Take Employee Recognition To The Next Level With Employee Incentive Plans
photo credit: Chuck “Caveman” Coker 
As an manager, you understand the employee behaviors that create success, but how do you motivate your employees to apply them more consistently?
Maybe the tool you need is an employee incentive plan with the right rewards.
An incentive plan ties employee behaviors and company performance to employee rewards. As an employee recognition method, an incentive plan provides maximum leverage for increasing employee productivity, loyalty, and morale. By coupling performance and reward together, your business gets employees who are driven by accomplishing goals rather than who just show up to do minimum work and get a paycheck.
Below is a brief description of the most common employee incentive plans for you to consider. Select the combination that best fits your business objectives.
Productivity Based Incentives
In this type of plan, the objective is to increase production on a time basis. As an example, if you make widgets, then if production increases by 10%/month, then the team gets a reward. If it increases by 20% the team gets a larger more valuable reward. These types of plans can be tailored for either team or individual performance.
Industry Comparison Incentives
In this plan, incentives are based upon how a person or company exceeds some average industry benchmark by a certain percentage. Typical examples are sales goals and safety goals.
Internal Company Metrics Incentives
This type of incentive plan rewards employees for exceeding certain internal company metrics. Typically these metrics have been identified as critical success factors for your business. They can range from things like recruitment goals, first pass quality goals, or absenteeism goals. In most cases, the goal is based upon a certain percentage improvement over the previous best performance.
Employee Service Incentives
This type of incentive plan rewards employees for years of service to your company. Typically the rewards increase in value as each year milestones is reached. These types of plans increase employee retention and loyalty.
Long-term Compensation Incentives
These type of incentive plans offer delayed rewards for employee who remain with the company for a certain time. Typical examples are stock options or company equity positions for loyal employees.
The primary values of these plans are to prevent your most desirable employees from leaving and to reward them for helping the company succeed over a longer time period. Employee ownership and retention are improved because it is difficult to leave for a small percentage increase in pay when the potential long-term reward is significant.
If you would like to create an employee incentive plan, there are many third party companies who can help. Most offer assistance in plan development, plan evaluation, reward selection, and even plan administration. They really make it easy to implement the right plan for your business.
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Filed Under Employee Incentives, Employee Morale, Employee Productivity, Employee Retention Ideas, Recognition Ideas | Leave a Comment
Tagged With Company Metrics, Employee Incentive Plans, Employee Incentives, Employee Loyalty, Employee Morale, Employee Recognition Program, Employee Retention, Increase Employee Morale, Increase Employee Productivity, Industry Benchmark, Motivating Employees, Stock Options
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