Offering monetary incentives to employees can help businesses get better performances out of personnel. These programs can short circuit growth if not implemented properly, however. Knowing how to tell the difference between these two scenarios is vital, as companies could be significantly handicapping themselves by using systems that they would usually assume to be best for business and employee improvement.

CRN Online wrote that one of the best signs of such a situation is when sales compensation plans become more of a headache and a financial strain than they are a benefit to staff performance. Sometimes sales personnel may spend too much time reviewing their incentive plans and driving solutions that offer the highest rewards, rather than those that best benefit the business. On other occasions, corporations may notice that the time it takes to administer these incentive programs is costing too much in comparison to the benefits it derives from sales personnel. This could be indicative of systems that no longer work the way they're meant to.

On the one hand, length processing may be expected by some organizations, especially if they have a number of different kinds of employees participating in these programs. CRN Online wrote that various personnel types need different incentive compensation management. On the other hand, these plans need to be simple and easy to administer, so if they're slowing down business growth and productivity, retooling these options is the best option for improving employee output.

Taking a fresh look at incentives
In order to make the biggest impression with these incentive compensation programs, it may be wise  to revamp them in an entirely new direction. Payscale recommended investing in smaller, smarter rewards for employees, so that they can get more use out of their options and companies can enjoy a better return on these investments.

For instance, instead of simply handing out money and financial bonuses, companies can offer more paid days off, travel incentives or investment solutions. Even advanced or specialized training options can be seen as a desirable bonus when combined with the right kind of incentive management programs, resulting in better training and knowledge for personnel as a reward, instead of just an extension of talent management functions.

There are a number of ways to execute better incentive compensation solutions. Businesses need to identify first that these systems aren't working right in order to fix underlying capital and operations issues.