Here have a pay rise and a free coffee – Why incentives are important to successful businesses
More money. That is the answer, isn’t it? More money. If you want to build a strong team, keep them with you and make sure they perform, then all you need to do is pay slightly more than the competition, and you will get the best. Well, no, sorry, but you probably won’t get the best. You may get the greediest, if you are really lucky, you may even get some good people on the way up to being the best, but will you get the best? Probably not. Will you develop the best over time? Again, the odds are against it.
I am guessing that nobody reading this is surprised by the above. It stands to reason that the best people are already earning enough to be happy, so a pound here and there is not going to make them move to you.
The same is true when you are looking to build and retain a great team. You need to pay them appropriately, of course you do, but that is not going to be a huge factor in their decision to stay with you because, if they are good, they can get an appropriate salary elsewhere. That said, monetary reward can be a good incentive if used correctly.
It is a universal truth that satisfied and incentivised teams work better together and achieve more. However, this is not achieved overnight, and there are a lot of factors involved. Incentives are just one of the things that go to create a team of people who have job satisfaction, but they are a powerful tool when it comes to keeping and developing a great workforce. So here are a few thoughts on incentives.
- Get back to the basics and remind yourself they are there to make your team want to achieve. Every time you are looking for an incentive boost for your team, ask yourself if they would actually want what you intend to offer. The monetary value of the incentive is not a factor in whether someone appreciates it or not. On the same subject, be careful of the ‘I’ factor. Over the years, I have seen many an incentive offered that involved a trip somewhere with a member of the management team to do something the manager really wanted to do. That’s usually the opposite of an incentive.
- In a similar vein as the above, beware of accidentally playing favourites and incentivising one part of the team more than the rest. Sales teams may well be very visible when they bring in the orders (and of course you should make sure they are rewarded) but aren’t they also financially rewarded in terms of commissions, bonuses and so on? They can’t do their job without everyone else, so make sure the good times roll for everyone. Resentment soon builds if people feel forgotten or not valued.
- Have you tried asking? Why not let the team decide what sort of thing they would like as a reward for achievement, after all, they will know best won’t they?
- Clear line of sight on promotion and development opportunities is a very big incentive to a career-minded employee. Promotion and the opportunity to attend conferences/trade shows or formal training can be really motivating if they are clear. Saying ‘Hey, do well, and you will get a promotion one day’ isn’t going to cut it. It needs to be a clear set of key performance indicators (KPIs) that will then ensure promotion happens. Not only is a visible achievement that results in career development good for the individual, it also sends a message that excellence is rewarded.
- No jam tomorrow incentives. What I mean by this is an incentive must be specific and timed, preferably with regular updates of progress towards the goal. Otherwise, you are just saying there may only be bread today, but tomorrow there will be jam if you do well. It’s nebulous and ineffective if you do not set very specific KPIs.
- Small doesn’t mean ineffective. A lavish Christmas event if everyone hits target is great but what about the rest of the year? Small things such as a free lunch or leaving an hour early on Friday are often really valued by the team.
A really good incentive will ‘create’ something as well as reward something, so for it to have the best result, it should not only recognise achievement it, should encourage a behavioural or practical change. It is important to blend the reward with your expectations of the team. So free lunch Friday is not really about the lunch, it is about the team eating that lunch together to celebrate the achievement. If you incentivise for sales, it’s a good idea to make sure that the incentive KPIs also includes your quality expectations.
Whatever you choose as an incentive the real challenge is to make it work for you and generate continued loyalty, the expectation that excellence will be rewarded and that the team are all working towards a goal. An extra £5 a month a free coffee isn’t going to do that but a well-considered, varied, appropriate and above all else achievable incentive programme with clear KPIs certainly will.