Do Companies Understand Employee Incentive Programs?

Incentive Programs

Companies Don’t Understand Employee Incentive Programs

People who implement incentive programs are either executives or financial officers who are simply budgeting available resources. What you have to understand is that incentives could reflect the effort an employee does for his or her company and not what the company can afford to lose.

While this view can clearly drain your capital, you must note that not a lot of employees expect financial incentives. A lot of companies don’t understand what motivates employees simply because they’re not thinking about a good strategy that hits what employees look for in a company.

Thinking about money and complicated schemes always leads to failure

 “Incentives … do not alter the attitudes that underlie our behaviors,” Kohn from the Business Insider says. “They do not create an enduring commitment to any value or action. Rather, incentives merely — and temporarily — change what we do.”

The first mistake that you make is thinking about money. You immediately assume that your workers want a better form of financial incentive. While this may be true, you can also consider other forms of rewards that don’t necessarily translate to more capital drain.

Complicated schemes that require more man hours and people to track is also a detriment to a good rewards program. If it requires extra work for someone to track progress and report achievements and milestones then it is actually counterproductive and even a further waste of resources. Just think if your workforce doesn’t respond to the new incentive scheme—someone is tracking nothing at all and no one is interested in what you have to offer.

Simple always works best

Just like any startup or small-team initiative, SMEs have to understand that simple always works best. Here are some tips you can use to create a good incentive program that your workforce adopts easily:

  • The best motivators are personal growth, recognition, responsibility, work-life balance features and challenging work. Did you notice that money isn’t the top motivator for people? The more they work for money the more they notice that they don’t have time to actually spend that money. Giving them life enhancements instead and praise helps them perform better during work hours.
  • Money is not always the best reward. If you want to provide more concrete rewards, you can think of enhancing the current benefits package they have. Additional leaves or paid time off can be one of the best incentives—especially for single parents and people with busy personal lives. You can also offer gift certificates, vacation packages and other sponsored gifts from contacts and suppliers.
  • Know the people you’re rewarding. Knowing their personal preferences, their interests and personal lives can help you identify the exact rewards that they’ll be willing to work harder for.
  • Offer recognition as fast and as early as you can. This doesn’t mean that early financial incentive is the way to go. What you simply should keep in mind is that if someone has reached a milestone or target, acknowledge it and reward it immediately. This may be as simple as a new announcement over the company chat room or feed on social network. It can also be during your weekly meeting.
  • Be consistent. Don’t withdraw the program or stop giving out recognition when you’ve done the same for others. Your workers are going to be looking very closely at how you handle your incentives system. Any slip-up will make them think you aren’t serious about giving them the rewards they deserve.

In the end, the best way to motivate your employees is through a strategically-implemented rewards program that takes into consideration the employees’ demographic, wants and needs.

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