0l]$T0ilI 0Rnml$ Winning with incentives

By Lrddlc F. Huirr, CMC heeidcnt Hutar Growth Managcment Ingtitutc

ftugher competition and tighter gross margins make ! employee productivity and profitability more impatant tban ever. Obtaining poductivity is not easy. Motivating employees, creating a need or desire (o express ore's talents and skills or be acce,pted as part of tbe team), is essenrial.

Desirc for recognition (an awald, certificate, comnendation at an employee event, bonus, raise, promotion, etc.) or fear of having pay cut or being assigned to a lower level job arc both motiva0ors. To create effective incentives, managers must understand individuals have four basic needs: emotional, psyc,hological, financial and social. This means inentives mustmake them feel goo4 reward them psychologically or financially or give them recognition anong their peei

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The best incentives are tailored to stimulate and excite an individual o positive action. Exanrple: an avid fisherman can be interested and motivated by an award tied into his hobby. On the other hand, a strong family person with small children can be equally motivated by a $5 or $10 McDonald's certificate. Incentives, like any other management tool, must be understood and used properly to be effective. An incentive program with weak appeal or interest will fail.

Incentives can be short term u long terur. They can be progranned into a store program to increase sales, reduce waste or improve productivity or they can be varied and spontaneous to recognize achievement. The same incentive used year after year loses its luster, especially if it is expected and received without outstanding effom.

Money is an excellent incentive. Usually tied to a specific goal, a sales target" a number or dollar anount, it should be piedetermined with the employees knowing what they need to accomplish in order to receive the additional compensation. The award can be a bonus, a commission or a raise.

Financial incentive programs range from simple to sophisticated. Research, analysis and evaluation can make them auractive to the persons involved and affordable for the company.

Non-finarrcial incentives vary greatly depending on the level of the job and what the employer is trying to accomplish. Some perks, such as uniforms, personalized shirts and caps, annual picnics and holiday parties, are offered !o build a positive relationship.

Story at a Glance

Use incentives to increase productivity and profitability ways to tailor awards to individuals, catch their interest and desire to participate.