How Do I Implement Incentives For My Team?
Incentive plans are important for Small Business owners. I hear many reasons as to why business owners fear implementing plans for their teams. Reasons such as “I pay them every week, which should be enough of an incentive” make me cringe a little. Yes, you do (or at least I hope you do) pay them each week to perform a set of duties. Providing an incentive may increase their productivity, make them feel valued and increase your profit! It’s a win-win situation for everyone.
There are some important factors to consider when implementing your incentives.
Is it integrated with your business goals?
If your goal is to maintain long-term relationships instead of quick one off sales, then reward for long-term sales. If your plan is to grow your customer base rapidly then an incentive could be based on each new client or customer brought to the business. Use your KPI’s (Key Performance Indicators) to set your goals.
Is it easily measurable?
If your incentive requires a Masters Degree in Finance to figure out it won’t motivate your staff. Make it easily measurable and visible by everyone.
Is it achievable?
An incentive should require a push in effort, if it doesn’t your simply increasing your staff’s wage. The push in effort required should be achievable. Nothing will de-motivate your team as much as a goal so out of reach they will never achieve.
Is it consistent?
If you want your incentive to be successful, set the goal posts early and don’t move them during the incentive. This is another de-motivator for your staff. You can of course pick different KPI’s to focus on each month or quarter. This will allow people who have different strengths or skills to achieve.
Is it payable within a reasonable amount of time?
Keep time spans small, anything more than three months can quickly be forgotten. The larger the time required to achieve the larger the incentive needs to be.
Is it what your staff wants?
If you are offering a voucher to a camping and fishing store to a group of people who never camp and have no interest in fishing will it motivate them? Most likely not! Chose an incentive that appeals to everyone. Cash is always a great motivator but if you don’t want to use cash, then a couple of hours or a day off can be of value to your staff. Be very carefully about offering your own products or services as an incentive. It’s not a great motivator either, unless you’re offering a free Porsche!
Melanie Miller
Small Fish Business Coaching Gold Coast
www.smallfish.com.au
Kris Peksis 09-Feb-2011 03:43 PM
Very well thought out and relevant. I have had experience as an "employer" of both volunteer, paid and commission only and have also been offered incentives as a salesperson, manager and administrative employee. Most people quickly get used to the regular pay level and accept that for a regular level of work. Many people will go over and above what is required but soon become disillusioned and can become bitter when there isn't an incentive or reward to acknowledge the extra effort or result. Volunteers often become choosy about tasks and high achievers move on or lose interest. Low achievers or people who don't feel the urge to strive often don't agree with incentives - they put up a wall in case they look like they failed. You need to be careful about the type of incentives or how they are presented so they aren't belittling (Krispy Creme Donuts uugghhh!) or not of interest.
The greatest way to understand whether it is disinterest, fear or apathy that hold people back from doing things is to gradually up the level of the incentive. Even to myself, I can say can I get a new client by tomorrow for $50?...maybe, bit hard. For $1,000? I will followup a few old leads... For $20,000...easy!!! Done Deal.
Melanie Miller 09-Feb-2011 05:29 PM
Thank you for your feedback Kris.
I agree that the incentive needs to be relevant and yes, Krispy Kremes might not really be appropriate!
I also like your view on low achievers vs high achievers. It is really about finding the right fit for the mix of employees you have. Identifying the disinterest, fear or apathy is a great point!
Thanks again for your insight and feedback!
Anonymous 09-Feb-2011 06:54 PM
Very valuable information.
Incentives are based on such a simple concept.
Being rewarded for your EXTRA effort....and who doesn't like to feel valued and appreciated ?
As an employer you will be able to create a positive and happy work enviroment and I can guarantee not only productivity will increase but positive energy will also increase.
I have recently made a career move based primarily on incentives and have recently met with my new team who are energised and motivated by incentives !
Speaking from an employee point of view, incentives make you want to put in that extra effort , feel appreciated and generally makes you feel like work is worth while.
I totally agree that the incentive and KPI's must be achievable. I have previously over achieved with a global company and received a very generous incentive, only to have the KPI's increased to the point they were completely impossible to achieve. The result ? I become so demotivated I simply gave up and am now employed by someone who understands incentives and appreciates my results.
I have recently met with the team I will be heading up and the first thing we done was share our dreams and goals, both professionally and personally. This was a fabulous opportunity for me to put incentives in place that my team would like to achieve. My team would like to work less hours....time is our most precious commodity.....therefore I am really looking forward to working with my team to achieve our goal and have them spend a few more hours with their family instead of at work !
P.S Incentives work wonders with children too !!
Penny 09-Feb-2011 10:41 PM
Excellent Blog and so very important!
Incentives are a win win for an employer and employee. An effective system of incentives can help, persuade staff to join your business, retain existing staff, increase staff motivation morale and loyalty, boost productivity, link individual and business performance, focus employees on achieving targets and also build teamwork (I could go on forever). Perks and incentives can form an attractive element of an employment package too!
