Motivation of staff can be a challenge in any organization. Even the best manager can’t read minds, so ongoing communication, understanding employee expectations, and utilizing daily feedback are all keys to aligning employee compensation and performance. But before you implement any type of incentive compensation to improve employee motivation, be sure you know what activities you want to incentivize.
"When you’re designing an incentive plan or you’re reviewing an incentive plan to see if indeed it works, you want to always consider: what’s the key behavior that you want to motivate?" Lisa L. Hunter advised during a recent BLR webinar. What is the key business outcome desired?
Once you have answered that question, then you can get into the more detailed aspects of putting your incentive plan together in a way that increases the motivation of staff to reach the organization’s goals. You need to determine:
- What is the appropriate eligible population? In other words, who can earn this incentive compensation and who cannot?
- What measurement criteria will you use? Be sure to measure the specific behavior you want to motivate.
- What is the target award level? What will be paid out under various different scenarios? Be sure to check the "what ifs" – what will happen under various possible situations.
- What is the best payout method and frequency to truly increase the level of motivation of staff members?
- What administrative guidelines will you have? What communication will you use? How will you implement the program and follow-up?
"If you consider all of those elements, you’ll be able to see if you have a plan that effectively supports your strategy." Hunter explained. Be sure to evaluate the outcome and impact of the plan. If it doesn’t perform as expected – change it! When evaluating your incentive plan, ask yourself:
- Does the plan get attention and increase the motivation of staff members?
- Do people understand it? As a result do people know more and understand more about the business?
- Does the plan actually result in greater results, productivity, and/or profits?
- Does plan payout (or withhold) when it should to motivate the right behavior?
By asking yourself these questions early in the process, you will be well on your way to setting up an incentive program that truly works to improve the motivation of staff in a way that improves the bottom line!
For more information on using incentives to improve motivation, order the bootcamp recording of "Employee Performance Management: Retain Top Talent, Improve Productivity, and Stay Competitive." To register for a future bootcamp or webinar, visit http://catalog.blr.com/audio.
Lisa L. Hunter is the founder of the Newport Consulting Group, Inc. a firm specializing in developing comprehensive compensation programs and enhancing organizational effectiveness. She advises clients on a broad range of issues, including total rewards strategy, executive compensation, linking compensation with business strategy, performance management, and organizational change.