewards are more motivating in certain situations. For instance, if you want your staff to be invested in the success of your business, provide stock options as an incentive. In that case, they’ll earn more money based on your company’s performance.
What’s more, not all of your rewards have to be big. If an employee gets a shout-out from a client, offer a small and fun reward. Some companies give out candy or a free lunch for this kind of recognition. Or, develop a point system. When employees complete required eLearning courseware as part of their training, they could get a point. When they save up, perhaps they can have first dibs on company snacks that week.
Scale your rewards system to the tasks your staff completes – the incentives should be appropriate for the work they do. Additionally, create rewards that make sense for individual departments. Your managerial team and sales teams will likely respond better to different incentives.
Have an End Goal
Before deciding what your rewards will be and what the requirements are for receiving them, ask why you’re designing an incentive program to begin with. What do you hope it will achieve? Do you want to increase employee productivity? What other measures can you take along with incentivizing that will help achieve these goals? Knowing your end goal will help you create the ideal path for getting there.
Be as specific as possible when defining your end goal so you can track progress. Add benchmarks to your long-term plan so you can mark success along the way. Then, you’ll be able to say “I’m 50 percent of the way to my goal,” for instance.
Discern What Employees Want
The things that motivate you to produce your best work aren’t necessarily the same approaches that inspire your staff. Conduct a survey or hold meetings to learn what incentives your staff wants and what is effective at motivating them. That way, you can incorporate incentives into your program that you know will work. What’s more, having employees involved in the creation of your incentive program will make your staff feel like they’re part of the process – they’ll know you’re investing in their future, and that alone can be motivating.
Effective incentive programs help entice your staff to produce their best work, but every company’s plan will look different. Start with your end goal, then learn what your staff responds best to. By responding to the needs of your employees, you can build an incentive program that receives a high participation rate.