Incentive Programs Working or Not?

Copyright (c) 123RF Stock PhotosWith experience or being around a long time, you get to see lots of programs come and go. One of those programs that seem to change frequently are incentive programs. Wikipedia puts, “an incentive program as a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees, and in sales to attract and retain customers.” Can you think of some? I know quite a few (well, lots). It is one of those tools to help the organization to instill a continuous improvement in performance. Think back on those programs, did they work? How did they make you feel?

When I look over the many incentive programs that I have experience with there are some common themes of those that have been successful.

  • The incentive program was well thought out. Answering the questions of what behavior are we going to reward. That behavior has to be above the expectation of all employees. Going after the top of the class. Hopefully inspiring others to what to reach the top.
  • The program awarded past performance.  The program has a timeframe that is long enough to help develop a better picture of a sustained performance.
  • The reward is timely, specific and impactful.  What is the award that is given? Debate around money, plaques, pat on the back and public recognition need to be considered before implementation. Setting the award will be critical in how well the program is received by the employees.

Let’s face it, this is a touchy area that managers have to navigate carefully. I have seen many a program start off with the best intentions, but fail shortly after implementation. Why? The list is long. The critical ones that pop up quickly are the incentive program is not focused on top performance. Many programs are focused on getting “all” to do what their expectations are normally (attendance). Some programs are set up that the employees can work the system to be eligible for. This has a huge effect on the employee base, as they will “see” the gaming going on and the program could demotivate many folks. Lastly, the award has to be meaningful. Some expects say that money should not be a motivator, that just the recognition should be enough.

Over the last couple of years, I am seeing some new incentive programs that will be interesting to see how well they will work. Those are the incentive programs for lowering health insurance costs. Those particular incentives to be healthy. Helping add money to the flex spending accounts for employees that are not overweight. For employees that attend health seminars or complete a company sponsored information session. There are many examples. With the raising cost of health care, these incentive programs are popping up everywhere. Is it too early to tell if they are working? Are they fair? Time will tell.. I know for me, I got healthier by increasing my exercise and diet, so that I could get some additional funds to help offset my health care costs.

Do you think incentive programs work? As a manager, I know I spent more time dealing with the incentive program than maybe the organization planned. Please share the good, bad and ugly…

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