The do's and don'ts of incentive schemes
Incentive schemes can have great benefits both for your business and your staff. Rewarding good performance motivates your star employees, and encourages others to emulate their achievements. However, there are pitfalls, so tread carefully when devising an incentive scheme. Here are some do's and don'ts:
DO reward results
DON'T reward activities
DO set targets that encourage employees to maximise profit opportunities
DON'T set targets that do not fit in with your overall objectives
DO reward results in proportion to the extra profit they generate
DON'T set upper limits to the amount that can be earned in incentive payments
DO use incentives to take overall pay to the high end of the market
DON'T tamper with basic pay levels - keep them at competitive market rates
DO use equitable criteria so that everyone feels equally motivated
DON'T forget to communicate the successes and failures to all concerned on a regular basis
DO fund incentive schemes from the additional revenues they generate
DON'T make promises you can't afford to keep!
Call us if you would like help in developing strategies for motivating employees and reducing staff turnover.