A flea in HR’s ear was an article featured in people management’s 27 August 2009 edition, in which Jack Welch doesn’t blame HR for the banking collapse. I personally agree with Jacks view, yes HR does develop the incentive schemes and manages them but how can a multinational company blame one department when things go wrong.
Companies develop an overall strategy which fits in with their business plan; this is something that has been developed with the owners, major shareholders, senior managers and stakeholders in order to drive and develop the business. The strategy that the company will put in place requires all the areas of a business to work together to meet the targets set; therefore HR will do what has been outlined in the overall objectives, thus how can you blame one particular department?

A letter in People Management Magazine from Michael Rose commenting on “HR to have greater role in reformed City reward, 16 July 2009” stating that a guaranteed bonus is often agreed for the first year  of employment as part of negotiation with a prospective employee. Michael Rose of Rewards Consulting Limited then comments that it is thoroughly bad practice to have any guarantees after the first year and that it should not take a regulator to point this out. I completely agree with Michael Rose from an incentive view point. Bonuses are one of the main aspects of an incentive scheme’s and writing an “automatic” bonus in to an employee’s terms and conditions defeats the whole point of the scheme or potential scheme, which could very easily conclude in the business failing to reach several of the HR objectives. I don’t believe a financial bonus is always the best reward in an incentive scheme, much the opposite the reward should change along with an employee’s needs to be fully affective but a lot of bonuses and employees do prefer a financial award, therefore financial awards are regularly used and guaranteeing them to an employee will reduce the overall incentive scheme dramatically.

Lucy Philips wrote an article in 10 September 2009 People Management about the CIPD issuing reward code to tackle executive pay but is it too late? It is my personal view that bankers earn to much in financial bonuses but it reality if I had an employee earning my company 10 million pounds I would reward them heavily for making the money.  If a reward code gets issued to the banking industry will there then be a case for a code to be issued across all industries? There is a fine balance between reward and greed; if you want to get the best out of an employee then you have to have an incentive scheme that works to achieve this.

Government and individuals knew what they were doing most of the time taking out big mortgages and other financial loans/credit cards but a lot of individuals who are now struggling have wound it easy to claim that they were mislead and hide behind the blame of bankers. If you can’t afford something then don’t buy it but we live in a world where people want things before they can afford it and the bankers are only offering a service that has been on offer for years.

I do believe that guaranteed pension scheme e.g. Sir Fred Goodwin should be stopped especially when the company ends up being bailed out by government but if a code is introduced which limits financial rewards it will end up being complicated as people will soon find loop holes in the code.

Banks are companies and writing recommendations to the banks in my eyes is pointless. Banks gain customers regardless of all the hidden issues, if they have a good interest rate they will gain the customer or customers will stay with a bank due to the hassle of changing all their details. I believe that the money and time should be spent setting up an free advisor body that can educate the people who think that taking out loans they can’t repay or stop people being able to open a store/credit card when they can’t afford to pay off the money would be a much more sensible solution.

Featured in People Management recently (12th February 2009) was an article titled; “Recession leads firms to rip up their reward strategies”. It mainly featured BMI as a business and the affects it was feeling from the union Balpa due to the incentive schemes being designed in the better days to reward staff. Surely in the current climate it is still as important as ever to reward staff and try to use this as a chance to become a market leader?

We all know that out of every recession businesses become stronger as they have to rely on real business knowledge to get through the difficult periods. Therefore, is this not the time when true HR professionals show their true colours and skills using such things as incentive schemes in a different manor? Why can’t good, effective incentive schemes reward employees by getting them to reduce team expenditure and therefore reducing the cost of the bottom line? I believe that many employees are used to HR schemes being introduced by businesses, lets be honest, a couple of years ago HR professionals worked hard at selling schemes into businesses and proving there worth. This in mind, surely it wouldn’t look good when in times of difficulty the schemes were retracted. How will HR professionals ever be able to be taken seriously in the future?

Let’s prove that HR does affect the running of a business in any situation and think of effective incentive schemes that still work for the employer and the employee. We just need to think outside the box and make incentive schemes incorporate aspects of the business that would not necessarily be used if we were trying to drive the business forward.

Businesses often develop incentive schemes but do they actually consider what the employees want. Incentive schemes have to meet business requirements but if they don’t incentivise the employee then it will never work.

Please let me know what you consider to be important for you to be incentivised?

I believe that the best incentive schemes should be simple in practice, simple to understand and reward the employee. A key to a very successful incentive scheme is to design it to work at team, department, site and business level. Making sure multiple aspects of the business is working towards the same incentive scheme will drive team working and employee engagment.

The end result for the incentive scheme has to be an increase in profits for the business and rewards for the employee as seen fit.

An example coming soon!

Is there a Perfect Incentive Scheme?

I don’t think it would ever be possible to develop a perfect incentive scheme due to the changing environments and industries the incentive schemes have to work in. I believe it could be possible to develop a perfect incentive scheme model, from which the end result and scheme can be tailored to bring perfect results.

I have started to write a theory on incentive schemes – “Tri To Incentivise”, developing a model on which an incentive scheme can be built and believe the perfect model must follow two main paths – “The Employees wants/aims” and “The Employers wants/aims”.

Please read my theory on incentive schemes called “Tri To Incentivise” for more information: http://www.hrinvasion.com/index.php?option=com_content&task=view&id=27

Incentives are becoming increasingly popular within businesses to add value and increase the positive affect an employee can have within the business.

When we typically think of incentives we think about the incentive schemes that are planned and the company offers as a policy. But in relation to motivation I believe they are also effective in a different way.

Incentives are offered/used in an ad-hoc manner everyday, without managers and employees realising. In order for a manager to motivate an employee, it is common that without realising it an incentive is offered e.g. while you get that done I will get you a drink. If you finish that off and get it to the customer on time I will let you go early.

The manager will offer an incentive to motivate the individual. I believe incentives are key for short term “Booster Motivation”.

Incentives come in many forms and do not always have a positive effect e.g. I’m sure you can all remember a time when your boss asked you to work late? The incentives offered to motivate and encourage you to put in the extra time could of ranged from time off in lieu, the incentive that it will look good to your boss during a difficult time, or even when redundancies might be round the corner.

Incentives are important and do motivate employees but I don’t believe they are key to motivation due to the fact that they can be used to “Fear Motivate” an employee into being more productive.

Being able to offer incentives are key to driving a business forward as they keep the employee interested and more productive. The type of incentive that can be offered will depend on the factors affecting your business and the outcome required.

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