There a number of factors that organizations need to consider when putting incentive compensation management to use in the workforce. A strategy that outlines how these rewards will be created, managed, monitored and delivered is critical for ensuring that personnel accept the solution. What's more, determining the bonuses that employees want most is necessary in order to get the most people motivated into earning them at all. With so many different aspects of compensation to consider, there are a few top targets that organizations should aim for.
According to The Growth Business, laying out the who, what, where, when, why and how of incentive plans is the first thing that firms need to do. Business leaders need to ensure that they hit all of these critical elements before trying to create and implement any kind of rewards strategy.
Who do managers want to reward? Simply making a blanket determination that sales professionals deserve bonuses fails to differentiate between the different levels of commitment people put in, the part they played in individual sales and ongoing effort with the client. Should some people be rewarded more than others?
What kind of compensation plan do companies want to offer? Will they give away monetary bonuses, or do they want to offer stock options? There's also a growing popularity in providing alternative bonuses, such as remote work options, corporate travel and health and wellness packages.
Having a way of monitoring employee progress toward incentive goals is important for both managers and individual staff members. The compensation solution packages provide outlets for gamification and personal interactions that inform them of various bonuses and show how well they're coming along in earning them. The closer employees get to a desired reward, the harder they may work.
WHEN AND HOW?
The pacing of incentive dispersal needs to be timely enough that employees feel like their efforts are being acknowledged. Granting bonuses the day-of may be difficult if firms only participate in one kind of incentive option, while waiting weeks to hand out bonus checks could reduce the effectiveness of these awards. This is also directly related to how companies want to be able to provide rewards. If a direct deposit is in order, there has to be a means of alerting employees to when it's happening and how much they earned.
One of the most important questions organizations should ask before implementing any kind of incentive plan is why they want to do so. Oftentimes this question elicits a simple answer regarding improved performance or heightened productivity, but companies need to ensure that their goals are firmly in place before investing in solutions that may help them reach these targets.