What is the best Incentive ?
Incentive schemes have been much criticised in recent years, and
it is quite true that some schemes have been singularly
unsuccessful. Their failure, however, has often been the result
of inadequate planning, rushed introduction, or not thinking
through such a scheme properly. These points should not be used
to generally condemn other more successful applications.
Whether any particular incentive scheme achieves long term
success depends initially on the thoroughness with which the
current working situation is reviewed, hence the need to re-look
at some key Action Points, and question why you need an
incentive scheme.
1. Increase in earnings for employees? 2. Increase in output? 3.
Improvement in quality? 4. Better mobility of labour? 5. More
efficient methods of working? 6. Improvement in safety? 7.
Higher housekeeping standards? 8. Reduction in absenteeism? 9.
Reduction in labour turnover? 10.Reduction in overtime working?
Any of these points or a combination, will determine how you
introduce and communicate such a scheme. The following questions
will act as an "aide memoire".
11. Does the work necessitate skilled, semi-skilled or unskilled
labour? 12. Can individual skill be fully applied when
manipulating machines etc. or is the employee's quantity and
quality of output regulated to a large extent by factors outside
his/her control? 13. Does the level of output remain steady
throughout the year or is it subject to seasonal variations? 14.
Is production organized on a process flow line, batch or jobbing
basis? 15. Have your current production methods been recently
reviewed for maximum efficiency? 16. Is any new machinery or
plant, to be introduced in the near future, likely to upset the
standard upon which an incentive scheme might be based? 17. Have
you sufficient qualified staff to introduce an incentive scheme,
or alternatively, have you one qualified employee who is capable
of training other staff in work study techniques? 18. Once the
scheme is introduced, will you have the necessary number of
staff to be able to keep it under constant review, and to
introduce modifications where necessary? 19. Will the present
staff in the wages department be able to cope with bonus
calculations etc. without additional help? 20. Are other parts
of the organization such as Production Control, Maintenance,
Distribution etc. geared to cope with the increased flow of
materials and output that are likely to result? 21. Are your
present channels of communication, both formal and informal,
capable of coping with the dissemination of detailed information
to all employees, on the workings of any proposed incentive
plan? 22. Have you the necessary facilities, away from the
production area, for any operative training or re-training that
might be required? 23. Have you agreed the principle of using
work measurement with the trade unions and employee
representatives? 24. Will you be undertaking the training of any
employee representatives in work study techniques? 25. Are the
mechanics of your scheme simple enough to enable all employees
to fully understand how their pay is calculated? 26. What
standards will you use to evaluate performance to ensure that a
proper balance is maintained between: a. Increased output b.
Maintaining quality c. Efficient use of equipment or materials?
27. How will you relate payment to performance? e.g. in direct
proportion to output? 28. On what length of time will you base
payment? e.g. hour, shift, week? 29. Will you gear the scheme to
the individual, working group, department or factory? 30. Will
you apply the scheme in some way to direct as well as indirect
personnel? If not, how will the problem of increased or
decreased differentials be solved? 31. Will official disputes
concerning the operation of the incentive plan be handled
through the normal negotiating and disputes machinery? 32. What
will be the principles governing payment for 'waiting time' or
unmeasured work? 33. Will any scheme you introduce be on a
gradual basis or do you intend to apply it to all appropriate
sections at the one time? 34. How will you calculate holiday pay
for pieceworkers?
It's notoriously difficult to put together an incentive scheme
that motivates all of its targets, and that continues to do so
over an extended period. You may be looking to get the most from
your staff by increasing motivation, improving morale and
encouraging efficiency.
Incentive awards are a way of rewarding employees and others
with cash, goods or holidays rather than increases in pay. There
are Two Basic Types Of Incentive Scheme, Financial and
Non-Financial
Schemes can vary from national promotions to a prize raffle held
by a small firm. Rewards of goods or holidays will usually
involve the use of a voucher.
Awards may be linked to sales performance, good timekeeping,
safety or production records, or may involve participation in a
lottery or prize draw.
There should be increasing consistency in the ways that reward,
recognition and incentives are offered to customers, staff and
distributors. Participants should always have the power of
choice, enabling them to self-target and work towards things
that are exciting or important to them.
Incentives that are always won by a small group of high
performers, breed more resentment than motivation, while the
high performers themselves soon become bored with the repetition
of holidays, and activities that are open to them.
The aim of an incentive scheme is to improve the performance of
your business, whether it is your employees, customer's or
supply chain.
As a result the most successful incentive schemes tend to be
those matched to the individual's requirements, but which still
appeal to the company as a whole.
You will find that with a little extra thought, allied to a
willingness to be creative, can make a quantum difference to the
effectiveness of an incentive programme