Breaking it down: Employee Incentive Programs
Employee incentive programs are meant to motivate workers with the promise of a reward such as a bonus or a gift. However, many companies find that incentive programs often don’t yield the results they were hoping for. Owners and managers are left wondering why performance isn’t where it should be after all the rewards they are offering are so enticing! So why exactly do incentive programs fail?
Why Is My Incentive Program Failing?
If an incentive program is bogged down with confusing rules, your employees may not understand it or feel it is unfair. Rather than boosting your employees’ morale and incentive to work harder, it could have the opposite effect.
Many incentive programs rely on human data entry and manual calculations, which can easily be fudged or suffer from human error. This will be especially detrimental to employee morale if employees feel errors were made and nothing was done to resolve the issue.
Many employee incentive programs focus on recognizing tenure over employee performance. While it is important to recognize employees who stay with the company for a long time, you have to consider the message this could send if tenured employees don’t set a good example in other areas. For example, what if the employee has been placed on probation in the past, or only produces mediocre results? Effective recognition should value real accomplishments, not just the number of years an employee has been with the company.
Many employers give awards at a ceremony once a year. This is because they want to make a big deal about it. However, when you celebrate everyone all at once, it can diminish the effect you are trying to achieve. Instead, celebrate employee accomplishments in real-time, as they happen.
It is also important to remember that not all generations respond to the same type of awards. For example, Baby Boomers are far more likely to stay in the same job for years, so an incentive for longevity may work for them. However, Millennials, who are more likely to change jobs every few years, are far less likely to respond to a longevity incentive. For your employee recognition program to work, you must consider your audience.
What Can I Do About It?
Your incentive program can be successful if you implement it correctly. Here are a few tips to help you improve your incentive program:
- Pay attention to what your employees talk about, are interested in, and what their focus is. Knowing these things can often help you determine what motivates them.
- You can also ask your employees what you can do to help keep them motivated or what makes them feel rewarded. Maybe it is cash bonuses, some extra time off, or sincere praise offered in front of their peers. The important thing is that is tailored to them.
- Implement a robust time-and-attendance system or other non-human run application that will correctly calculate the data that determines who should receive incentives. By doing so, you will eliminate the possibility of favoritism and human error.
- Educate your employees so they will thoroughly understand how bonuses and other incentive rewards are calculated and given. You should also help employees understand their own performance and accountability.