“What gets measured gets done. What gets measured and fed back gets done well.
What gets rewarded gets repeated.”
– John E. Jones (1935 – 2003)
Setting up an Individual Incentive program that makes a real difference to your business requires special considerations:
Create your program around individual team members.
Consider each job description and create a base level of performance that is expected. For this base level of performance, the employee is compensated with their annual salary. Then determine an achievable goal, within a set period of time, which is the target to strive toward. If that target is reached, an ideal reward is provided.
Determine the budget.
If that target goal is reached, how much of your bottom line increased? Determine the share of that increase to divide between team members who helped attain that goal. This method provides your budget.
The program should be simple.
Avoid complicated, convoluted rules and systems. Each team member should be able to easily track his or her own success towards achieving the target goal.
Create a program that the employee can control.
The incentive must be linked to tasks the employee can control, such as increased sales revenue for an Account Manager. The focus should be on factors that are within the control of the individual, even if some of their success is influenced by outside factors, such as the performance of the company as a whole.
Reward frequently to keep motivation and engagement high.
Rather than waiting until the end of the fiscal year to reward top performers who reach their targets, remunerate frequently to keep motivation high. Compensate in smaller increments more often (ie. quarterly) than one large sum annually.
Determine a meaningful reward.
Ideally an Individual Incentive should be customized for the team member. What appeals to a near retiree that has travelled the world twice over may not appeal to a parent of a toddler or a single in search of adventure. The reward needs to be desired by participants in order to be effective.
Once the incentive program is in place and launched, do not make changes.
If you modify incentive program goals mid-program, you run the risk of creating distrust and disrespect between the team members and management. Any change will be demotivating. The program must keep consistent, with the simple and clear rule structure outlined at the onset.
The key to keeping your audience motivated and moving forward is to keep them engaged. Communicate frequently through a variety of media options, providing status reports, teasers, peer support, and other communication tools.
