“Properly constructed incentive programs can increase performance by as much as 44 percent.”
Source: The Incentive Research Foundation (IRF)
The brief quote above is the most direct answer to the question: “Why do I need to utilize incentive programs for my business?”
Deciding that you are ready to begin offering incentives to your employees, channel members, dealers, and other sales personnel is the easy choice. Implementing a plan that will be effective and demonstrate a high return on investment consistently is the difficult part.
Thankfully, we’re here to help with and pass along some priceless knowledge that the IRF shared with us.
“8 Steps to Effectively Implement Employee Incentive Programs” is not the catchiest title, but it just might be the most important thing you read all day.
1. Assess The Situation
When management decides that there is a lack of motivation and substandard performance levels present in the organization, it’s time to conduct a “gap analysis” and see where the difference lies between objectives and actual performance. If the assessment proves that incremental levels of effort and motivation can close the gap between “desired” and “actual,” then an incentive program may be the perfect tool to implement.
2. Select A Program
Quota-based incentive programs and rewards that are based on quantifiable, challenging, yet attainable performance benchmarks are recommended. Awards are administered based on surpassing these goals and are constantly adjusted and perfected.
3. Provide Work Value
Incentives increase performance based on the level of value that individuals assign to their goals, objectives, and successes at work. The key is to build stronger commitments, administer valuable rewards, enable communication, and constant support that make the contributions of a worker meaningful. This is the secret to motivating people.
4. Establish Training and Communication
After incentives that employees value and strive to achieve are in place, it’s time for them to put their skills to work. Enabling the success of your employees in their pursuit of incentive awards can be assisted by offering training and appropriate communication.
5. Support Your Employees
The only way to gain the trust of employees and their buy-in is to ensure that all rewards are given fairly. Disbursing, administering, and distinguishing awards fairly is the first step. The next step is to make certain that all employees trust and understand that you are doing an effective job on this step.
6. Appeal To Emotions
The most impressive performance gains are always produced when your employees are emotionally engaged. Inspired employees who have an emotional stake in the awards and a healthy competitive spirit are so crucial to program success.
7. Measure Results
The IRF stresses the importance of measuring three motivation outcomes at all stages in the program: active choice—the effort to complete the work as specified, commitment —persistence to succeed continuously and mental effort—thinking clearly.
8. Analyze and Gauge Feedback
Incentive programs are like any other investment and should be constantly evaluated against objectives and cost. Once the analysis is complete, it’s time to start the process over and refine and improve to optimize results.
Many companies do not possess the adequate resources, experience, and knowledge necessary to put an effective program in place as laid out above. Fortunately, we here at JNR have over 30 years of experience repeating this process with a multitude of clients from different industries and of all different sizes, including Fortune 500 entities.
Give me a call at 800.343.4546 or send me an email at firstname.lastname@example.org to discuss setting up a program. Whether you’re looking to manage your program in-house or have us provide some help, I am happy to talk! Our blog at http://blog.jnrcorp.com is also a great resource with weekly postings on similar subjects.
By JNR Corp
Written by Kristopher Hewkin