Avoiding Common Incentive Program Mistakes

Top Ten Most Common Incentive Program Mistakes You Can Easily Avoid

Incentive programs, when well designed and properly implemented, are great additions to workplaces. I have compiled a list of common employee incentive program mistakes that are easy to avoid.

Do Not: Award an Employee of the Quarter alone and expect a boost to overall motivation

Do: Award employee incentives for different, relevant reasons and expect positive returns

In order to get the most out of an employee award program, in the long and short term, the incentive budget should be spread across many employees. Employee milestones, customer service achievements, completed job/team specific objectives and overall organizational achievements can all be reasons to reward employees in addition to an employee of the period award.

Do Not: Develop an employee award program with no regard to organizational branding standards

Do: Consult marketing and other executives for their input on developing an incentive program

Employee incentives that target many participants gain credibility when they are branded similarly to other official organizational artwork, themes and websites. Developing an employee award program with the input from marketing and other employees sends a consistent message to recipients that the whole company is behind the program's success and the direction of the award program came from the top-down; lending the incentive program legitimacy and creditability.

Do Not: Offer a completely online incentive program to participants who are unfamiliar with computers and the internet

Do: Consider employee demographics when offering an incentive program to develop an online, paper-based or hybrid program

Motivating diverse groups of people for most managers may seem like a hunt for the perfect one-size-fits all employee award program. After all, you must be able to communicate the incentive program, make it accessible to everyone and ensure it is relevant to all participants in order to engage and motivate employees. Taking employee demographics into consideration when developing the incentive program will make it more successful in the long run.

Do Not: Raise the bar so high that no one is motivated to participate

Do: Tailor goals to be relevant and attainable

I often advise clients who are running incentive programs for a year or longer to allow recipients to earn a gift from the first award collection in three months. Forming relevant incentive program goals should involve employee feedback in the planning stages and throughout the program to encourage employee participation and maximize results.

Do Not: Award gifts without considering the different tastes and preferences of employees

Do: Allow recipients to select from a wide assortment of gifts sure to motivate all of your employees

Offering a wide variety of lifestyle merchandise is an excellent way to motivate employees, and has been proven as a better incentive than cash or gift cards for numerous reasons. After a client of mine orders I often hear back from them that the employees really appreciated being able to select from a wide assortment of awards that was high quality and brand name.

Do Not: Target just the top performers in the organization with employee incentives

Do: Target the right amount of employees to maximize incentive program potential

A typical company contains both high performing employees and average employees. Many organizations provide incentives to only the top 10% of employees. If the top 10% improves by 20%, then your overall incentive program results would still only be 2% better. By tailoring goals to be relevant and attainable to average performing employees, or say 80% of the workforce, if you could increase performance by just 5%, then the overall results soar to 4%.

Do Not: Develop an incentive program and then fail to evaluate it with available reporting

Do: Regularly analyze the impact of and adjust the incentive program as needed

Long term employee incentive programs should be evaluated on a quarterly basis while short term incentive programs require more frequent reporting. Taking time throughout the year will help you to be more prepared when it comes time to planning the incentive program budget and objectives for next year.

Do Not: Implement an incentive program or make changes to an existing one without communicating to participants

Do: Communicate with participants of an incentive program through different media

Depending on the people my clients are trying to communicate with I have seen incentive programs kickoff with announcement emails, posters, formal and informal meetings, mailed program welcome letters and many other media. All of these tools allow organizations to begin a dialogue of what objectives and purpose the incentive program aims to achieve and how it is relevant to each individual. Incentive program communication will help to maximize participation and the potential of the program.

Do Not: Cap point earnings so that people slack off during periods they cannot earn points

Do: Budget the incentive program so that employees seldom reach the capped amount well before the end of the period

Incentive programs should consistently motivate employees. Gauging the actual budget of an employee incentive program is a process that gets better over time. Many times at the beginning of a new budget year, my clients will adjust the points awarded for each goal in the incentive program to ensure recipients can meet goals and earn awards throughout the period.

Do Not: Give negative points when participants fail to reach an objective

Do: Award points when employees reach goals

Organizations that implement employee incentive programs tend to only award points when employees reach goals and do not allow employees to have a negative point balance. However, when disciplinary action has been taken against an employee, I would suggest that the person's incentive account be temporarily suspended or that he or she not be allowed to earn points for a certain time period following disciplinary action. Positive reinforcement is always the best way to motivate employees and by giving negative points to participants who do not meet a goal, you are giving negative reinforcement that can backfire and kill employee motivation.

When planning or re-evaluating an employee incentive program, be sure to keep the above advice in mind. I have come across these common incentive program mistakes and would love to hear your comments on any award program mistakes you have made or experienced as an employee.