How to improve your incentive programmes

1. Provide immediate and continuous feedback and rewards

Generation Y and Generation X employees respond best to immediate reinforcement. Behaviors are shaped by closely tying praise and rewards with activities. Delaying rewards until the end of a quarter, month or week significantly reduces their value and benefit.

2. Look at an incentive programme as ongoing

y Long-term incentive programmes produce twice the results of

short-term ones. If youre serious about permanently improving KPIs, an incentive programme must be continuous.

3. Give small daily rewards

y Rather than offer monthly, quarterly and annual rewards,

examine the sub-components that comprise them. A small daily reward for attendance with additional rewards for five days in a row will produce better results than a monthly perfect attendance award. Reward the daily homework, and the final grade will take care of itself

4. Offer a choice of rewards

y Management cant be clairvoyant when selecting rewards.

Award certificates and plaques look nice on the wall but do not change behaviour. Employees want to choose their reward - for example a reloadable debit card, although extra time off or other intangibles are also very popular.

5. Do keep it positive, fair, fun and exciting when earning awards

y Everyone who qualifies must win something. The exciting part is

finding out the amount. Playing games that generate a random number of reward points adds excitement to earning awards. Whether its spin the wheel, throw a dart, toss the beanbag or draw a number from a hat, not knowing the number of points brings suspense and heightens interest, further reinforcing the activity. Broadcast the names of big winners to keep the buzz going.

6. Dont spread rewards too thin

y Trying to monitor and reward too many metrics can cause

each to have insufficient value to achieve employee focus.

7. Dont distribute rewards in the payroll

By paying rewards separately from payroll, they are seen as special in the eyes of the recipient, reinforcing how the reward was earned. Additionally, the employee can spend the reward without waiting until their next pay-day.

8. Keep it simple by avoiding conflicting goals and objectives

The law of unintended consequences can cause conflicts. A goal of a higher sales conversion rate will increase average handle times. Improvements in quality scores or schedule adherence along with reduced turnover and absenteeism will undoubtedly lead to improvements in all other metrics as well.

9. Measure the ROI

If youre not measuring the return on investment (ROI) of your incentive programme, how can it be justified? An incentive programme is the same as any other function; it must be continuously evaluated and tested with control groups or benchmarked with peers.

10. Dont overload yourself with programme administration

Too great an administrative burden can cause burnout of even the best incentive programme administrators. Managements attitude and opinion of your incentive programme is clearly visible to participants.

11. Do involve management

y Team leaders, supervisors and managers should participate in

your incentive programme. They should earn rewards themselves and distribute ad hoc or discretionary awards.

12. Do ask for feedback and keep it fresh

y Take regular surveys of the participants to see what they like

or want changed. Respond quickly to input. Actively solicit feedback and reward it.

13. Do brag about your incentive programme

y Use employee comments about your incentive programme in

the careers section of your website and in recruitment brochures.

14. Participate in outside surveys

y A great way to evaluate your incentive programme against

peer groups is to participate in surveys. Many are anonymous and often participation entitles you to a free copy of the report.

15. Dont spend more than necessary

y Spending more than 3 per cent of base pay on incentives does

not produce additional benefits. Most companies spend 1 to 2 per cent of base pay or about two hours of salary cost per month and achieve excellent results. Staying within budget will ensure that the programme continues and has an excellent ROI.