Levels of staff engagement and performance always come down to reasons why.
Strong reasons undoubtedly lie behind the corporate operations and the behaviour of its staff.
But those are not the reasons why management and staff behave as they do. Personal behaviours flow from personal wants and circumstances, not those of the company.
People do things for their own reasons. Ideally, staff will be provided with comprehensive personal reasons to take the actions of greatest benefit the company.
The foremost personal incentive, of course, is remuneration. Salary and benefits. Strong personal reasons to perform as prescribed in order to maintain and perhaps advance employment. Particularly powerful in times of falling employment, when fear of the consequences of losing the job adds its own level of inducement.
Next is job satisfaction and the degree of self respect it imparts. Sometimes an effective motivator, but often in short supply.
If the business’ management consider it is already achieving everything that could be derived from a totally engaged body of employees, highly stable and in all or most cases behaving exactly as prescribed and continuously performing at the highest level, additional incentives are clearly not required.
If that is not the case, a well directed incentive program carrying adequate inducement is likely to make a viable contribution.
Looking at staff performance through a filter of the only three reasons why the desired behaviours may not now be forthcoming identifies areas where incentives can make a difference:
Within these fields lie all the potential factors for diminished results, including employee churn, poor training uptake, difficult personal demeanour, lack of interpersonal support and harmony, lack of respect for corporate values, absenteeism, inaccuracy and apparent personal laziness.
Millbank provides a complete incentive planning and implementation service – or as many of those elements as you require.
To provide effective inducement, the incentive program must support sound planning with adequate reward.
Participants must see an opportunity to earn reward commensurate with the additional effort required and with the desired results.
Unlike minor staff recognition of length of service or awards provided as goodwill gestures, incentive rewards must be linked to desired behaviours and increased contribution to the company’s performance. The program rules must make these links clear, and rewards must be earned accordingly.
If potential rewards are not considered appropriate effort will not be forthcoming, and staff are very likely to form the impression that the company places a trivial value on the behaviours and outcomes advocated by the program.
Such an incentive program is actually a disincentive, which impairs performance and alienates the people it is intended to encourage.
Setting the correct reward level is not an exact science, but experience has shown potential earnings equivalent to between 2.5% and 3% of gross salary to be effective in a points-based accumulative program which offers only merchandise and travel rewards (not cash). Programs offering below that level are generally ineffective, while little or no improvement in outcome is achieved by offering richer rewards.
‘Perceived potential’ is key. When they evaluate potential personal benefit from the program staff should see an opportunity of earning reward of that order; and it must genuinely be available to those who achieve all the necessary goals. However, with goals that reflect the intention of the program to only reward above-average achievement, and all achievers not reaching all goals in all months, actual payout will be a very much lower sum.
Effective program planning and accurate budgeting depend on setting appropriate targets, rewards and achievement parameters for all levels of the program; and on avoiding all reference to monetary value of rewards (including avoidance of rewards such as gift vouchers, which carry a monetary value). Where monetary values are displayed the potential earnings need to be set considerably higher.