Effective
Incentive Programs for Employees

During tough economic times,
a properly run incentive program can
provide just the help needed.

When correctly setup, your program should be
self-funding and can be one of the best investments you can make in your business.

Many successful businesses usually have at least one or two incentive or recognition programs in place at all times. Some serve a specific recognition purpose, such as Employee Service Awards, Sales Recognition Awards, or Safety Awards. Others are incentive programs, such as Sales Contests, and are designed to change employee behaviors, motivating them to improve performance.

Enhanced employee performance is directly related to their receiving constant positive feedback. And when this positive feedback is a key part of a formal recognition program it becomes a powerful motivator that contributes directly to your company's profitability.

Tips for an effective employee incentive program:

1. Have a Vision for your business.

   Have an image in your mind of the expected future of your business. Having a vision will not only inspire you, but will help you inspire others to reach for the same goal.

2. Define your Company Objectives

   Identify business objectives, both strategic and tactical. Each should be:
   - Specific (ie: reduce accidents, improve attendance, reach sales targets)
   - Measurable
   - Action oriented
   - Realistic and obtainable
   - Time bound (no procrastination; set target dates)
   - Easy to understand and simple.

3. Define your program

   Define the rules - how are points earned
   Define who is eligible to participate
   Establish a budget - which may break down like this example:
     - 75% of budget for Program Awards
     - 15% of budget for Program communications
     - 10% of budget for Program administration
   Set goals, varied by each job position, making sure each is attainable
   Define levels of achievement for each goal or objective
   Set point values for each goal (and for each level of achievement)
   Set a fixed duration for your program (then possibly re-start with a modified program)
   Note: employees will only be motivated when they feel they can actually attain your goals.

4. Incentive Program Administration ( points tracking / reporting )

   Determine your program tracking / administration system, including:
   - Should your program be online (internet points tracking) or offline (paper-based point-tracking)?
   - Who will track, report, post points, and communicate employee performance ?
   - Should you provide regular point statements or status emails to employees?
   - Who sets the initial budget, and tracks the incentive program’s status to budget?

   Note: For best program results, performance information must be frequently updated, and must be easily accessible to all program participants (either online or with other status updates).

5. Plan your Program's Communication / Promotion

   Give your Employee Incentive Program a name and define it’s theme. Develop an exciting promotional campaign for the launch of your new incentive program just as you would for an actual product launch. You’ll want to capture the imagination of your employees. Explain your objectives, and rewards for their success. Once employees are shown how they can make a difference, they'll do it!

   Communicate often. The most successful companies make a big deal about their winners and awards (points, etc).  Make them feel special and others will notice. Let participants or teams know their current standings in the program. If appropriate, even chart their progress on employee bulletin boards.

6. Determine the type and value of merchandise awards to offer

   Research and experience clearly indicate that non-cash, merchandise awards, are much more successful than money as incentive awards. Merchandise awards provide a continuous, long-lasting reminder of ones success, every time the award is seen or used. Read this article: Cash or Merchandise awards. Also, cash awards are taxable, while tangible merchandise used in formal service award programs and safety programs, usually are not taxable. Please contact your tax advisor for guidance with your program. See a sample online points-based award catalog.

7. Earning levels needed to motivate average participants - Guidelines

   There are many variable factors to consider, such as: employee salary/bonus compensation program, degree of difficulty attaining your incentive program’s objectives, etc

   As a general guideline – over a 12 month period – an incentive program participant should be able to earn between 1% and 5% of their gross salary for sufficient motivation.

   The above is based on industry guidelines. However, each incentive or recognition program is built based on your unique business objectives, challenges, opportunities, and budget.

8. Define Participant earning opportunities, such as:
   

   - Individual employee recognition; with weekly, monthly, or quarterly performance measurements
   - Group or Team recognition; Same frequency as above
   - Manager’s Spot award; Instant feedback plus a reward for being “caught doing the right thing”.

9. A few final thoughts...
   
   • Without an effective employee incentive program, you will never fully optimize your employee’s potential and your company’s potential.
      
   • The most successful employee incentive programs are the result of an ongoing process. For the best long term performance increases, plan to periodically adjust and improve your program.
      
   • If you’re looking for a way to implement a cost-effective incentive program that will also help improve your bottom line, please contact us today using this form.
      
   • Note: If you run your own incentive program, and would simply like discounted merchandise fulfillments, please contact us for details.
     also see: Employee Recognition awards
      
   • See this article describing two different points-based incentive programs Select-your-Gift offers: Points-Based Incentive Programs. ( more about Point-based Programs )
      
   • Wants some really amazing results from an incentive program? Start a properly designed Employee Suggestion Program. See this important article.

Let us help you develop effective employee incentive programs.
Use this Information Request Form.
We'll work with you to design an easy to use,
cost-effective way to boost employee performance.

See the Difference between Incentive and Recognition Programs
and how each plays an important role in motivating and recognizing your employees.

Please call today - We look forward to working with you.

For more information on any Select-Your-Gift product or service,
please contact us at 630-954-1287 (M-F 8am to 5pm CST), or Request information packet.