Overall, incentives for business fit into the rewards and recognition classification, and employers use these to improve productivity, teamwork, profitability, attraction and retention, reward high performers, motivation etc.
When we talk about incentives, the first thing which springs to mind is the financial incentive, one which is in a form of a bonus or profit share.
After speaking with a number of people from different groups and different industries, there appears to be an overarching "dim view on financial incentives" from an employee’s perspective. The outcome from the conversations was that in many cases the employee felt they had been “duded out” of what they should have received.
The overall consensus was that either a recruiter or the company sold the financial incentive scheme in the best light, and once the target had been reached, the company changed the goal posts or there were undertakings made but never formalised.
So how can companies, including SME’s, ensure their incentive schemes are supporting their values, strategic goals, and in the process, regaining credibility with their employees?
Here are 5 important tips:
1. Ensure you are incentivising the ‘right thing’ and what outcome your business requires. Think about the scheme in it’s entirely. If you incentivise a Sales Consultant purely on their sales and you are wishing to promote team work, the two are not entirely aligned.
2. Do your sums, set the targets and do the budgets.
3. Clearly outline the expectations of the incentive to your employee, such as, eligibility, time frames, etc, and formalise the scheme.
4. Pay all those eligible for the scheme when they meet the specific criteria – (linking to point 2)
5. Celebrate your achievements with your employees.
Overall, incentives are a great way to motivate employees and recognize them for their hard work.