The Importance Of Incentive Plans For your Employees
Employees are perhaps one of the most valuable components of any business, and while keeping them content and motivated is essential, it can often be quite a challenge. One formal approach to rewarding and motivating employees, uses what is called an ‘incentive plan’.
An incentive plan is a formal method of offering recognition and reward to employees, when they go on to meet goals and/or objectives that have previously been set for them. An incentive plan may involve a cash bonus, profit sharing, extra paid leave or items from a wide range of gifts such as vouchers or corporate merchandise.
Such plans however, can only be effective when the goals and objectives are set out clearly to both employee and employer, and when the reward for achieving results is considered of ample value as an incentive.
What are the benefits of incentive plans?
These plans can be used as motivational tools, and should encourage employees to want to meet their goals and objectives in an effective and timely manner. When employees are highly driven and motivated, it stands to reason that productivity will naturally increase. An increase in productivity is usually followed by an increase in profit for your business, making incentive plans useful for both employee and employer.
Incentive plans are also great for encouraging team work; if the plan is linked to a team of employees who are working collaboratively towards the same goals and objectives, then this can be hugely motivating and rewarding for everyone involved. Team members will actively encourage one another if they know that only with a collective result, will they be afforded any kind of bonus.Those employees who are not usually among the highest of performers, may also feel pressured into stepping up their game to prevent letting their
colleagues down.
The potential for incentive plans to boost the morale of the workforce, is also high, and overall job satisfaction should increase as a direct result. As employees learn to see the connection between the speed and standard of their work, and the potential for them to earn more, their morale will be elevated and as an employer, you may even find that you’re able to keep hold of your staff, for longer. Recruiting, hiring and training new staff can be costly and time consuming, so once again, an incentive plan works effectively for both
parties. Not only that, but content and motivated employees are far less likely to be absent on a regular basis, something which can also help improve the bottom line of a company.
When a workforce is actively competing to meet objectives and goals set for them by their employer, this can even reflect in the levels of customer communication and satisfaction. When clients are being treated well, they are more likely to become repeat customers and share their positive experience with others.
It’s clear to see just how effective and important, a good incentive plan can be for boosting employee morale and improving customer relations, but it’s imperative that the goals and objectives be clearly defined. You will also want to consider whether you put individual incentive plans into place, or whether you choose to reward teamwork instead.