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Importance of Incentive Plans | Chron.com

https://smallbusiness.chron.com/importance-incentive-plans-75495.html

smallbusiness.chron.com

Importance of Incentive Plans | Chron.com
Incentive plans are formalized approaches to offering recognition and reward to employees for meeting pre-established goals or objectives. Incentives may include cash bonuses, profit sharing, additional paid vacation time or any range of prizes such as gift cards, corporate merchandise or other products or services. ...

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Incentive Program Essentials

  • Goals and objectives should be clearly defined for staffers.
  • Workload should be equitably distributed to avoid resentment from staffers who feel they have to carry poor-performing team members.
  • Consider both individual and group incentives to promote the concepts of solo effort and teamwork.

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Effects Of Incentives On Business

Effects Of Incentives On Business
  • Motivational Tool: Incentive programs motivate employees to be more productive and consequentially increase the company’s earnings.
  • Promoting Teamwork: members of teams that earn bonus according to collective productivity may support and encourage each other to perform at top levels. 
  • Morale Boosters: if employees see a direct correlation between effort and earnings morale and job satisfaction increases while turnover and absenteeism decreases.
  • Service Levels: employees competing for or striving to meet the goals of an incentive plan may provide higher degrees of service to your customers. 

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Tips To Establish A Benign Incentives Program

Tips To Establish A Benign Incentives Program
  • Ongoing feedback from both customers and employees can help provide an indication of how well these programs are working.
  • Deal with issues directly and transparently to ...

The Cons Of Incentive Programs

  • May Encourage Deception: Employees may look for ways to make their performance appear to be good when it isn’t.
  • Misaligned Incentives: poorly conceived ones may incentivize risky and irresponsible behavior that undermines the mission of the company. 
  • Can Lead to Conflict: iI competitive workplaces with limited rewards, employees may engage in bad behavior to get ahead or become convinced that pursuing incentives is a zero-sum proposition and become resentful. 

The Pros Of Incentive Programs

  • Increased Productivity: Rewarding the delivery of tangible results reinforces that good work will be rewarded. 
  • Strengthens Succession Pipeline: Employees often try to improve their skills in the pursuit of incentives, ultimately increasing their own efficiency. 
  • Encourages Retention: A good incentive program increases employee job satisfaction and overall loyalty to the organization. 

Introduce some greenery

One study found that workers in spaces with plants showed a 15 % higher productivity compared to those in plain...

Show appreciation

Creating motivation and making your team feel appreciated is a critical part of long-term productivity.

Encourage your team to keep gratitude journals - writing down a couple of sentences about what you are currently grateful for a couple of times a week. This practice improves productivity by increasing happiness.

Create some privacy

If people can't focus on their work, they are less effective in areas like collaboration and learning, and they are less likely to be satisfied with their jobs.

Workplaces with a balance between individual focus and collaboration are more innovative, creative and encouraging.

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The right time to ask

  • How is the financial health of the company? If the company is not doing well, this is not the time to ask for a raise. 
  • How is your manager’s workload? If your manag...

Get salary trends

Every job has a market value. 

  • Compare what you’re currently being paid to the trends you find.

  • Consider your education, years of experience, years you’ve worked for your current employer and any specialized skills or attributes you bring to the table. 

  • Make a list of your accomplishments, taking note of which ones added the most value to the organization

  • Identify a salary range or percentage increase in pay that you’d be happy with. 

Set a meeting

Meet in person and in private. 

You should approach asking for a raise with the same level of seriousness you would have for a job interview or an important presentation, and you should dress accordingly.