Tips to Tune Up your Employee Incentive Program

Do employee incentives really work? Finding the answer can be a divisive topic, especially with the debate over whether incentives really help create genuine behavior change. But in a recent Fortune magazine piece by organizational scientist Adam Grant, it is pointed out that many employers tend to give up on the practice too soon.


When designed right, incentives can have a powerful and positive impact on employee behavior. On that Grant and I strongly agree. Here are the top four factors to remember when creating an incentive program, and hazards to avoid.


Know what you’re getting into


It’s true that incentives don’t always create the desired outcome. But Grant argues that incentivizing performance can boost the volume of work performed by employees, though it might not always result in the quality of work leaders seek.


“My read of the evidence for performance incentives is that for the most part, they don’t undermine performance, but that reward is much more effective in motivating performance quantity than quality,” he says. “So, incentives may boost productivity to a much more effective degree than they promote creative thinking. In other words, maybe it’s easier to motivate people with incentives to work harder than it is to work smarter.”


If at first you don’t succeed, design again


Incentives should be treated as an experiment that needs to be tested, tweaked, and adjusted to fit varying workforces. “Too often I see companies that say, ‘We tried incentives, it didn’t work,’” says Grant. “No, you just designed a bad incentive.”


He offers two suggestions for leaders whose incentive programs are falling short. First, go back to the drawing board and think about what message you want to send employees through the incentive. Second, focus on testing to better understand what works. “If it works like you want it, great. If not, modify until you get it right.”


Mind the unintended consequences


The incentives you put in place to motivate employees may have an unanticipated effect, says Grant.


“They’re like taking a drug that hasn’t been fully vetted yet. A lot of people assume that incentives are straightforward—you reward the behavior that you want, you get more of it. You punish the behavior you don’t want; you get less of it.”


That’s an oversimplification, he says, but can cause issues with employees, especially when the idea of incentives in the organization is not clearly articulated.


Consider your message


Carefully consider your stated and unstated communication when it comes to motivating your team. The way the program or offer is explained will set the tone and direction of employee response – do they really care or is this just an inexpensive way to get me to perform?


Grant says it this way: “When we design rewards, we think a lot about the results we’re trying to motivate. We need to be at least as thoughtful around the relationship that we’re trying to build because every incentive sends a message.


“It can tell people that they’re just a means to an end, or it can tell people that we care about them.”


Smart businesses look for ways to empower employees, engage them in business goals and help them to make meaningful contributions. Our experts at All Star Incentive Marketing can help you create a comprehensive, well-designed incentive recognition and reward program that will develop stronger relationships and increase employee satisfaction throughout your organization. Contact us to learn more.

In economic terms, the multiplier effect refers to the proportional increase or decrease in final income that results from an injection or withdrawal of capital. In terms of Safety Reward Programs, the multiplier effect might refer to the ROI² (Return on Incentive Investment). A properly structured program significantly impacts overall employee engagement and safety culture, where employees are attuned to safety-related issues, inspired to display “Above & Beyond” safe behaviors, willing to be safety ambassadors, and encouraged to promote learning and support continuous improvement. Such best-in-class programs are designed to promote group objectives and reward individual behavior, engaging, motivating, and rewarding the people behind your success.

Fortunately, there are thousands of companies in high-risk industries that have excellent safety programming, training, and coaching in place. Many include safety in their list of core values and have invested heavily in EHS (Environment, Health, and Safety) technology, training, telematics, and personnel. However, too many miss the opportunity to incentivize and recognize individual safety contributions, behaviors, and performance.

Programs featuring tangible and experiential awards as the reward currency can have a multiplying effect that pays dividends. Benefits include a more highly engaged workforce, fewer accidents and incidents, reduced claims and losses, lower turnover and absenteeism, better communication, increased productivity, visibility to leading and lagging indicators, incremental coaching and training opportunities, and improved profitability.

So, what’s the rub? Are engagement programs focused on employee safety, health, and wellness expensive to implement? Do they only make sense for companies with thousands of safety-sensitive workers? The answer to both questions is no. Properly structured programs can be cost-effective and right-sized for companies with as few as 100 safety-sensitive workers up to those with 10,000 or more. The ROI² of these programs can be expressed as a ratio (in this case, 4:1), with quantitative results showing a savings of $4.00 for every $1.00 invested and qualitative results revealing higher employee morale, which serves as a catalyst for productivity. Safety Reward Programs help to mitigate risk, elevate employee engagement, and improve overall safety culture. They also present an excellent opportunity for companies to simply say thank you to their employees for being safe, committed, and engaged.

People have an inherent need to know that their efforts do not go unnoticed. Safety Reward Programs provide the stimulus and energy that encourage employees to perform at their best and achieve new heights.

Brian Galonek


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