Creative Incentives – A case study on incentives
A small software company routinely provided his team with an annual pay increase and end-of-year bonus. When the business lost some key clients and profits started to decrease, the owner did not give a raise nor did the team receive their bonuses that they had come to expect. The employees were disappointed and angry. Three employees resigned, including a senior technical manager who had been with the company for eight years and was a key employee. This caused the owner even more issues with client service and consequently retaining his existing clients.
Considerations
There are times when not giving increases or bonuses may be justified, especially when profits are down or job performance is not up to par. But many business owners mistakenly assume that if conditions warrant not giving raises, then the staff will understand – Wrong! If the increases and/or bonuses are the norm then the team members start to count on that money to cover their own increasing expenses. They do not necessarily relate the business’s financial issues to their own compensation. Given that every employee wants the opportunity to earn more money, the solution is to come up with compensation alternatives that won’t exacerbate a company’s financial challenges and, at the same time, motivates the employees.
Solution
Our team at Creative Incentives believes that we have the solution for this problem. The easiest way to achieve these goals is through a well-designed incentive programme. The incentive programme costs should be covered by a percentage of the increased revenue it induces. An incentive is not about people not doing their jobs, but rather about people working together and accomplishing more, thus sharing in the growth and financial success of the company.
A good incentive plan removes the unpredictability of raises and supports greater productivity, increased worker satisfaction and a healthier bottom-line. Identifying the key drivers of your staff – money, travel, gifts – will assist an organisation in putting together a programme that motivates staff to give of their best.
A well thought out incentive programme provides a built-in increase or bonus mechanism, eliminating the uncomfortable negotiations that often occur. The business can increase growth through higher production and be able to reward staff, while at the same time increasing profits.
Speak to one of our Account Managers at Creative Incentives today about putting together an Incentive Programme that can work for you and your team.
