Awarding incentives to motivate your employees
Learn how providing your team with incentives can help elevate sales and production for your small business.
How you pay people is said to determine the kind of results you get from them. However, when it comes to your staff, money might not be the only motivator.
So what exactly can you use to incentivize your employees to perform at higher levels? By creating a strategy that focuses on education and training, and the right kinds of incentives, you can help your employees meet or exceed their potential.
Focus on education and training
Providing incentives without training and education is a shortcut used by executives and management who are out of touch with the objective of improving their workforce's ability to grow. They might say, "I want you to make 100 sales calls per day. And I will pay you $100 every day that you confirm 20 appointments. If you accomplish this 10 days in a row, I'll multiply the incentive by 10." That's a $10,000 bonus! As great as it sounds, it won't move the productivity bar if the person realizes on day one that they don't know how to get an appointment. If this person doesn't know what to say on the phone, or is unable to handle objections or rejections, then you won't get the appointments and you won't ever pay the incentive.
That's why it's very important that every incentive your business offers lines up with some type of training schedule. For example, you might offer bonuses to your sales team for every contract they close, but simultaneously you will invest time, energy, coaching, and other resources to provide them with the tools necessary to achieve those bonuses.
Understand the three types of incentives
Anything can serve as an incentive if it can persuade someone to do something new. Incentives can be tangible, intangible, or experiential:
Intangible incentives are things like recognition, praise, a commendation, access to better leads, or extra time off. These aren't physical incentives but still serve as awards for an accomplishment.
Tangible incentives are material objects like money bonuses or a physical prize. Make sure the tangible incentive is something the person would actually want; if not, consider offering different tangibles for different people. For example, I once offered a choice between money, a TV, or a watch.
Experiential incentives provide the individuals with an experience. A fishing trip with the team, lunch or dinner with the boss, or taking high performers skydiving are all memorable experiences that can serve as incentives.
I believe that experiential incentives carry more value than tangible ones, especially when purchasing the experience at places like third-party charity events. For example, I once won an auction for a racecar-driving excursion at a Boys & Girls Club event and used it as an incentive. The benefits were threefold: The Boys & Girls Club received a donation, my employees experienced something new, and production increased because my employees were happy. (Please consult with your accountant or tax attorney about the tax treatment of the incentive.)
Follow through on incentives
If you do decide to use incentives to increase production, you must commit to actually paying them out.A well-designed incentive program has a good chance of success. It can increase production, build allegiance and loyalty, and boost morale. In addition, the right incentive will result in new actions taken, new sales results, and new levels of engagement and creativity from your employees, which all lead to higher levels of production.
Behind every great team is an owner who knows how to foster employees' talents. The ultimate way to get higher levels of production is to demand greatness from your team and help them fill in the gap – that place between current production levels and their full potential.