An Employee Incentive Plan Isn't Always About Money

by on June 15, 2009 · 0 Comment POSTED IN: HR Info Center

Use non-monetary rewards in your employee incentive plan

Another common mistake is the failure to look and use for non-monetary rewards as part of your employee incentive plan. And given the economy these days, this is something you might want to take a closer look at for your employee incentive plan. You know, we really are trying to attract, retain and motivate.

Expand the definition of what your employee incentive plan is. It’s more than a salary or cash incentives or stock or even benefits. It’s something more than that to the extent that we can get – there’s other stuff going for us. There will be less pressure on the compensation – the true compensation part of the package that we give employees.

And non-monetary rewards are something that you should take a look at as part of your employee incentive plan. And people aren’t asking for a lot. And we’re not – at least we’re talking about certificates or, you know, dinner tickets or tickets to the theater or anything like that, we’re actually talking about things that come across survey, after survey, after survey.

Think about recognition and status. Pat somebody on the back and tell them they do a good job. That’s cheap stuff. Challenging work if you can do it, learning opportunities, flexible schedules, good manager and coworkers and a belief in the organization mission. If we can sell people and use these to our advantage, you’ll find there’s less pressure on the cash or stock side of the employee incentive plan.

Rules to Follow
If you’re going to do non-monetary rewards make sure you follow some of these rules. First and foremost, be clear about what you want your employee incentive plan to achieve. Be real clear about it. Be fair in the application, I mean be consistent. If you have rewarded one employee for a specific achievement then make sure you reward another if they choose the same milestone.

Make sure you’re clear why the employee is receiving awards specifically. If they don’t know for certain, this can create confusion. Personalize a reward if possible — dinner vouchers to their employees’ favorite restaurant. Okay, it goes a long way. It puts an extra positive spin on the employee incentive plan.

Provide variety, one size doesn’t fit all. For example, if an employee has a family, maybe you give them enough money for a family dinner as opposed to an employee and spouse dinner.

Ensure frequency. So, make sure you’re not giving it too much or too little. Tailor the size of the award to the effort. For example, you know, if you give your – a box of chocolates to a well – to an employee who did a well-written report, who worked overtime. That may work. But if you give a box of chocolates to a sales man who had blitzed his budget by 40%, it’s probably kind of a slap in the face to be honest. So, tailor the employee incentive planto the size of the effort.

Be careful to avoid repetition. Ensure it’s fair and it’s not necessarily used to replace low salaries in the marketplace because they see through that really easily.

Edited Remarks from “The Seven Deadly Sins of Employee Compensation Plans (and How to Fix Them)” by Rick Olivieri

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