By John M. Collard
Would you share the wealth with those who were required to help you create it? Of course you would!
Business owners willing to invest in realistic incentives that reward achievements accomplished by managers and employees, reap the proceeds. The keys to success are to: 1) set realistic goals and timeframes; 2) hold managers accountable for performance; 3) communicate measurement and reward methodology - then step back and let them perform.
Always be sure to reward positive results when goals are achieved, but never give a reward when goals have not been accomplished. If goals are met, the cash will be there to pay bonuses.
First, set the directive and goals ... THEN ... set the incentive structure to achieve them. The goal setting process clarifies direction and eliminates confusion, unclear motives, and misguided efforts. When you use an independent resource to guide the process, it often adds credibility and subjectivity.
When employees can see dollar signs and goals are clearly stated, their mindset changes and they become more creative. Include as many employees as possible as part of an incentive-based structure. Incentive Compensation (IC) should reward performance and teamwork, which produces results.