Planning out and funding an incentive program may seem difficult, but following a few simple rules and taking a few suggestions can make the process rewarding and easy. Set out a budget Regardless of the type of incentive program that will ultimately serve a company’s employees, setting up a budget should be the first step. According to Incentive Marketing, the most important elements to consider while budgeting for a merit-based plan are the number of eligible employees, the duration of the program, and the anticipated outcome. A program that applies to all employees and lasts a full fiscal year will undoubtedly be more expensive than a month-program only available to the sales or finance departments. If a company is experiencing some hardship but still wants to increase sales and productivity, short sales competitions are a great option to consider. Setting up incentives such as cash rewards for most sales made in a specific week or month can keep employees motivated without costing the company an overwhelming amount of money. It may be more difficult to set up incentive programs for non-sales departments, since tangible results are not as readily available for analysis. Budgeting for non-sales workers may be the key to keeping an entire office happy, however, and so should be considered as part of an incentive program. Recognizing employees for improved productivity or increased office safety are effective ways to reward those who don’t have the benefit of producing easily quantifiable results at the end of each month. Measure performance Once a budget has been set out for the compensation plan, the next step is establishing a means to measure overall work performance. This can include looking at surpassed sales goals, new clients gained, overall customer satisfaction or individual performance improvement. The use of sales analytics and historical data may be required to gain an understanding of how best to measure performance against company trends. As this can quickly become complicated, many HR representatives and managers have begun using sales compensation software to sort out which plan is best and how to measure employee performance. When establishing a plan, it is important to remember to set out realistic challenges. If a goal is unattainable to everyone but the highest performers, other employees may become discouraged and will not be motivated to improve their performance. Instead, a plan which rewards all employees who surpass a realistic goal will motivate employees and will make measuring performance straightforward and simple. Recognize employees Incentives are vital to keeping employees motivated, particularly in a sales-driven environment. Showing recognition through monetary compensation will make employees feel appreciated and keep them striving for excellence. Recognition is most effective in a plan which includes human elements. If a company is going through hard economic times and cannot afford to create as large an incentive program as they would like, HR should still budget some money for incentives. Once a budget has been created, adding in extra touches can make employees feel greatly appreciated. In between monetary merit increases or bonuses, the Society for Human Resource Management recommends recognizing employees by sending out a handwritten note to a high achiever or someone who has made great improvements over the previous month. Or, when clients send in thank-you emails or notes congratulating a company on its good work, these can then be printed out on individual colored note cards and given to employees who contributed to the success of the account. This shows employees that supervisors are not out to take all the credit for company work, and that each employee is important to making the company run.
