Does your company have incentive plans or programs for your employees?
There’s an old idiom that says…
“The best laid plans of mice and men often go awry”
You may have plans for an incentive program in your company. However, as I’m about to illustrate, without proper systems to implement your plans, they are bound to go off course!
So, are we Mice or Men (uh, persons)?
We’ve had some interesting reactions to an earlier blog titled, “Too Many Wimpy Bosses.” Some readers were concerned that my idea of a proper boss was a “task master.” Guess they thought I approved standing over employees with a whip to keep the wheels of production turning. But, nothing could be further from the truth! I’m happy to report, our employees have been with our company for an average of just over ten years.
As leaders, we’re actually called to LEAD! We have to “man up” and hold those under our stewardship accountable for the work they agreed to do at a certain wage. That is, unless your company fails to give a proper orientation, so employees know exactly what is expected beforehand! This, of course, means an Orientation System needs to be in place, with all the company policies, procedures, etc.
If one of your vendors gave poor quality and service, would you demand better, or find another vendor? So, if you’re paying for someone’s labor, you should have a right to expect good quality work and timely service. Think about it, you could be the vendor someone wants to replace!
Awards and Incentive Plans to Motivate Workers
Some suggest you need to regularly award people, in order to motivate or incentivize them to do their job. I agree, to a point, but there needs to be a balance. It used to be that most “men” were motivated just by having a good paying job to feed their families.
Several years ago, a friend called me about an opportunity for a great hire; he thought I should meet this man right away. I agreed, and during that meeting I learned that the man had vast experience. Not only had he been a sales manager, but he worked in other key positions at large printing companies.
The meeting lasted several hours, as we talked about many aspects of our industry. We even talked about incentive plans and programs for employees. He told me his former employment had started such a program to award employees, based on productivity. It was his suggestion that we should do the same, “You know, to motivate your employees to work.” That struck a chord with me!
Systems to Measure Productivity
At the time, I was right in the middle of trying to implement systems to measure productivity. I was finding it very difficult to accurately measure the productivity of individual employees. So, I was a bit surprised that this guy’s former employer had somehow been able to pull that off.
I had come to the realization, that to find the productivity for a production employee, you had to measure Estimated Time versus Actual Time (for their jobs), to get a ratio. Then you needed to measure Chargeable Hours versus Un-Chargeable Hours, to obtain another ratio. Combining these TWO ratios gives you yet another ratio. That should be an accurate measurement of an employee’s productivity. But, not so fast!
You also need to measure the amount of errors/waste an employee is responsible for. Also, you have to look into what it cost the company for a given period. Then, in order to be fair to an employee, you must determine if the errors are Personal Errors or System Errors.
Stay with me, there’s more!
What if an employee (the “Go-To Guy”) is called upon to help other employees when someone is having trouble operating a machine or for other issues, which then affects the Go-To Guy’s productivity? To be really fair, you need to consider giving some kind of exemption for such “Go-To” people, when they are called away from their work or interrupted. Yep, more systems!
I don’t want to get into the weeds here. But, there are many variables management must consider when determining how to award or bonus employees, based on productivity. In order to do it FAIRLY, I have learned, it takes a whole lot of systems working together in concert to pull that off.
Okay, so back to the Sales Manager’s interview, and my surprise that his former company actually had an incentive program to bonus employees for higher productivity.
Truth To Tell…
After explaining to this man the difficulty I’d found in measuring productivity, he finally told me the rest of the story. “To tell you the truth,” he said, “my former employer had to discontinue the incentive program, because certain employees complained that it wasn’t fair for everyone.”
There it was! Now we were getting down to the truth of the matter. His former company didn’t have a system in place to make it happen long term!
In order for your incentive plans not to go “awry,” and to motivate employees with rewards and bonuses, you need a good, tight system in place to measure what you are incentivizing!
Should Everyone Get A Trophy?
Is it fair for everyone to get an award or bonus, just for showing up? Is it fair to the people in your company who do their best job, regardless of the carrot, to give equal rewards to those who tend to slack off?
Certainly there are other incentive programs that are much easier to implement and track. But, fact is, implementing proper systems for operating a business—and having incentive plans and programs that are fair to the employee AND to the employer—is not for “mice,” or the faint of heart.
Did I mention? Great Systems Work!
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