Monday I discussed the first five of the top ten most common incentive program mistakes and how to avoid them. By preventing or avoiding these pitfalls, you can truly maximize the impact an employee incentive program has on your organization. The following five mistakes are also easily preventable for companies.
Do Not: Target just the top performers in the organization with employee incentives
Do: Target the right amount of employees to maximize incentive program potential
A typical company contains both high performing employees and average employees. Many organizations provide incentives to only the top 10% of employees. If the top 10% improves by 20%, then your overall incentive program results would still only be 2% better. By tailoring goals to be relevant and attainable to average performing employees, or say 80% of the workforce, if you could increase performance by just 5%, then the overall results soar to 4%.
Do Not: Develop an incentive program and then fail to evaluate it with available reporting
Do: Regularly analyze the impact of and adjust the incentive program as needed
Long term employee incentive programs should be evaluated on a quarterly basis while short term incentive programs require more frequent reporting. Taking time throughout the year will help you to be more prepared when it comes time to planning the incentive program budget and objectives for next year.
Do Not: Implement an incentive program or make changes to an existing one without communicating to participants
Do: Communicate with participants of an incentive program through different media
Depending on the people my clients are trying to communicate with I have seen incentive programs kickoff with announcement emails, posters, formal and informal meetings, mailed program welcome letters and many other media. All of these tools allow organizations to begin a dialogue of what objectives and purpose the incentive program aims to achieve and how it is relevant to each individual. Incentive program communication will help to maximize participation and the potential of the program.
Do Not: Cap point earnings so that people slack off during periods they cannot earn points
Do: Budget the incentive program so that employees seldom reach the capped amount well before the end of the period
Incentive programs should consistently motivate employees. Gauging the actual budget of an employee incentive program is a process that gets better over time. Many times at the beginning of a new budget year, my clients will adjust the points awarded for each goal in the incentive program to ensure recipients can meet goals and earn awards throughout the period. Do Not: Give negative points when participants fail to reach an objective Do: Award points when employees reach goals Organizations that implement employee incentive programs tend to only award points when employees reach goals and do not allow employees to have a negative point balance. However, when disciplinary action has been taken against an employee, I would suggest that the person’s incentive account be temporarily suspended or that he or she not be allowed to earn points for a certain time period following disciplinary action. Positive reinforcement is always the best way to motivate employees and by giving negative points to participants who do not meet a goal, you are giving negative reinforcement that can backfire and kill employee motivation.
I have come across these common incentive program mistakes and would love to hear your comments on any award program mistakes you have made or experienced as an employee.