Employee Incentive Programs - Do They Work?

Incentives are said to be highly motivational influences that push one to achieve higher results. It is no wonder then that many commercial set ups adopt various incentive programs to encourage their employees to perform better thus achieving higher results for the company as a whole. However, the initial question is -- do these incentive programs work?

The answer to this lies in the reason for the underperformance of the team. If the team members feel underpaid, then a performance-related pay program (PRP) might work wonders. However, if this is not the case and the team is underperforming due to overexertion, then a PRP will be completely useless while a 'holiday package' incentive may work better. So the intensity of the effectiveness of the incentive program will depend largely on the appropriateness of the incentive plan chosen.

There are several types of employee incentive programs and depending upon the aim in mind, an appropriate one may be chosen.

Performance related pay programs are designed to encourage the employee to perform better and achieve higher target resulting in the benefit of taking home an increased pay check. These plans work very well with jobs where the data is statistical in nature. Take for example sales and marketing. For each sale that an employee makes, the company can offer a commission. This runs along the same lines as a PRP. Other incentive programs can be 'time off' certificates, which work well for those employees with the highest attendance. Then there are the impressive lunch vouchers for those who like to dine in style and, of course, the all expenses paid holiday package for two for those who enjoy travel. Tickets to the ball game are known to work wonders for those employee teams that are passionate about sports.

While incentive programs are highly varied in nature and also known to be effective if chosen wisely, employee productivity can be improved by keeping a few guidelines in mind.

It is very important to remember that the target being set is achievable. A goal, which is completely impossible, will result in failure no matter how excellent and lucrative the incentive program is.

Another important aspect here is that the working conditions must be conducive to the employees. Find out what motivates the staff. Ask them for their input. An appropriate incentive program will make the team perform better. If the incentives are not appreciated by the employees, it is likely to negatively affect their output.

Remember that incentive programs, over and above providing material benefits to the employee, also act as a win-win status. Take the time to announce the incentives along with expectations and deliverables. Celebrate and announce the employees who meet these milestones!

When a team is not performing well, a thorough analysis should be conducted. One on one discussion with the employees is an integral part of the process, to understand which incentive program will work best. Once a plan has been implemented an established, a regular assessment should be conducted to determine how effective the results, and changes should be implemented on a continuous basis.