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How to design incentive programmes that work

Geoff Saner

According to the latest research, actively engaged employees are more likely to be productive than those who merely treat your company as a means to a pay check. One way to engage your employees is to develop an incentives programme. Here are 10 tips to follow to create a programme that works.

1. Start with a sound strategy

To make sure your incentive plan is efficient, it must align with your company’s business strategy. Synchronise your plan’s aims and goals with your business’ objectives so that the goals your staff members have to accomplish to be rewarded are clearly laid out – and achievable.

2. Set multiple performance targets

The performance bell curve suggests that the majority of individuals who participate in incentive schemes will positively alter their performance when an achievable target has been set for them. This means that more of the ‘average’ performers will move up into a top performer position, while setting higher goals for top performers ensures you will achieve your business goals, which will ultimately lead to the incentive programme becoming self funding.

3. Set clear goals

Make your programme’s aims, objectives and goals simple to understand and clearly written so that participants can easily focus on what they are being asked to do. This sounds logical but most firms complicate their programmes with too many goals and parameters, as well as complex achievement ratios. This all leads to employees understanding the incentive programme less and thus they become less interested in trying to achieve what is expected of them.

4. Define the measurements

Ensure the metrics you use in your incentive programme are clearly defined and easy to understand. For instance, is a new turnover figure or increase in percentage needed? Is that percentage calculated on cost price, sales, or on profits? And within what timeframe must this be achieved? In part or in whole? Who is eligible to take part in the incentive?

5. Recognise the employees who go the extra mile

A well-structured incentive programme will include a percentage weighting of the total target as a bonus for achievers to strive for in return for bigger reward values, as well as the sheer recognition. So include reward ratios for behaviours and results.

6. Recognise and reward the right behaviours

If you reward behaviour that employees consider to be too ordinary, this dilutes the effectiveness of your campaign and can produce negative or even incorrect results. For instance, rewarding good safety practices will outstrip rewarding ‘zero accidents’ as your staff may skew their results just to achieve the zero rating.

7. Meet everyone’s needs

The company needs to benefit from the incentive put in place, and so do the participants. This means they need rewards that are meaningful to them, rewards that excite, inspire and are relevant to them.

8. Provide a spread of rewards

Depending on the strategy and goals you set, you can have a mix of financial and non-financial rewards. For instance, cash or gift cards may look attractive but when action or pampering lifestyle experiences are offered, research shows that those tangible rewards will generate a higher level of improved performance than pandering to the adage that ‘cash is king’.

9. Give frequently

The faster the reward is delivered into the participants hands, the better the productivity will become.

10. Communicate. Communicate. Communicate

The more often you communicate with your employees about the programme objectives, the rewards available and the results, the more they will respond with added effort and focus onto the desired incentive programme goals.

Geoff Saner is the managing director of Leading Incentives. He also owns Gift Bucks (Pty) Ltd and Creative Incentives (Pty) Ltd. Geoff completed studies at the International Advertising Association.