What Makes Employee Incentives Work

Incentives are given to employees for 2 common reasons: to motivate employees and to ensure the salesforce's commitment to a new project of product. Either way, incentives work to increase the performance of employees and in turn, would increase the profit of the business.

Incentives, however, do not automatically equate to higher profit for the company. This is because there are factors that must be present in any incentive program to succeed. Here are those:

Type of incentive.

It is not enough to motivate your employees simply by offering them incentives if they achieve a quota or the requirement. The type of incentive that they will receive plays a major role whether or not the employees will respond. Incentives must speak for themselves. It should be the motivating factor for employees. Make sure that the type of incentive should be a thing to look forward to. It should be interesting. Some common types of incentives are cash bonus, travel package, and merchandise.

Incentive Structure

It is easy to give incentives to employees that outperform the rest but it is not always simple to motivate your employees to outperform one another. This is because incentive, to be accepted by the salesforce, must be well-structured. This does not mean that incentives should be technical, rather it must be simple yet comprehensive.

A well-structured incentive program should be clear to all employees. It may not be applicable to all (since employees have different motivating factors) but at least, it adapts to the majority. Structure of the incentive program should define everything that is needed to know by the employees. It should have a clear definition of how the awards are won. Most incentive programs fail because of the inability to define a clear structure on how to claim the reward on the part of the management.

Timetable.

The gap between winning and receiving is another factor that plays a major role whether the employees will strive to achieve the incentive or not. Too long and the employees will lack interest on the incentive. Too short and the employees will not have time to achieve it. The gap between winning and receiving should not be more than 2 months and not be less than 2 weeks. The ideal time between winning and receiving is between 4 to 6 weeks.

Promotion, communication, and coaching

When you attempt to motivate your employees, you attempt to change their behavior. And if you promote, communicate, and coach your employees, you are targeting their behavior that would result to a long term boost of performance. Rewards increase performance too but it is just for the short term. You need these 3 to sustain the boost.

Recognition

People love to be in the limelight. People also envy those who are in the limelight. Use this to boost the performance of your employees. Whoever performs in your salesforce well must be recognized in front of the employees. This gives him more energy to perform more in the future. And those who are not recognized will strive more so that they will be recognized as well. Give them what they want to receive- and oftentimes a simple "thank you" would do. Remember: there is no such a thing as too much recognition. If you know that someone deserves to be recognized for his achievement, do not hesitate to do so.