In a slow economy, employees have fewer opportunities to take a job at another company, but entrepreneurs would be remiss to take their fingers off the pulse of company morale simply because employees have fewer options. “Companies that don’t think about employee incentives and basically rest on their laurels and think ‘the economy means fewer jobs therefore, where are they going to go?’ Are the companies that, as soon as the labour market picks back up will see their turnover rates going from 5 % to 50 % and it will happen overnight,” says Mark Murphy, author of The Deadly Sins of Employee Retention and CEO of Leadership IQ, a Washington D.C.-based executive education firm.
So what’s one of the biggest reasons people quit their jobs? One of the major reasons is being dissatisfied with their supervisor. In the cramped confines of a small business, with the pressures of work, the relationship between employees can be tested on a daily basis. In bigger companies there are more opportunities to move to other jobs if you’re dissatisfied with a particular supervisor, whereas smaller companies may have less options so they run the risk of losing the employee.
I recently came across this excellent blog providing a simple overview about how to put together an incentive plan. Most businesses think that incentivising employees and developing an incentive plan needs to be complicated, but it doesn’t need to be!
The end goal of an incentive plan is aligning the business objectives with what is needed from your employees and striking a fine balance. As the employer you should know your strategic plans for success and growth, therefore it’s just a matter of finding out what matters to your employees.
Finding the right balance and ensuring that all measures are realistic will ensure a simple but effective incentive plan.
Checkout the full article at www.hr.com
Found this excellent blog and wanted to share it with all our followers, the full blog is at: http://www.gympietimes.com.au/news/incentives-pay-with-loyal-staff/1768694/
It is so refreshing to see others recognise the keep it simple and communication with employees approach as being key factors for incentivising them.
I think it’s fair to say that one incentive scheme for your business will only just do when things are easy, if they ever are! With costs increasing and employees feelings the squeeze and businesses being unable to provide pay rises I believe it is even more important than ever to have flexible and adaptable incentive schemes.
It might be one of the oldest text book sayings, but it really does deliver results if done right; Think outside the box and work with employees to find out what works for both parties involved. I’m sure an employee that uses public transport would find an incentive scheme that ends up saving them money to help with the New Year ticket rises very appealing. Maybe the business could pay the increase, but is this realistic? Probably not, but an incentive scheme that allows the employee to check emails and do admin tasks in the morning and then travel to work straight after peak time has ended would have an equally positive result with significant benefits to both parties.
It’s so important to break down what would benefit the employee, incentive schemes don’t have to be big or complicated, keep it simple with little wins that are effective and add up!
In peoplemanagement, 25th November edition within the News section from the CIPD Annual Conference & Exhibition there was a debate about enabling workers to produce good work within the current economic environment. Lucy Adams Director of BBC People told delegates that constant change meant that HR now has a moral duty to invest in staff and to give them skills and confidence.
I think Lucy’s thinking is right and that HR professionals need to earn their wage by being able to provide and think outside the box in order to think of incentives and increases an employee’s productivity.
The easy solution to incentivising staff has often been money lead but with new issues and uncertainty in the current climate HR professionals need to understand what really makes an employee tick. Providing good incentives for employees to do a good days work and not just turn up will enable your business to stay ahead of the rest.
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?