All for One…

Most small business owners approach employee incentives with mixed emotions.They want to provide some system that creates a sense of urgency and responsibility in their employees, but they don’t want to give up too much of an already thin bottom line.

It isn’t greed as much as the constant awareness of the early days, when the entrepreneur worked endless hours for a pittance. Now that some of that is finally bearing fruit, she is being asked to share a chunk of it to get her workers to do what they should be doing anyway. The most common protest that I hear is “But I am paying them to do the job. Why should I have to pay them more if they actually do it right?”

Of course, if you could be sure that incentives were guaranteed to dramatically increase performance in a way that vastly grew your bottom line, you’d have no problem putting them in place for every person in the company. Why then is there such resistance to creating motivational rewards?

The answer is clear. Many, and perhaps most small business employee incentives fail to motivate enough of the desired behavior, and too frequently wind up becoming a permanent expense with a temporary impact.

There are methods of creating and maintaining incentives that avoid becoming an entitlement, and are dynamic enough to change and adapt with current conditions.We’ll talk about the approaches for the next several posts. Today we’ll start with an overview of types of incentives.

People are motivated by different things. As a behavioral analyst, I know that careful observation of the people I am dealing with will determine the types of incentive that will work best. For some, money is a motivator. For others, recognition or helping the rest of the team (which is a kind of recognition) is far more powerful.

In reality, all the forms of motivation work, but different types are more or less effective depending on the time and circumstances. Begin any discussion of incentives with a few preparatory steps.

Draw a two-by-two matrix. Label the left/right sides of the vertical divide “monetary” and “non-monetary.” Label the top/bottom halves above and below the horizontal line “individual” and “team.” Now you have a tool to track which incentives you’ve used, and which ones work in a given situation.

Next, make a list of all the employees whose performance can affect your bottom line. (Hint: that should be all of them.) Make two columns next to the names, one for individual/team and one for monetary, non-monetary. In the columns, write in the 2 factors for the type of incentive that you feel will work best with each type of employee. Don’t worry if you have people with the same job description or in the same department whom you think will respond to different types of incentives, we will get through all types before we are done.

In my next post, I’ll discuss how the types of incentives are used to drive different types of performance.

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