Designing employee incentive programmes to support your goals

Success / Blackboard conecpt (Click for more)If you want to develop a successful incentive programme, then you need to ensure that the programme helps you meet your overall business objectives and acts as a positive reinforce for the behaviours you want your employees to demonstrate.


Set clear objectives

Whether you’re starting afresh or re-evaluating an existing programme, you need to start by setting clear objectives for your programme. These objectives might be related to sales, financial, productivity or customer feedback targets but you need to start with the end in mind, and that means knowing what you want to achieve.

The goal might be to ‘increase sales’ but you need to define what that means. For example, what specific product or service sales do you want to improve? By how much do you want to increase them by? When setting your objectives, you should also ask yourself why. Why do you want to increase sales, would it be better to increase profit margins? Double-checking your reasoning by asking if there’s a better way to achieve your objectives.

It’s also important to consider what will happen if your employees achieve those goals. Will the programme simply close down or will you have some back-up objectives in place to replace the old objectives and keep up employee engagement and participation?

Clearly defined goals will not only make the rest of the incentive programme easier to implement but they will also make it simpler to communicate to your employees.


Align it with your company values

While your employees might receive rewards and recognition for their end results, it’s important that the behaviours needed to achieve those objectives are aligned with your company values.

For how not to do it, we just need to look at the banking crisis. Banks were incentivising sales and employees were achieving those targets and getting rewarded for it. However the incentive programmes weren’t aligned with the company values; this meant employees focused purely on the sale rather than what was best for the customer.

A balanced approach that aligns your incentive strategy with your company values is essential for an incentive programme, and it will make you more likely to get the results and the behaviour you want.


Set realistic targets

Simple 3d scene representing arrows, that hit targets.

To get the best out of your employee incentive scheme, you need to set realistic goals that your employees have direct control over. For example, tying targets and awards to factors outside your employees’ control, such as the stock market price will only demotivate your staff.

Stretch goals that feel that they are out of reach and unachievable can demotivate employees and lead to them opting out of the programme. This will have a negative effect on all employees, and it won’t encourage the desired behaviours that you are using the incentive scheme to reinforce

The best way forward is to set realistic goals that are measured on a regular basis, reinforced by quarterly tactical promotions that put short-term rewards within reach. You can then finish your financial year on a high with a very desirable reward that is not only within reach of top performers but also those ‘most improved’ employees.


Want to find out more?

Read the next article in the series: Supporting your programme with communications >>

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John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.
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