We all know that incentives work. How to make them work best, though, requires a little more thinking. The key to maximizing your incentives is to consider them in relation to the actual people you're trying to incentivize. Here are ten ways to make incentives work better.1. Make sure the performer has some skin in the game.
Perceptions towards targeted goals change when bonus incentives are tied to performance -- such as loan performance or company profits -- versus just loans issued or sales made.
2. Create a personal experience around receiving incentives.
Studies show that managers should utilize the symbolic power behind incentives by planning who will present them to achievers and how. Orchestrate celebratory experiences with the presentation of incentives. 3. Be direct about acceptable behaviors to reach goals.
Spell out how unethical behavior is wrong and how it will be dealt with if discovered. Incentives can influence people to do wrong things to get them. Highlight values the company follows. 4. Take care not to create too much inequality.
We all like to compare ourselves. Plan not to have too much inequality in bonus amounts and don't necessarily share figures or create leaderboards.5. Never let incentives take over for human motivation.
While incentives will always be a motivation enhancer, never neglect coupling them with the power of intrinsic motivation too. Build in the purposes, desires, and goals of each individual.6. Use care on the timing of distribution of your incentives.
When given too soon after action is achieved, you can create a short-term entitlement mentality. But make the incentive too delayed from the results and you lose the motivational benefit of incentives.7. Remove all obstacles preventing the outcomes you want.
Check out all barriers and potential practices and processes hindering results before using incentives. Incentives should only be used to lift levels of motivation.
8. Targeted behaviors must be consistent with organizational goals.
Individuals must never feel they're running counter to the company's overall objectives with the actions being incentivized. Behaviors being rewarded should always be aligned with company values and current strategic directives.
9. Remove potential discontent or envy between employees.
Don't be too reliant on financial incentives. Unethical behavior, dishonesty, and loss of intrinsic motivation can occur. Performance is good, but how
results are obtained is more important.
10. Build in qualitative measures besides the actual numbers.
Many incentive plans are now using measures such as quality, client satisfaction, and likelihood to recommend, in addition to the key performance metrics being incented. This is an important method to ensure the right things are being done.