Ten Top Tips: Successful incentive schemes

Need to get some more motivation out of your employees? Steve Baker explains how to properly execute an incentive scheme.

by Steve Baker
Last Updated: 18 Jul 2016

Identify the objectives

It is important that you are clear about what you are trying to achieve through your incentive scheme. This will help you measure its effect and determine the value it can add to your business. Some examples of objectives are as follows:

  • Increasing turnover
  • Increasing margin
  • Improving service
  • Targeting specific products
  • Decreasing costs
  • Improving green credentials
  • Enhancing staff skills
  • Resolving complaints

Setting a budget

    Many incentive schemes can be largely self-funding but here are some of the associated costs you may want to consider:

    • Design (posters, web and or intranet etc)
    • Communication of the scheme (e.g. printing costs of design items)
    • Rewards (as small or as grand as your budget will allow)
    • Transportation and or postage of awards
    • Certificates
    • Tax and National Insurance contributions

    Identifying the audience

      Once you are clear on what you want to achieve from the incentive and the budget available, you need to ascertain whose job it will be to make this happen. Here are some points you may want to consider:

      • Can all your staff contribute to the overall goal or will this be restricted to certain members of the team or specific departments?
      • Will you de-motivate some of the staff if not everyone is involved?
      • Can you implement a separate programme which will assist with the overall objective and will include everyone?

      Setting targets

        If your objectives are very specific (i.e. increase sales by 10%) then setting individual or team targets should be fairly straightforward. Here are some things to remember:

        • All targets must be measurable
        • Targets must be challenging but achievable. If not you will not achieve your objective and also risk de-motivating staff
        • Targets for individuals will automatically promote healthy competition between peers
        • Targets for teams will encourage camaraderie and develop/strengthen teamwork
        • Linking individual targets with the overall corporate objectives will really engage the staff

        Deciding on timescales

          All incentive schemes need a clear start and end date so that participants know how long they have to achieve their goals. There may be occasions when the duration of the scheme is extended, but the timelines must be communicated before the scheme commences. The length of the scheme is dependant on what you want to achieve; however, here are some guidelines:

          • The average duration of a sales incentive is six to eight weeks
          • Short bursts of two weeks often work well as they really concentrate the effort
          • Incentive schemes relating to service are usually more effective if run over a longer period of time (12+ weeks)
          • Specialist schemes requiring a major change in behaviour (e.g. environmental schemes) will require a much longer duration to achieve an ongoing improvement

          Selecting appropriate rewards

            If your key objective is more about motivating your staff to make small improvements, your choice of rewards will be very different from a scheme which really stretches the participants in either behaviour or achievement. As you will be rewarding different types of people with different tastes, the most important thing to remember is that giving your staff a choice of reward is a key factor. The most popular types of rewards are:

            • Vouchers
            • Merchandise
            • Pamper / experience days
            • Incentive travel
            • Prepayment cards

            Launch

              It is imperative that the details of the incentive scheme are communicated clearly and concisely to the target audience. If the participants do not understand what is expected of them, they will not achieve the objectives of the programme and your time will have been wasted. Some tips for clear communication:

              • Use a variety of communication methods (e.g. brochures, posters, pocket cards, CD, intranet, microsite, personal letter etc.)
              • The performance system should be totally transparent so staff can see each other’s performance
              • Targets must be communicated clearly and not be altered after launch (if there is a need to stretch the targets further, you should either complete one programme and commence a new one or introduce an additional incentive)

              Ongoing

                Communication is not just about the launch of the incentive scheme – you will need to continually update the participants on how they are doing individually and also on the overall incentive scheme:

                • Regular performance updates will maintain momentum throughout the incentive
                • Highlighting exceptional performances will stimulate all participants to strive for recognition

                Results

                Once the incentive scheme has come to an end, the participants will be eager to see the overall results. This gives you the opportunity to reinforce the value and purpose of the incentive scheme as well as recognising the best individual performances:

                • Recognition in front of peers is highly motivational
                • Award events are a popular way of thanking the participants for their contribution and encouraging similar behaviour in future incentive schemes

                Measurement

                  If this is your first time running an incentive scheme, checking what worked well (and not so well) is vital to any future scheme you may implement. You can measure the success of the incentive scheme in various ways:

                  • Numerically-based elements (e.g. sales, costs etc.) can easily be measured with reports available within your business
                  • Softer targets such as service-related elements should have been logged throughout the incentive
                  • Ask the participants. The best feedback you can get is from the people who took part in the incentive. This will give you a direct view of the target criteria used, the duration, the communication and the rewards.

                   

                  Steve Baker is head of recognition and incentives at Grass Roots.

                  Picture credit: Alan O'Rourke/Flickr

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