The problems with staff incentives

Problems with staff incentgivesEvery company want to improve the morale and motivation of its employees, as it’s well known that engaged and motivated employees can significantly contribute to the success of any business.

One of the quickest ways to motivate your employees is to set up staff incentives, but before you start handing out rewards, here’s our top six problems with such schemes. They’ll tell you exactly what you need to know to avoid problems with your incentive scheme.


1. Not aligning staff incentives to your business strategy and objectives

When businesses think of incentive schemes they typically think of rewarding performance but you should also reward key behaviours. Ask yourself, “what behaviours do I want to reward?” for example, “do I want to reward people for staying late or for finding a way to complete their work more efficiently?” Once you’ve identified the behaviours you want to reward then identify the activities that reinforce those behaviours, such as helping a new recruit or fine tuning processes.


2. Unrealistic goals and targets

Improving employee performanceWhilst you may have top performing employees who meet their targets and goals every month if you set the same goals for everyone then the majority won’t achieve them.

Unrealistic goals and targets will demotivate rather than motivate, so work with employees on a one-to-one basis to set targets and objectives that are relevant to their level and their role. Help them set their own goals but don’t make them too easy or too challenging.


3. Stop/Start initiatives

If you start a reward programme such as ‘Employee of the Month’ make sure that you do it each and every month: be consistent rather than doing it randomly. The best way to do this is to give the responsibility for the programme to one person and make it part of their role to oversee and manage the programme.


4. Promotion

Don’t make promotion or a pay rise part of the incentive. Because, believe it or not, this actually happens! Promotions and pay rises should be part of your performance management reviews, not tied into a reward scheme. Mistakes such as this can cause dissention amongst employees and bad feelings towards both the business and the newly promoted employee.


5. Favouritism

One of the most common complaints from employees about staff incentives is favouritism from managers and senior leaders. It can lead to accusations of brown-nosing and as a result demotivate staff. One way to avoid accusations of favouritism is to implement a peer-to-peer reward system where colleagues nominate their co-workers who have demonstrated the values and behaviours that you’ve identified in part 1. You should also use your communication channels to constantly reinforce what behaviours/actions are being rewarded and make the process for nominating and rewarding transparent.


6. Unsuitable rewards

It’s a safe bet that each of your employees is different, and therefore motivated by different rewards. When selecting rewards consult with your staff on the types of rewards they want to receive. You’ll need a range of rewards to cover what most employees would choose but they don’t have to be expensive, there are plenty of low-cost or no-cost options available. Most employees aren’t motivated by cash, so having a selection of gifts they can choose from, awarding certificates or using the CEO’s car parking spot for a week can be highly motivating.


Problem solvedNow that you know what you need to avoid when creating staff incentives, it’s time to review your current offering.

Is it aligned with your business strategy and objectives? Are the targets and goals realistic, yet challenging? Are the rewards the right rewards? If it needs changing, don’t put it off till the new budget year. It can mean the difference between the success or failure of your business.

Article source:

Sales incentives



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.

Connect with John on  | Twitter


Speak Your Mind


eighteen − 15 =