Posts Tagged ‘employee incentive’

Keys to an Effective Performance Incentive Program

Thursday, October 6th, 2016

When it comes to increasing the return on your investment in your company, many business owners think of getting increased value through investments in new computer systems, or more sophisticated warehousing equipment, or a larger facility.  Yet, in today’s business climate, it is the company’s employees more than anything else that represent the single biggest investment that a business owner will make.incentive

That’s why effective performance incentive programs are so important.  Properly designed performance incentive programs not only help to ensure that you achieve your business objectives, but they can actually help employees develop or enhance job skills, thereby improving employee performance and productivity.  And, more productive employees become even more committed to achieving company goals, leading to repeat success and reduced staff turnover.

While the variety and complexity of a performance incentive program will vary from company to company, here are a few ingredients that are critical to the success of all such programs, regardless of your business:

Has High Visibility Among Employees: An effectively-designed performance incentive program will really get the attention of the employees.  But managers must also ensure that they create a continual “buzz” to keep the program objectives foremost in the minds of employees.  Regular progress reports and updates, as well as interim celebrations will go a long way to keep people focused and motivated.

Provides A Variety Of Incentives: Not all employees have the same responsibilities, and not everyone is motivated in the same way.  Successful performance incentive programs include opportunities for all employees to “win,” regardless of the type of work that they perform.  And including different types of rewards (a choice of either “cash” bonus, gift card, or a day off, for example) ensures that there’s something for everyone in achieving the goal(s).

Delivers Rewards In A Timely Fashion: The greatest satisfaction in achieving a goal occurs when the goal is realized, not a month after the fact.  And timely acknowledgment more directly connects the achievement itself with the reward, providing additional incentive to win another time.  Make sure that your performance incentive program provides for prompt recognition of achievement.

Includes Employee Involvement: Incentive programs developed by top managers only without the involvement of employees are likely to be not as effective as when there is employee involvement.   The people performing the job are often best positioned to know what is an appropriate range is for actual and stretch goals. Also seek employees’ opinions regarding types of incentives that will truly motivate them.

Reflects Business Goals And Company Values:  Remember that performance incentives are a very effective way to reinforce the goals and objectives you have for your business, as well as to remind people of the company’s overriding values.  Get the greatest impact from your performance incentive program by ensuring that it rewards performance consistent with that vision.

Should you need help thinking through an approach that will work best for your organization contact CAI’s Advice & Resolution team today.

Rick_Washburn circle

Rick Washburn leads the Advice & Resolution team at CAI. In his role, he advises executives and HR professionals on strategic and organizational issues, tackling subjects ranging from employee engagement to talent management. With his 25 years experience in HR management, Rick is uniquely poised to advice and lead businesses to successful HR strategies.

The Employee Incentive That Works Like No Other

Thursday, September 8th, 2016

The one reward that most employees crave, but few get, doesn’t cost anything to provide.

When employers brainstorm ways to reward employees, it’s logical to put compensation, incentives, and bonuses at the top of the list. After all, few people are able to work for free.

But is there a “best” reward—a reward that every employee craves but few receive? Many management teams are in search of just such a reward. CAI is frequently asked to provide managers and HR professionals with low cost, or no cost, ways to reward employees. The blogosphere also is full of lists of ways to reward employees. In fact, past CAI HR Management Conference speaker Dr. Bob Nelson has a book called 1,501 Ways to Reward Employees.  Photo of business partners hands applauding at meeting

These resources suggest everything from pizza parties to extra time off to premium parking spaces. There is nothing wrong with any of these ideas, and the more creative you can be the better. However, there is still a much higher reward that won’t cost you anything and will produce positive employee motivation. Have I piqued your interest?

OK, here it is: The one reward that most employees crave—but few get—and that is almost guaranteed to motivate employees to do good work is quite simply … praise. Praise is a very powerful idea that managers often forget about. Bosses usually are good about recognizing and pointing out bad behavior, but they often forget to recognize good behavior.

Think this sounds like a bunch of “touchy feely” HR stuff? Don’t be so quick to judge. As it turns out, receiving praise actually stimulates a chemical neurotransmitter in the brain called dopamine, something we all need. Shortages of dopamine can lead to feelings of frustration, anxiety, and difficulty in learning, all traits we definitely don’t want in employees. But receiving more of the chemical boosts feelings of pleasure and pride, according to a report from Gallup. Once you get that rush, the brain wants more of it, needs it regularly, and instinctively figures out what behaviors result in more praise and thus more dopamine.

So we have a relatively simple concept that produces quick increases in employee motivation that doesn’t cost anything. The workplace must be awash with employee praise, right? In fact, research conducted several years ago by Gallup found that less than one-third of American workers strongly agreed that they had received any praise from a supervisor in the last week. That’s a sad statement about the quality of supervision that many employees receive each day. Employees who think that nobody cares about their work will be less motivated. Some leave the company. Others remain on the payroll but essentially quit working.

There are many reasons for this lack of praise. Some managers don’t regularly praise because they are too busy and just forget about it. Others don’t praise because they don’t receive any praise from their boss either. Some managers worry that recognizing one employee and not another will make it look as if the manager is playing favorites.

To compensate for these problems, some companies institute regular events to recognize employees: “Per company policy, employees will be praised on the second Friday of each month in the cafeteria.” While there’s nothing wrong with company events, they shouldn’t be the only source of praise that employees receive.

How can employers do a better job? First, it’s important to differentiate between appreciation and recognition. Appreciation is the act of expressing gratitude to employees for their positive actions. It is best accomplished through simple expressions or statements: a simple thank you, a card, a pat on the back. Recognition means acknowledging workers in front of their peers for specific accomplishments, actions, or behaviors. It’s important to tailor both of these strategies to each employee’s personality. Some people just don’t like to be called out in public.

Where managers really miss the mark is with frequency. To be most effective, employees need the dopamine rush at least once a week. Noted leadership author Mark Murphy found in a study of more than 500,000 employees that 72% said they were not giving 100% at work. No doubt many were suffering from a lack of dopamine. So make it a goal to show appreciation for each of your employees at least twice each week. And for those employees you feel don’t deserve appreciation? That’s a subject for a future article.

If you just don’t have time to recognize or appreciate your employees on a regular basis, you should take stock of your daily activities to make the time. Remember, genuine praise produces quick increases in employee motivation, and it doesn’t cost you anything. Before you start handing out gift cards, make appreciation and recognition a priority—then watch how morale, motivation, and productivity improve.

Let CAI’s Advice & Resolution team talk you through ways you can build a positive culture.

dougDoug Blizzard brings a wealth of knowledge to CAI, serving as Vice President of Membership. During his first 15 years at CAI he led the firm’s consulting and training divisions and counseled hundreds of clients on HR and Employee Relations issues. If he isn’t speaking at North Carolina conferences, teaching classes on Human Resources or consulting clients on EEO and Affirmative Action, Doug is leading the company’s membership services.