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.
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 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.